Trade is a complex issue, and it’s one of the few subjects that even many within parties are divided on. But one thing is clear: Trump has no idea how his own proposed tariffs on China would impact Americans.
“Talks with China continue in a very congenial manner—there is absolutely no need to rush—as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Trump tweeted Saturday. “These massive payments go directly to the Treasury of the U.S.”
On Sunday, Trump continued this PR campaign by tweeting that the U.S. “will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries...”
“We will then spend (match or better) the money that China may no longer be spending with our Great Patriot Farmers (Agriculture), which is a small percentage of total Tariffs received, and distribute the food to starving people in nations around the world!” he continued. “GREAT! #MAGA”
This is not how these tariffs will work.
In an interview on Fox News Sunday, White House economic adviser Larry Kudlow undercut the president’s message about the money that’s apparently pouring in from China by admitting that these tariffs are actually paid by importers, not exporters.
“It’s not China that pays tariffs,” Fox anchor Chris Wallace said, stating the obvious. “It’s the American importers, the American companies that pay what, in effect, is a tax increase and oftentimes passes it on to U.S. consumers.”
“Fair enough,” Kudlow said in response. “In fact, both sides will pay. Both sides will pay in these things.”
Later, Kudlow clarified that China will not in fact pay, but “will suffer GDP losses and so forth with respect to a diminishing export market.”
“Both sides will suffer on this,” he added. Great!
The Trump administration and China ended another set of trade talks last week, and have yet to reach a deal. On Friday, Trump announced that the administration would raise tariffs on $200 billion of goods from China from 10 percent to 25 percent. The Chinese government promised to retaliate.
To be fair to the president, Trump’s concept of “paying” for things is pretty abstract. He has no idea how non-billionaires live their lives. And let’s not forget that in his mind, Mexico was going to, and eventually did pay for the wall. But one would think he could understand the basic fact that American companies are literally going to be paying these increased tariffs, not China. Guess not!
God help us all.