Peter Schiff warns Trump’s 25% tariffs on Canada, Mexico could amount to a $250B tax hike for Americans, predicts much higher prices — but sees ‘big gains’ ahead for this safe-haven asset

In a post on X, he warned, “Assuming no exemptions, that's a $250 billion tax increase on Americans, which equates to about $2K per household per year.”

However, that doesn’t mean the government will collect the full amount of any tariffs imposed on Canadian, Mexican or Chinese products. In a followup post, Schiff pointed out that many Americans will simply forgo purchasing now-costlier imported goods, reducing the expected tax revenue.

“So, consumers go without the products, and the government goes without the tax,” he wrote, underscoring the broader economic strain.

Brace for higher prices

Tariffs are pitched as a way to boost domestic manufacturing by making imports more expensive, potentially encouraging local production. But Schiff warns that even if more goods are made in the U.S., the outcome won’t necessarily be good news for consumers.

“If we are going to make the products we now import, which is something we will be forced to do eventually anyway, it means prices will be a lot higher,” he cautioned noting that building new factories and training workers is expensive.

Schiff isn’t alone in his concerns. While tariffs can shield domestic industries from foreign competition, they often lead to higher costs for consumers as businesses pass on the added expenses.

This trade-off has long been debated by economists, who see tariffs as a double-edged sword — offering some protection to local producers but at the expense of affordability.

It’s not the first time Trump has employed tariffs. He did so in 2018, during his first term in office. The following year, economists from the Federal Reserve Bank of New York, Princeton University, and Columbia University published a joint study analyzing the costs and benefits of Trump’s tariffs.

Their conclusion was clear: “The tariff revenue the U.S. is now collecting is insufficient to compensate [for] the losses being borne by the consumers of imports.”