A 20 percent global tariff and a 60 percent tariff on Chinese goods, one of several import tax ideas floated by Republican presidential candidate and former President Donald Trump, would increase household taxes of nearly $3,000 on average in 2025, according to a new analysis from the Tax Policy Center. Trump’s plan would reduce average after-tax income by 2.9 percent.

A separate Trump proposal — a 200 percent tariff on car imports from Mexico — would raise household taxes by an additional $600 on average, or about 0.6 percent. Estimated TPC.

TPC estimated that global tariffs would be 20 percent combined with China’s 60 percent import tax. would generate net new revenues of approximately $4.5 trillion over the next 10 years.

Reduce imports

The 20 to 60 percent tariffs themselves would generate about $6 trillion in new gross revenue, on top of the $1 trillion expected to be generated by current tariffs. But because these levies would likely reduce current and future U.S. income, corporate and individual tax revenues would decline by about $2.5 trillion.

Trump’s 20 percent global tariffs, plus his 60 percent tariffs on Chinese goods, would reduce imports by about $9 trillion over 10 years. Imports include common consumer goods such as many fresh fruits and vegetables, clothing, medicines, household appliances and furniture. They also include materials used by U.S. producers, such as automobile manufacturers and home builders.

Trump’s tariffs on Mexican automobiles would raise an additional $84 billion over 10 years. This would reduce imports of these vehicles by approximately $800 billion.

A global tariff of 10 percent

Earlier this year, TPC analyzed a reduced fare proposed by Trump.– a 10 percent tax on all imports combined with a 60 percent levy on Chinese imports. TPC found that this version would raise $2.8 trillion in net income over 10 years and reduce the average after-tax income of U.S. households in 2025 by about $1,800, or 1.8 percent.

This relatively less aggressive tariff plan alone would generate about $4.6 trillion in new gross revenue. But like the 20 percent version, it would also reduce projected domestic revenues and produce much lower total revenues after accounting for lower corporate and personal income tax revenues.

Both versions of Trump’s tariffs could significantly raise prices of imported goods since they would mainly be passed on to American consumers and businesses. This would reduce both inflation-adjusted domestic revenues and tax revenues.

The Federal Reserve could raise interest rates to offset these price increases. But it would probably be reduce the profits of American companies and the incomes of American workersand a projected decline in corporate and individual tax revenues.

Not to mention the reprisals

None of the TPC estimates take into account retaliation from U.S. trading partners whose exports would be affected by the tariffs. However, experience suggests that countries would respond by increasing tariffs on goods and services imported from the United States, which would reduce demand for American-made products and cost American workers jobs.

Vice President Kamala Harris, the Democratic presidential candidate, has remained largely silent on her tariff plans. Earlier this year, President Joe Biden increased tariffs on a handful of products imported from China, including electric vehicles, some computer chips, as well as steel and aluminum. However, Calculated TPC these tariffs have little effect on household income because they are very targeted. For example, almost no Chinese electric vehicles are currently sold in the United States.

Trump insisted his new tariffs would generate enough new revenue to replace the income tax. The $4.5 trillion in net new revenue he would get from a 20 percent global tariff and a 60 percent import tax on Chinese goods is a lot of money. But that would fall far short of replacing the $34 trillion in personal income tax revenue. Congressional Budget Office projects ofor the next decade. Import taxes also wouldn’t fund many of Trump’s other initiatives.

Trump’s 10% global tariffs and 60% import tax on Chinese goods would have a significant negative impact on American consumers and businesses. Doubling the global import tax to 20 percent would further reduce household incomes and cause even more damage to the national economy.