Trump wants to raise tariffs — and it’s going to come out of your pocket.

TRUMP: Tariff. It's more beautiful than love. It's more beautiful than anything. It's the most beautiful word.

Trump keeps saying that other countries pay for tariffs. But that’s not how they work.

Tariffs are effectively taxes on imported products, which we ultimately pay.

Say there’s a 60% tariff on Chinese imports. When Walmart imports Mr. Coffee machines from China (which is where they’re made) who pays the tariff?

Not China. Walmart pays the U.S. government.

For example, if Walmart buys a coffee machine for $20, the 60% tariff means they’ll pay an extra $12 in taxes, bringing their total cost to $32 per machine.

And if Walmart is paying 60% more, do you think they will cut into their profit margin and absorb that cost? Of course not, they’ll pass it on to you!

In fact, Walmart’s CFO has already said it expects to raise prices in response to Trump’s tariffs in order to protect its profits.

Now, targeted tariffs can be used to protect industries critical to national security.

This is what the Biden Administration did when it levied tariffs on Chinese electric vehicles, solar panels, computer chips, and batteries after making massive investments in these technologies domestically.

But Trump has proposed across-the-board tariffs on almost ALL imports — particularly from our biggest trading partners. He claims this will help boost American manufacturing and spur job growth, but tariffs alone don’t result in new production capacity or more jobs. Plus, American manufacturers import a lot of raw materials for products they make, so their prices would go up too.

While Americans would pay more for imported goods due to tariffs, countries that export the products are also affected. China’s government might retaliate with tariffs of its own on American made products. That’s called a trade war, and there are no winners.

One of the biggest global trade wars started with the Smoot-Hawley Tariff in 1930. After the 1929 stock market crash, President Hoover and Republicans thought sweeping tariffs would help the economy.

They didn’t. Import prices surged, and exports plummeted because of other countries’ retaliatory tariffs. Global trade fell by 66%, worsening the Great Depression.

Smoot-Hawley seemed to prove that across-the-board tariffs don’t work. But then came Trump’s first term and his sweeping tariffs, largely on China.

Higher prices from Trump’s tariffs on thousands of products are estimated to have cost American families close to 80 billion dollars. And this cost took a larger chunk out of the incomes of poorer families than richer ones. That’s because tariffs are regressive, meaning they take a higher percentage out of the paychecks of working people than out of the paychecks of the wealthy. If you make $50,000 a year, the cost of a coffee maker going up due to tariffs impacts you more than someone making $1 million a year who can better afford the price increase.

Following Trump’s move, China retaliated with its own tariffs on American exports, which led China to import less from the U.S. In the U.S. agriculture industry alone, this resulted in a $27 billion loss in exports from mid-2018 to the end of 2019. And even though the government increased aid to impacted farmers, farm bankruptcies shot up 20%.

American manufacturing also shrank, as raw materials became more expensive and demand for exports slumped. One study estimates that Trump’s trade war cost nearly 300,000 American jobs.

But instead of learning a lesson from this fiasco, Trump is now promising even bigger tariffs. In addition to more tariff hikes on China, he plans to levy 25% tariffs on everything from Canada and Mexico too.

These new tariffs would cost the typical American household an additional $1,200 in 2025. But if Trump makes good on previous pledges to slap tariffs on imports from every country, American families can expect to spend as much as $4,000 more.

Trump has suggested he would use the revenue from tariffs to “offset” more tax cuts for the rich and big corporations. But of course, as I said, any revenue raised from tariffs will be coming out of your pocket. The tariffs you pay could help facilitate this massive transfer of wealth from most Americans to the super rich.

So when you’re paying more for groceries, gas, and housing, know where your money is really going and know whom to blame.