Update to this post.
In nominal dollar terms. Thanks, Trump.
Notes: Tax increase associated with announced Trump tariffs on Canada, Mexico, and China assuming a unitary price elasticity of import demand (orange bar), and assuming zero (orange bar plus light orange bar). Source: graphic from Factcheck (2012), modified by author. [graph edited 2/4]
The measures mean the US taxes additionally about $1.3 trn worth of goods (2023 amounts). That’s the biggest one year tax increase in dollar terms since… ever, at $252 bn ($192 bn assuming unit elasticity of demand and if Trump goes through with plans). Taxes collected by CPB, and going into the US Treasury.
That’s in nominal dollar terms. As a share of GDP, it’s 0.9%, 0.7% assuming unit elasticity.
By the way, Ontario’s retaliation raises Canada’s taxes on American — a 25% export tax on electricity exports. Canada exported is $4.2 bn in 2022, and about 25% of that is from Ontario. So add $260 mn to the tally.
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