A new analysis suggests that former President Donald Trump’s proposed tariffs could significantly reduce disposable income for millions of Americans, with lower-income households bearing the brunt of the economic strain.
The Yale Budget Lab study, cited in an Axios report, highlights how these tariffs could disproportionately impact working-class Americans, contradicting Trump’s campaign promises of economic relief.
If Trump enacts a 20 per cent across-the-board tariff, and other countries retaliate with their own trade restrictions, the lowest-income households could see their disposable income shrink by up to 5.5 per cent. These Americans, already struggling with inflation and rising living costs, would face even greater financial hardship due to higher prices on essential goods.
Middle-income families aren’t spared either. The study estimates that an average middle-class household could see an additional $3,800 in yearly expenses due to price hikes caused by tariffs. While this group may not face as severe an impact as lower-income individuals, their increased financial burden could lead to reduced savings and spending, ultimately slowing down economic growth.
Although wealthier households would see a smaller proportional hit, they would still experience economic pain in pure dollar terms. High-income families could pay an estimated $9,500 more per year due to increased costs.
While they may be able to absorb these expenses better than lower-income groups, tariffs could still affect their investment portfolios. As inflation rises and consumers Read More….