Robert VerBruggen reacts to CBO’s calculation that Donald Trump’s tariffs will reduce average earnings by 0.4 percent:
The median household income is roughly $60,000, so crude back-of-the-envelope math puts the typical cost somewhere around $240 per year. This is consistent with a lot of other work: The trade war isn’t exactly devastating to the average American family’s budget, but the costs add up over time.
Not quite: you have to add in the effect of higher prices for consumers thanks to retaliatory tariffs. CBO doesn’t estimate this for some reason, but it probably roughly doubles the impact on households. At a guess, CBO is estimating that tariffs will cost the average American household about $500 per year.
For comparison, the median American household pays about $2,000 in federal income taxes. Trump’s tariffs may be invisible to most people, but they’re still the equivalent of a 25 percent income tax increase. I’m pretty sure no conservative would ever describe this as “isn’t exactly devastating.”