Dems: Tariffs to Cost Households $2,50003/13 06:12

   Democrats warn in a study out Friday the administration's import taxes will 
cost American households an average of $2,512 in 2026, up 44% from $1,745 in 
tariff costs last year. And this at a time when U.S. consumers are already 
angry over the high cost of living and the war with Iran is pushing up energy 
prices.

   WASHINGTON (AP) -- President Donald Trump is scrambling to replace the 
revenue the federal government lost when the Supreme Court struck down his 
biggest and boldest tariffs last month.

   If the effort succeeds, congressional Democrats warn in a study out Friday, 
the administration's import taxes will cost American households an average of 
$2,512 in 2026, up 44% from $1,745 in tariff costs last year. And this at a 
time when U.S. consumers are already angry over the high cost of living and the 
war with Iran is pushing up energy prices.

   "Despite a Supreme Court ruling that much of Trump's tariff agenda is 
illegal, the Trump administration refuses to provide relief for families," said 
Sen. Maggie Hassan of New Hampshire, the top Democrat on the Joint Economic 
Committee. "As American families continue to struggle with high costs, the 
President keeps choosing to institute new tariffs that will push prices even 
higher."

   Calling the study "phony," White House spokesman Kush Desai said "President 
Trump will continue using tariffs to renegotiate broken trade deals, lower drug 
prices, and secure trillions in investments for the American people."

   Trump last year invoked the 1977 International Emergency Economic Powers Act 
(IEEPA) to impose double-digit tariffs on almost every country on Earth.

   But the Supreme Court ruled Feb. 20 that the law did not give the president 
the authority to levy tariffs. The government now must provide refunds -- 
expected to come to around $175 billion -- to the importers who paid the IEEPA 
tariffs now declared illegal.

   The administration has moved quickly to impose new tariffs, and Treasury 
Secretary Scott Bessent has said that that new levies "will result in virtually 
unchanged tariff revenue in 2026."

   Trump has already announced a 10% tariff, invoking Section 122 of the Trade 
Act of 1974, and may raise it to 15%. But those levies can only last 150 days 
unless Congress agrees to extend them. And the Section 122 tariffs are also 
being challenged in court.

   A sturdier option is Section 301 of the same 1974 trade law, which 
authorizes the president to impose tariffs and other sanctions on countries 
engaged in "unjustifiable," "unreasonable" or "discriminatory" trade practices. 
Trump, accusing China of using unfair tactics to gain an advantage in high tech 
industries, used Section 301 to impose tariffs on Chinese imports in his first 
term, and they withstood legal challenges.

   On Wednesday, U.S. Trade Representative Jamieson Greer, announced a sweeping 
Section 301 investigation into whether 16 U.S. trading partners, including 
China and the European Union, are overproducing goods, flooding the world with 
their products and hurting American manufacturers.

   "The United States will no longer sacrifice its industrial base to other 
countries that may be exporting their problems with excess capacity and 
production to us," Greer said in a statement. The probe is widely expected to 
end in a new round of hefty tariffs.

   "The fact that they launched 301 investigations is not surprising," said 
trade lawyer Ryan Majerus, a partner at King & Spalding and a former U.S. trade 
official. "We all knew that's what they were going to pivot to. The challenge 
is that this is way more sprawling than anyone expected.'' That is because so 
many countries were targeted and because the inquiry -- whether countries have 
excess industrial capacity and are overproducing goods -- "can be framed pretty 
broadly.''

   The administration is rolling out another Section 301 investigation into 
banning imported goods made by forced labor. Greer told reporters Wednesday 
that additional Section 301 investigations could cover issues such as digital 
services taxes, pharmaceutical drug pricing and ocean pollution.

   The administration is also expected to make more use of Section 232 of Trade 
Expansion Act of 1962, which allows the president to impose tariffs on goods 
deemed to be threats to national security after an investigation by the 
Commerce Department. The U.S. already has Section 232 tariffs on steel, 
aluminum, autos and auto parts and other products.

   The report from Democrats on the Joint Economic Committee finds that the new 
tariffs will increase the burden on American households this year. That is 
partly because the tariff revenue would be collected for the full year; Trump 
needed time to impose tariffs in 2025 and occasionally suspended them.

   The Democrats also assume that American households will absorb 100% of the 
tariff cost. They cite a Congressional Budget Office report concluding that 
importers can pass along 70% of the tariff costs to consumers. But the tariffs 
also allow domestic producers to raise prices -- because of less competition 
from imports and increased demand for their tariff-free products. Combined, 
passed-along costs from importers and higher prices from domestic companies 
effectively mean that consumers end up footing the entire U.S. tariff bill, 
according to CBO.

   The Trump administration's new tariff push comes as the war in Iran pushes 
up the price of gasoline and other commodities in the runup to November's 
midterm elections. Voters are already disgruntled by high prices.

   "If the affordability and other political issues really start to become 
cumbersome, that certainly can impact all this," Majerus said. "What the 
world's going to look like two months from now is going to be very different 
from what it is now.''