CLAIM: Kamala Harris said on Thursday that Donald Trump’s proposal to impose a 10 percent tariff on imports would be a sales tax on Americans.
In her speech at the convention, Harris claimed Trump’s tariffs would be a “national sales tax, a Trump tax.”
VERDICT: FALSE.
Tariffs are paid by merchants who import goods from foreign manufacturers and not by consumers.
While critics of tariffs frequently claim that importers will pass the cost of tariffs on to consumers, there is little evidence to support that view. When Trump imposed tariffs on goods from China and on imported steel and aluminum, the prices of consumer goods did not rise.
Typically, when a large economy imposes tariffs, the exporters reduce their prices to stay competitive and defend their market share. As a result, much of the cost of the tariff is borne by the exporters rather than consumers. To the extent that tariffs are not paid for by exporters, they tend to be absorbed by the importing merchants rather than consumers.
Tariffs are certainly not a national sales tax because they only apply to imported goods, which make up a small portion of the goods and services purchased by U.S. consumers.
