Donald Trump is touting a tariff on imports to raise revenue from other countries. However, according to the Institute on Taxation and Economic Policy (ITEP), these tariffs would be largely passed on to consumers as increased prices. Trump proposes tariffs from 20% on all imported goods up to 200% on imported cars. Tariffs would be imposed on phones, clothing and even foods like coffee and bananas. Furthermore, he has no plan to prevent American companies from raising their prices to just under the cost of imports.

Trump’s defense is his 2018 tariff on washing machines. The purpose of that tariff was to increase the cost to consumers resulting in them buying products made in America. However, many economists predict that American consumers would bear the brunt of the tariffs. When the government imposes a tariff on companies importing goods, those companies would add the amount of the tariff to the sale price consumers pay. Thus it’s sometimes called a national sales tax.

Trump’s universal tariff is based on the idea of hitting every type of good whether it can be made in the United States or not. Economic analyst Joseph Politano says, “The United States imports a wide variety of items that cannot be produced in large enough quantities to satiate domestic demand. Basic foodstuffs such as coffee, bananas, avocados, cocoa and much more do not grow in U.S. climates. And there are no domestic replacements for wild-caught Chilean sea bass or yellowfin tuna.”

Politano continues, “Universal tariffs raise prices by design, but, more fundamentally, they decrease economic output…Even for the industries that are supposed to benefit from protectionism, universal tariffs would eventually have massive net negative impacts by driving up the costs of key imported raw materials and equipment. That represents an extremely large hit for U.S. manufacturers…” Many products that we buy (e.g.,cars), while partially made here, use parts that are imported from China or elsewhere.

“Tariffs on the scale that former President Trump has proposed would massively disrupt the economy,” the ITEP said in its analysis. “They would cause substantial price increases on imported goods, severely damage the industries that rely on imports, hurting employment in those industries, and result in price increases for goods for which final production occurs domestically.”

What makes a universal tariff so dangerous is not only that it primarily serves as a tax on essential goods, it also harms beneficial trade relationships with our closest allies. The vast majority of U.S. imports come from close allies rather than rivals such as China. The European Union and Mexico are both larger sources of U.S. imports than China, while Canada comes in a close 4th. According to the National Bureau of Economic Research, “…retaliatory tariffs had clear negative employment impacts, primarily in agriculture; and these harms were only partly mitigated by compensatory US agricultural subsidies.”

Furthermore, Trump is suggesting various tax cuts including the elimination of taxes on tips and overtime pay, and even unlimited federal deductions for property taxes paid to state and local governments. Combined with an extension of the 2017 tax cuts, most households would save some money. However, “taken together, the tax cuts and tariffs would cost households in the middle 20% of the income distribution an average of $1,530 in 2026,” ITEP found. “Only 5% of the wealthiest households would come out ahead under Trump’s plans.” Families of modest means wouldn’t be able to take full advantage of these policies because of other tax exemptions they receive and the lower tax rates they’re eligible for. The ITEP report warns that these tax cuts could turn out to be even more costly and regressive than estimated.

Trump’s proposals could also significantly change worker and employer behavior by prioritizing certain types of income over others. For instance, eliminating taxes on tips would encourage paying workers through gratuities rather than normal wages. This could accelerate the practice of tipping and could potentially be abused. Lawyers, for example, could shift their pay to a gratuity-based system to avoid taxes. In a separate analysis on Monday, the Center for a Responsible Federal Budget said Trump’s tax plans could cost the government as much as $15 trillion. He has no plan to pay for it.

Verna Caruso is a native of Muncy, PA who now resides in Williamsport.  She is a former staff member at Inc. magazine and former Chair of the Lycoming County Democratic Committee.