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Tariffs will likely remain high even if Harris wins. But Trump could send them into the stratosphere. (Video)
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Tariffs will likely remain high even if Harris wins. But Trump could send them into the stratosphere. (Video)

Yahoo Finance is spending the final days of the 2024 campaign examining the key economic decisions the next president will face, like it or not. For an even more in-depth look at all the financial questions that matter most to your portfolio, please visit Yahoo Finance’s interactive guide to the 2024 elections.

One of Donald Trump’s most notable achievements in office was how he reoriented the political landscape around trade and tariffs, ushering in a new era of higher tariffs that have persisted and even increased slightly under the Biden administration.

The decision facing voters in this election is whether he will be able to shake up the status quo again.

Vice President Kamala Harris and her aides have given few details about her business plans, but if she takes action, she is widely expected to keep in place the new standard of higher rights created by Trump – possibly focusing on new rights. on “strategic sectors”.

Trump, by contrast, is promising a new wave of tariffs on the order of 10 times the level of tariffs he implemented during his first term, experts said, with a plan that includes general customs duties of 10% or more and 60% customs duties. % customs duties on China.

Yahoo Finance photo illustration (Images: Getty Images)Yahoo Finance photo illustration (Images: Getty Images)

Yahoo Finance photo illustration (Images: Getty Images)

He also promises things like a Trump Reciprocal Trade Act that would automatically impose tariffs on countries in response to their duties to the United States.

The effects would be felt throughout American life, even if Trump kept just a fraction of his promises.

One thing that seems off the table, at least for now, is an upcoming reduction in tariffs.

“Cutting tariffs is not on anyone’s agenda,” Richard Baldwin, professor of international economics at the International Institute for Management Development, said in a recent interview.

Baldwin added of Trump’s promises: “I think we have to take him at his word,” noting that it has the power to unilaterally lift its tariff regime.

During his term, President Trump imposed tariffs on a wide range of products from China as well as products such as aluminum and steel from Europe and Asia.

That’s about $80 billion in new tariffs that businesses pay at U.S. ports of entry.

The Biden administration has largely left Trump’s tariffs in place and even announced new functions in May on “strategic sectors” such as semiconductors and electric vehicles.

Harris should continue this general approach and unveiled a reindustrialization strategy aimed at encouraging specific sectors in the United States – from aerospace to AI to quantum computing critical minerals.

She did not focus on new tariffs at campaign stops, but rather on government incentives for certain industries, similar to Biden-era achievements like the bipartisan Infrastructure Act and the CHIPS and Science Act focused on semiconductors.

Biden and Harris aides have long pointed to the recent boom in U.S. factory construction as proof that their approach is one that works.

Harris also criticized Trump’s plans for new tariffs, comparing them to a national sales tax that she said would add more than $3,900 to the typical family budget, as businesses that pay the duties pass on the taxes. tariffs on end consumers.

Learn more: Trump vs. Harris: 4 ways the next president could impact your bank accounts

But the politics around tariffs could prevent any effort to reduce existing tariffs, which are particularly popular, especially in some swing states.

“If she wins, she won’t win because of California,” William Alan Reinsch of the Center for Strategic and International Studies said in a recent interview, citing Harris’ home state where tariffs are less popular .

“She will win because of Pennsylvania, Michigan and Wisconsin, and trade policy in those countries has not changed,” he added, noting broad support for existing tariffs on products like steel, aluminum and automobiles.

“She brings a different mentality to her work,” he said of his California origins as well as Minnesota’s agriculture-dependent Tim Walz’s selectionwhich was hit hard during Trump’s first round of tariffs.

“But that doesn’t change the policy.”

SILVER SPRING, MARYLAND - OCTOBER 23: Pictured in this photo are the names of 2024 presidential candidates, including Republican presidential nominee, former U.S. President Donald Trump, and Democratic presidential nominee, Vice -President Kamala Harris, appear on an absentee ballot October 23, 2024 in Silver Spring, Maryland. (Photo illustration by Chip Somodevilla/Getty Images)SILVER SPRING, MARYLAND - OCTOBER 23: Pictured in this photo are the names of 2024 presidential candidates, including Republican presidential nominee, former U.S. President Donald Trump, and Democratic presidential nominee, Vice -President Kamala Harris, appear on an absentee ballot October 23, 2024 in Silver Spring, Maryland. (Photo illustration by Chip Somodevilla/Getty Images)

The names of 2024 presidential candidates appear on an absentee ballot in Silver Spring, Maryland. (Illustrative photo by Chip Somodevilla/Getty Images) (Chip Somodevilla via Getty Images)

When it comes to Trump, the former president has a habit of keeping its commercial promises and undertakes what would be historical duties.

Trump calls tariffs “the most beautiful word in the dictionary” and has even proposed 2,000 percent tariffs on automobiles and said his goal in some areas is to implement “the highest tariffs elevated in history.

Perhaps the only question, with Trump likely able to cut Congress out of the process and pursue its policy unilaterally, it is a question of whether the courts intervene.

Learn more: What are tariffs and how do they affect you?

A recent analysis by Reinsch and Warren Maruyama, former general counsel to the U.S. Trade Representative, outlined the broad powers that allow presidents to impose tariffs themselves.

Another analysis by Alan Wolff of the Peterson Institute for International Economics warned against underestimating Trump’s tariffs. He highlighted the unilateral powers a president has and the unprecedented levels that tariffs could reach.

The effect “on the economy, on businesses, and on individual consumers and workers would be literally incalculable,” he wrote.

All that remains is the courts, where past challenges to Trump’s tariffs have failed. That could change depending on how vigorously Trump attempts to pursue a potential second-term agenda.

“No matter what he does, he will be sued,” Reinsch said, adding that the easiest legal path for Trump might be to start with his proposed 60% tariffs on China.

“You declare an emergency and you use the International Emergency Economic Powers Act,” he noted, adding, “It works best when there is a targeted offender.”

Baldwin added that political fallout may be the only drag on Trump’s agenda.

He predicts that just these 60% tariffs on China could “lead to a surge in inflation, particularly among the middle class.” It makes the last two years seem like a small thing.”

And that’s even before China retaliates, he added, which “could do a lot of damage.”

Ben Werschkul is Yahoo Finance’s Washington correspondent.

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