TRUMP: Let's slap a 45% tariff on Chinese imports
"I would do a tax. And the tax, let me tell you what the tax should be … the tax should be 45%," Trump told the newspaper's editorial board in comments that were published Thursday.
The Republican presidential front-runner has made tough talk on China, particularly regarding trade, into a signature campaign issue.However, such a staggering tariff could also have a profound effect on the US economy.
Many economists believe tariffs like that proposal would contribute to what is called a "deadweight loss," or an inefficiency built into the economy. Put in other terms, the basic economic argument is that tariffs have winners and losers, but the total amount lost would be greater than the amount gained in revenue and in protected industries.
Trump told The Times that he considers himself a "free-trader." However, he said the US must flex its economic muscle to pressure China into creating a fairer trade balance between the two countries.
"The only power that we have with China," Trump said, "is massive trade."