By Ian Salisbury
March 7, 2018

President Trump’s proposed tariffs on steel and aluminum would land most heavily on businesses in just a handful of states, according to a new report by the Tax Foundation.

The hardest hit: Texas, New York, California, and Florida.

While President Trump ran, at least in part, on a promise to protect American industry with import duties, those plans took a back seat until last week when Trump declared he intended to slap 25% tariffs on imported steel and 10% on aluminum. The plan immediately sparked controversy, upsetting the stock market and precipitating the resignation of Gary Cohn, the director of National Economic Council.

On Tuesday, the Tax Foundation, a right-leaning Washington think tank, estimated that the immediate tax impact of the import duties could be as much a $9 billion. That figure represents the amount that steel ($7.3 billion) and aluminum ($1.7 billion) importers would pay directly to the U.S. Treasury. It does not include the overall economic impact, says study author Scott Hodge — which would include higher consumer prices and slower GDP growth.

“The ripple effects would be much larger,” Hodge says.

Although those ripples would likely affect the broader economy, the immediate impact of the tariffs would be relatively concentrated, he says, with businesses in just 10 states paying about 62% of that $9 billion.

The worst hit state, according to the Tax Foundation report, would be Texas, with its giant ports and equipment intensive natural resources-based economy. Texas businesses would end up owing nearly $970 million in extra taxes, roughly 11% of the national total.

Businesses in New York would owe another $759 million, while those in both California and Florida would both owe about $525 million extra. Utah rounds out the top five, with an expected additional burden of $505 million.

You can see the Tax Foundation’s full list of affected states here.


You May Like