Farmland owners and investors now must figure out what is bluster, campaign rhetoric, and threats to impress the voters and what will actually become policy now that Donald Trump will become president of the United States again.
Trump, the three-time Republican presidential nominee, defeated Vice President Kamala Harris, the Democratic nominee, on November 5th.
Trump capitalized on economic anxiety – some of it real and some of it exaggerated during the campaign—of people across the country as he defied the odds and became only the second person in the country’s history to become president a second time after losing his re-election effort.
RELATED: Get your history fix by checking out how Grover Cleveland got elected in 1892 after losing re-election four years prior, which allowed him to become the country’s 22nd and 24th president. Read the article in the Washington Post here.
With Trump, it can be difficult to figure out what is a serious policy proposal and what is political talk. But Trump has talked often about raising tariffs.
That could have a significant impact on both producers and consumers. Numerous economists and business leaders have already spoken out about how significantly higher tariffs, as Trump has threatened, would be detrimental.
Trump has talked about a 10-20% tariff on most imported goods, a 60-100% tariff on products from China, and a 200% tariff on automobiles imported from Mexico.
NBC laid out the two possible goals of the higher tariffs:
“One is to protect certain domestic industries. By making it more expensive to import a product, the U.S. government effectively prevents foreign firms from undercutting the prices of American companies.
The other is to generate revenue for the U.S. government. The nonpartisan Tax Foundation estimates that a 10% universal tariff would raise $2 trillion in revenue for the federal government from 2025 through 2034, and a 20% tariff would raise $3.3 trillion.”
Tariffs could be a significant source of new revenue for the federal government at a time that the nation’s debt pushes toward $36 trillion.
Trump’s budgeting during his first term (higher spending and federal tax cut) added an estimated $8.4 trillion to the country’s debt, according to the Committee for a Responsible Budget.
RELATED: Read the analysis here from the Committee for a Responsible Budget on how much the tax cuts passed during the Trump administration contributed to the national debt.
Seeking Alpha looks at how higher tariffs would affect manufacturing and the automobile industries.
CNBC reported on how higher tariffs might raise costs up to $3,000 per household annually, according to The Tax Policy Center and Peterson Institute for International Economics.
However, Oren Cass, executive director at American Compass, wrote in an Atlantic column that economists are quick to dismiss Trump’s ideas but may not fully evaluate what could be a positive for tariffs: that they could lead to increased production of certain goods in the United States.
Will Trump go through with the tariffs at the level that he has threatened? Has he found a way to levy them without adverse effects on the American economy?
After he takes office in January, his actions will answer those questions.
If he can’t, he will do the opposite of what voters concerned about escalating costs wanted when they re-elected him.
