Tax Notes Talk Trump’s Tariff and Tax Policy 2.0
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May 16, 2025 
Industry experts Ernie Tedeschi, former White House economic advisor at Yale, Erica York from the Tax Foundation, and transfer pricing guru Ryan Finley dive into the complexities of Trump's tariff policies. They discuss the economic impacts of tariffs on both domestic and international markets, analyze trade deficits beyond numbers, and scrutinize the effectiveness of tariffs compared to other revenue methods. The conversation also touches on the relationship between tariffs and digital taxation, highlighting the challenges tax advisors face amidst shifting policies.
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Complexity of U.S. Tariff Regime
- The U.S. currently imposes tariffs on about 70% of goods imports, with complex layering and exceptions creating confusion.
- The 10% global tariff seems likely to persist along with various steel, aluminum, and auto tariffs pending ongoing tariff negotiations.
Trump's Tariff Skepticism Root
- Trump's tariffs stem from his deep skepticism about trade and belief that reducing trade benefits the U.S. economy.
- More sophisticated justifications, like raising revenue or currency goals, are secondary and often contradictory.
Understanding Trade Deficit Implications
- The U.S. trade deficit reflects spending-income mismatches, not inherently bad trade policy.
- Borrowing from abroad can be positive if it funds good investment, but negative if it finances consumption requiring future tax hikes.