Irony is dead, and we’ve killed it. The results are still unofficial, but Oregonians have overwhelmingly rejected Measure 118. Douglas County, alongside the entire state, vehemently opposed the measure, would have placed a tax increase on corporate sales over $25 million. The primary argument against Measure 118 was that the tax hike would have passed to the consumers, resulting in higher prices for those already dealing with the effects of inflation. While rejecting Measure 118, Douglas County voted overwhelmingly to support Donald Trump. Normally, a county voting against a tax hike while simultaneously supporting a Republican nominee would be ideologically consistent. In the past, Republicans have generally been supportive of trade liberalization. However, with the advent of right-wing populism, Republicans have adopted a more protectionist stance. One of Trump’s key promises is to support a mass tariff increase while lowering top income tax rates. Like Measure 118, these duties will be passed on to the consumer, even further increasing the prices that led the American electorate to choose Trump in the first place.
Ever since the Smoot-Hawley Tariff Act of 1930, tariffs have been as politically unpopular nationally as a sales tax is with Oregonians. Tariffs kept prices of foreign goods artificially high to spur domestic industries. However, they are generally believed to have exacerbated the effects of the Great Depression, causing basic goods to become unaffordable to the majority of Americans. In the past, tariffs have been used to bolster domestic industries and protect against foreign competition. However, due to the prominence of globalization that began during the twentieth and twenty-first centuries, tariffs would not have the same effect. Rather than investing in domestic industries, American companies will likely continue importing foreign goods, relying on cheaper overseas labor, paying the tariff, and passing the burden on to the consumer. Last week, Trump announced that he plans to enact a 25% tariff on imports from Mexico and Canada and an additional 10% on imports from China. In response, Mexican President Claudia Sheinbaum suggested raising their tariffs, which could escalate to a trade war that would raise prices on multiple goods Americans rely on, such as cars and lumber.
Meanwhile, the decreased tax revenue will lead to a reduction in crucial social programs such as SNAP (Food Stamps), ultimately making the poorest Americans the ones hit the hardest. In 2022, more than 718,000 Oregonians relied on SNAP benefits, around 17% of the entire state.(1) The deficit will also continue to explode since the revenue from the tariffs would not be nearly enough to replace the decreased revenue from lowered tax rates. This would cause our national debt to continue to grow and cause interest payments to grow even higher. I acknowledge that President Biden has kept the tariffs against Chinese goods imposed by the Trump administration. These tariffs primarily target steel, aluminum, and solar panels. However, according to the United States International Trade Commission, while the targeted domestic industries did gain, the downstream companies that rely on using these products to create a final good purchased by the consumer lost enough revenue to offset any gains made.(2)
That is not to say all tariffs are inherently bad. If used under certain circumstances, they could help stimulate domestic growth and create an economy capable of competing on a world stage, especially among emerging economies. However, the tariffs proposed would not be under those circumstances. I understand taking a different approach to our current, broken system. Our large annual deficit and growing national debt will cause problems unless we solve them now. I also understand the economic frustrations that many Americans have. Inflation has burdened us all, and I feel frustrated whenever I have to pay more each month as my pay stays the same. However, raising these tariffs will not solve the problems that most are facing. They will worsen these fiscal problems and cause further frustration with the status quo.
(1) Oregon - Supplemental Nutrition Assistance Program, (Washington D.C.: Center on Budget and Policy Priorities, 2023), https://www.cbpp.org/sites/default/files/atoms/files/snap_factsheet_oregon.pdf.
(2) Johanson et al. 2023, p. 22.
Bibliography:Johanson, D. S., Schmidtlein, R. K., Kearns, J. E., & Karpel, A. A. (2023). Economic Impacts of TariffsUnder Sections 232 and 301 on U.S. Industries (5405). United States International Trade Organizations. https://www.usitc.gov/publications/332/pub5405.pdf?source=govdelivery&utm_medium=email&utm_source=govdelivery
Oregon - Supplemental Nutrition Assistance Program. Washington D.C.: Center on Budget and Policy Priorities, 2023. https://www.cbpp.org/sites/default/files/atoms/files/snap_factsheet_oregon.pdf.
Written by Kevin Hansberger
This article was posted in News-Review on 2 Dec 2024.