President Donald Trump’s sweeping new tariffs, which include 30% duties on EU goods, 35% on Canadian imports, and 50% on products from Brazil, could hit American businesses hard, warns Peter Boockvar, the CIO at Bleakley Financial Group.
What Happened: The proposed levies, set to begin Aug. 1, would apply to an estimated $3.3 trillion in U.S. imports annually, Boockvar said while speaking to Kitco News on Monday.
“If we're left with a 15% tariff baseline on $3.3 trillion worth of imports, that's about $500 billion in new taxes,” he says, adding that they essentially undo Trump’s 2017 tax cuts.
See Also: Ray Dalio Says Trump’s Tariffs Are ‘Theoretical,’ Warns They May Not Bring Manufacturing Back To US
“You're essentially taking back your own cut in the corporate income tax in 2017, which I was a big fan of,” Boockvar says, referring to the 2017 Tax Cuts and Jobs Act, which reduced the federal corporate tax rate from 35% to 21%, aimed at boosting investment and bringing manufacturing jobs back to the U.S.
Boockvar continues to reiterate his point, saying that “there are not just trade policies, they’re taxes,” that will ripple across supply chains, particularly for companies dependent on foreign inputs.
He also questioned the broader logic of using tariffs as industrial policy, calling it a “fantasy belief” that such measures will successfully reshore manufacturing jobs.
Why It Matters: Several experts, economists and analysts have echoed similar concerns over the years, saying that tariffs are a tax paid by American businesses and consumers.
Early this month, soon after a trade deal was announced with Vietnam, economist Peter Schiff declared that “Americans are losers and Vietnamese are winners,” since consumers in the U.S. will now be paying an additional 20% on goods imported from Vietnam, while Vietnamese conumers will have to bear no such costs on imports from the U.S.
Going back to 1987, Republican President Ronald Reagan warned that “High tariffs inevitably lead to retaliation… and less and less competition,” which would ultimately harm American workers and consumers.
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