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Many of President-elect Trump's economic promises involve tariffs. NPR White House correspondent Danielle Kurtzleben reports they could be hard or even impossible to keep.
DANIELLE KURTZLEBEN, BYLINE: According to Donald Trump, tariffs can do all sorts of good.
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DONALD TRUMP: The word tariff, properly used, is a beautiful word - one of the most beautiful words I've ever heard. It's music to my ears.
KURTZLEBEN: On the campaign trail, he said tariffs could raise revenue.
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TRUMP: And we will take in hundreds of billions of dollars into our Treasury and use that money to benefit the American citizens.
KURTZLEBEN: He also said tariffs would boost U.S. manufacturing. Trump said he'd impose tariffs on cars made in Mexico.
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TRUMP: The only way they'll get rid of that tariff is if they want to build a plant right here in the United States, with you people operating that plant.
KURTZLEBEN: At a recent press conference, he also said tariffs could stem illegal immigration and drugs.
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TRUMP: We're going to put very serious tariffs on Mexico and Canada because Canada - they come through Canada, too. And the drugs that are coming through are at record numbers.
KURTZLEBEN: It sounds great - one simple trick to tackle fentanyl, debt and jobs. But economists say tariffs just can't do all of that, especially not simultaneously. Here's Erica York, vice president of federal tax policy at the Tax Foundation, a right-leaning economic think tank.
ERICA YORK: You can have a tariff for revenue or you can have a tariff for restriction, but you can't have both.
KURTZLEBEN: To get super basic, a tariff is a tax that American importers pay for goods from other countries. So, yes, tariffs do bring in some revenue, except Trump also wants tariffs to boost manufacturing. The idea here is to make, say, foreign cars more expensive, meaning Americans would buy fewer foreign cars. But if Americans buy fewer foreign cars, tariff revenue goes down. And that's not the only contradiction York sees in Trump's policy. If a Trump tariff threat succeeds in getting Canada or Mexico to crack down on drugs, it wouldn't raise revenue or protect American workers.
YORK: The way the incoming Trump administration is talking about it is that they can have their cake and eat it, too, but that is just not the case.
KURTZLEBEN: Trump's tariff proposals go way beyond what he imposed in his first term. He has floated tariffs of up to 60% on Chinese goods, plus a proposed 25% on Canada and Mexico. He has even suggested a blanket 10- to 20% on all imports. And this week on social media, Trump once again suggested that tariffs would not only raise revenue but replace other tax revenue. He has often pointed to the 19th century - before the federal income tax - as an era he admires.
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TRUMP: It'll make our country rich. You go back and look at the 1890s, 1880s, McKinley, and you take a look at tariffs, that was when we were at our - proportionately the richest.
KURTZLEBEN: To be clear, many experts say it would be impossible to boost tariff revenue the way Trump wants. After all, last year, tariffs accounted for just 2% of government income. Kimberly Clausing is one of those experts. She's at the Peterson Institute for International Economics and worked at the Biden Treasury Department. She adds that tariffs will also raise prices while, at the same time, higher-income people would be helped by Trump's proposed tax cuts.
KIMBERLY CLAUSING: I think a cynical reading of what the Trump administration is suggesting is a bunch of regressive tax cuts that help those at the top of the distribution that are paid for with a regressive consumption tax that's going to hit the poor the hardest.
KURTZLEBEN: NPR asked the Trump team to explain how tariffs can accomplish all of Trump's stated goals. They didn't answer specifically, saying instead that tariffs will protect American manufacturers and workers. When Trump takes office next week, he'll have the opportunity to show Americans just how far he's prepared to go with this strategy.
Danielle Kurtzleben, NPR News.
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