Trump's proposed tariffs on Mexico would be biggest tax hike in almost 30 years: report

President TrumpDonald John TrumpZuckerberg launches public defense of Facebook as attacks mount Trump leaning toward keeping a couple hundred troops in eastern Syria: report Warren says making Israel aid conditional on settlement building is 'on the table' MORE’s proposed tariffs on Mexican imports – an effort to pressure the country to halt the flow of migrants from Central America – could constitute the biggest tax hike on American consumers in nearly three decades, according to an analysis by the Tax Foundation.

The 5 percent tariff on Mexican goods is set to take effect June 10 and steadily increase until it reaches 25 percent “unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” according to a statement from the White House Thursday.

ADVERTISEMENT

Existing tariffs in place against Mexico would increase revenues by $69 billion, or about 0.32 percent of gross domestic product (GDP), according to the right-leaning Tax Foundation. The 5 percent tariff would increase this figure to about 0.40 percent of GDP. Tax increases under then-President Bill ClintonWilliam (Bill) Jefferson ClintonHouse Democrat pledges 'there will be open hearings' in impeachment inquiry Democrats dig in ahead of Supreme Court ruling on 'Dreamers' Even with likely Trump impeachment, Democrats face uphill climb to win presidency MORE in 1993 led to revenues of about 0.36 percent of GDP, according to the Tax Foundation.

“The Tax Foundation model estimates that if the Trump administration imposes additional tariffs on automobiles and parts, additional tariffs on products from China, and tariffs on products from Mexico, GDP would fall by an additional 0.50 percent ($124.82 billion), resulting in 0.33 percent lower wages and 387,041 fewer full-time equivalent jobs,” the foundation states.

The Tax Foundation’s estimates only apply to the initial 5 percent tariffs. If the White House makes good on its threats of 25 percent on all Chinese and Mexican imports, the revenues would reach 1.45 percent of GDP, a figure last reached after a 1968 tax increase, according to the Treasury Department.

On Sunday, acting White House Chief of Staff Mick MulvaneyJohn (Mick) Michael MulvaneyWhite House officials work to tamp down controversies after a tumultuous week Sunday shows — Mulvaney seeks to tamp down firestorm over quid pro quo comments, Doral decision Mulvaney says he thinks Trump knows people thought Doral decision looked 'lousy' MORE said President Trump is “deadly serious” about following through on the Mexican tariffs