President Trump’s biggest political win, so far, is the tax-cut legislation he signed into law late last year. But Trump is now taking action that is essentially a tax hike on American consumers, and will offset a portion of the tax cuts he has been crowing about for nine months. And in typical renegade fashion, Trump is dismissing political orthodoxy by daring to hit voters with new taxes just weeks before a crucial election.

Trump now plans to impose 10% tariffs on $200 billion worth of Chinese imports, beginning Sept. 24. The tariff will rise to 25% by the end of the year. That’s in addition to a 25% tariff on $50 billion worth of Chinese imports Trump imposed during the summer. So by Election Day in November, Trump will have placed new tariffs on $250 billion worth of stuff Americans buy every day.

A tariff is a tax collected when imported goods enter the country. It raises the cost of the good by the amount of the tariff. So a 10% tariff on a $100 product would raise its cost to $110. Producers typically try to pass the added cost onto consumers, and as the cost of certain imported goods rises, the cost of similar products not subject to tariffs can also rise, since there’s less competitive pressure pushing prices down.

The new tariffs will raise the cost of thousands of everyday items, including electronics, appliances, bicycles, tires, toys, clothing and footwear. Based on last year’s level of imports, the new China tariffs amount to a tax hike of $32.5 billion per year. If the latest set of tariffs rises to 25% and stays in place for 2019, the total additional tax would be $62.5 billion next year. The Trump tax cuts, by contrast, lowered tax payments by about $130 billion per year. So by this simple math, the China tariffs would offset about one-fourth of the Trump tax cuts this year, and nearly one-half next year.

Waiting for a deal

Trump says that won’t happen. Tariffs, in his strategy, are a way of gaining leverage in negotiations meant to cement trade deals more favorable to the United States. Trump has said he wants a lower U.S. trade deficit with China, and better opportunities for American firms operating in China. Once there’s a deal with China, he’ll rescind the tariffs.

Except no deal is falling into place, creating what increasingly looks like an open-ended trade war destabilizing to both sides. Larry Kudlow, Trump’s top economic adviser, said on Sept. 17, “we are ready to negotiate and talk with China any time that they are ready for serious and substantive negotiations.” Chinese officials say basically the same thing. Yet talks have obviously gotten nowhere, and there’s no sign of a breakthrough any time soon.