Tariffs on Chinese imports have existed since the 1700s, generating billions in revenue for years before Trump came into office.
During President Barack Obama’s final year in office, tariff revenue from Chinese imports totaled over $12 billion, according to data from the U.S. International Trade Commission.
That amount increased after Trump’s first round of tariff hikes to over $22 billion, the same federal data shows.
Trump did dramatically raise the total revenue generated from Chinese imports by adding tariffs on hundreds of billions of dollars’ worth of goods.
In 1890, tariff hikes raised the average duties on foreign imports from 38% to nearly 50%.
The president-elect Donald Trump asserted that the U.S. S. In a news conference this week, he defended his plan to increase tariffs on goods from nations like China and Mexico, but historians say his claims are unfounded.
Specifically, Trump overstated the effect of tariff increases during his first term, making the untrue assertion that “no other president took in 10 cents” of trade collection revenue on imports from China. Additionally, Trump cited tariff hikes from the 19th century supported by former President William McKinley as proof that his plan could boost the economy.
However, statistics reveal that tariffs on Chinese imports had been bringing in billions of dollars for the federal government long before Trump took office, and historians claim that the 1890s high tariff period was difficult for Americans’ economy.
Tariffs are levied as a percentage of the price that importers pay foreign sellers and are considered taxes on imports. They receive payment from the United States, not from other countries. S. . businesses that frequently increase prices in order to pass the cost on to American consumers.
In his next term, Trump has promised to impose a 25 percent tariff on all goods from Canada and Mexico and an additional 10 percent tax on all goods from China. Census Bureau data shows that Americans spend over $1 trillion annually on goods from those three nations.
What Trump misunderstands about China’s tariff history.
Trump reiterated a claim he made repeatedly during the campaign trail during his press conference this week: that his administration received billions of dollars from tariffs on Chinese goods, while his predecessors received virtually nothing.
Before Trump took office, tariffs on Chinese imports had been in place since the 1700s and were bringing in billions of dollars annually.
According to U.S. data, tariff revenue from Chinese imports reached over $12 billion in the last year of President Barack Obama’s administration. S. Commission on International Trade. The same federal data indicates that amount rose to more than $22 billion following Trump’s initial round of tariff hikes.
Trump did significantly increase the overall amount of money received from Chinese imports by imposing tariffs on goods valued at hundreds of billions of dollars. However, the Congressional Research Service this month found that tariff collections have never made up more than 2 percent of federal revenue in the past 70 years, despite that increase.
In order to help pay for the cost of income tax cuts, the president-elect has claimed that his tariff plan for his next term could generate income. According to Goldman Sachs, tariff revenue from Trump’s proposed taxes on goods from China, Mexico, and Canada could reach just under $300 billion annually, up from $77 billion in fiscal year 2024.
However, according to Judith Goldstein, a professor of political science at Stanford, tariffs had not been considered a major source of revenue since the federal income tax was implemented in 1913.
As the U. S. . became more globally active, the impact of tariffs on domestic production and prices became a greater concern,” Goldstein stated.
Additionally, Trump has maintained that his tariff plan will help protect the U.S. S. . firms. There is some evidence that the customs duties he implemented during his first term increased employment in particular industries, such as the production of washing machines, according to research from the think tank Brookings Institution. But the Fed also said that manufacturers had to deal with higher raw material prices and retaliatory tariffs from other countries.
What Trump misunderstands about the McKinley tariffs.
As further proof that these customs taxes can benefit the United States, Trump this week pointed to McKinley’s 1890 tariff increases. S. .
When we were proportionately the richest, Trump remarked, “you go back and look at the 1890s, 1880s, McKinley, and you take a look at tariffs.”.
Increases in tariffs caused the average duty on foreign imports to rise from 38 percent to almost 50 percent in 1890. Doug Irwin, an economics professor at Dartmouth College, claims that McKinley, who was then a representative for Ohio, pushed for the taxes in order to shield his state’s steelworkers from outside competition.
But the decade that followed these increases was characterized by economic difficulties.
“The U. A. entered a depression in 1893, and it wasn’t until the middle of the 1890s that we began to recover. Thus, overall, the 1890s were a bad decade for the United States. S. . “economics,” Irwin expressed.
Moreover, the Office of the Historian in the House of Representatives reports that McKinley’s tariff bill increased the cost of items like clothing and shoes, causing a backlash among voters that cost Republicans 93 seats in the subsequent election.
A question about why Trump claimed that America was “proportionately the richest” following the passage of this bill was not answered by his transition team.
The gross domestic product per capita for Americans has significantly increased, according to historical data, from roughly $6,400 in the early 1890s (in 2017 dollars) to roughly $69,000 in 2024 dollars.
Why he is disparaging the 1890s as this golden age is unclear. As far as those who experienced it at the time were concerned, it wasn’t a good time,” Irwin said.
