WASHINGTON - Ten billion here, ten billion there: President Donald Trump's escalating tariffs on imports to the United States have begun to amount to serious money - and potentially to imperil one of the most resilient economies in American history.
Until now, the economy has largely shrugged off damage from Trump's trade wars. Even as the self-proclaimed Tariff Man piled import taxes on everything from Turkish steel to Canadian aluminum to Chinese burglar alarms, the job market has remained sturdy. At 3.6%, the unemployment rate is at its lowest point in a half-century. In July, the expansion that followed the Great Recession will become the longest on records dating to 1854.
But over the past month, Trump has made a higher-stakes gamble on the economy's durability. He's more than doubled tariffs on $200 billion in Chinese imports. He's preparing to tax an additional $300 billion in goods from China, extending his import taxes to everything Beijing sells to the United States.
Trump also said he would impose a 5% tax on Mexican imports starting Monday - a tax that would reach 25% by Oct. 1 if the Mexican government fails to stop a flow of Central American migrants into the United States.
Combined, the actions mark a broad escalation of Trump's trade wars. The new tariffs on Chinese and Mexican imports amount to potentially $190 billion a year in new taxes - paid by U.S. importers and typically passed on to consumers.
Researchers at UBS calculate that a 25% tariff on all Chinese imports would shave a full percentage point from U.S. growth over the next year. The economy grew 2.9% in 2018 and will likely be weaker for 2019. Add a 25% tax on Mexican goods, they say, and the United States could tumble into recession for the first time since 2009.