A new report released by the Congressional Budget Office (CBO) is bad news for the American people because President Donald Trump’s trade war is not only having a negative impact on the economy for the next several years, household income is also taking a hit.
Trump insisted that he would grow the economy by 4 to 6 percent every year and claimed that trade wars are easy to win and would be good for the country.
But the latest report released by the CBO reveals the opposite.
It turns out that Trump’s tariffs on China and other nations as part of his global trade war directly harmed American household income.
“Tariffs are expected to reduce the level of real GDP by roughly 0.5 percent and raise consumer prices by 0.5 percent in 2020. As a result, tariffs are also projected to reduce average real household income by $1,277 (in 2019 dollars) in 2020,” the report said.
As we should all know, trade wars cause consumer prices to rise and having less money to cover the extra cost will ultimately result in an economic slowdown as people choose to cut back on their spending, which will have a negative effect on local businesses.
As the CBO points out:
[Tariffs] make consumer goods and capital goods more expensive, thereby reducing the purchasing power of U.S. consumers and businesses.4 Second, they increase businesses’ uncertainty about future barriers to trade. Such uncertainty leads some U.S. businesses to delay or forgo new investments or make costly adjustments to their supply chains.
For those who care about the deficit and the national debt, Trump’s trade war caused both to skyrocket, with the deficit projected to rise to $1 trillion in 2020 and to $1.3 trillion per year for the next decade. The national debt will nearly equal 100 percent of GDP by 2030 and nearly double that by 2050, which is disastrous for future generations of Americans.
As for economic growth, the CBO expects it to lag under 2 percent per year through 2030. Salon points out that economic growth under Trump is “slower than during the final three years of the Obama administration.”
And it’s not like economic experts have not been warning that Trump’s tax cuts and trade war are terrible policies.
In fact, the manufacturing sector is currently experiencing a recession and farmers are going bankrupt at a high rate.
Clearly, Trump repeatedly lied about the economy under his watch during the State of the Union Address earlier this week. He looked Americans in the eye and flat-out lied to them. This CBO report proves it.
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