U.S. Will Feel Trump’s New Tariffs on Chinese Goods

Donald Trump has levied additional tariffs on China, after recent trade talks between the U.S. and China ended with no deal. On Friday, May 10, Trump raised tariffs from 10 percent to 25 percent on $200 billion worth of products imported from China.

Trump maintains that the new tariffs will mainly cost China, not the U.S. “The tariffs paid to the U.S.A. have had little impact on product cost, mostly borne by China,” he tweeted. 

“Our country can take in $120 billion a year in tariffs, paid for mostly by China, by the way, not by us,” Trump said. “A lot of people try to steer it in a different direction. Ultimately it’s paid for largely by China.”

Many economists disagree, however.

Even White House Chief Economic Adviser Larry Kudlow essentially disagreed with Trump during an interview with Chris Wallace of Fox News Sunday. When questioned about the new tariffs, Kudlow admitted that the increased tariffs will not only have consequences for the Chinese, but also for U.S. consumers and businesses.

“It’s not China that pays the tariffs, it’s the American importers, the American companies that pay what, in effect, is a tax increase and often passes it off to U.S. consumers,” probed Wallace.

“Fair enough,” responded Kudlow. “In fact, both sides will pay… The Chinese will suffer GDP losses and so forth…”

“[China] may suffer consequences, but it’s U.S. consumers and businesses who pay, correct?” Asked Wallace.

“Yes, to some extent,” Kudlow said. “I don’t disagree with that.”

According to experts from Princeton and Columbia Universities, as well as experts from the Federal Reserve Bank of New York, the tariffs imposed on China in 2018 have already increased American consumer costs by $1.4 billion per month.

Additionally, that round of tariffs on crops such as corn and soybeans that are exported to China made those markets for corn and soybeans difficult or impossible for many farmers. Tariffs on steel and aluminum have increased the prices of farm machinery, as well as appliances.

Meanwhile, business owners and manufacturers are preparing for the impact of the newer, steeper tariffs. At 25 percent, the new tariffs will have a deeper and wider impact on the prices of goods in the U.S., from finished goods imported from China, to imported raw materials and finished goods made with those raw materials in the U.S.

“The latest round of tariffs will add another $500 a year in costs for the average American household…And that could grow,” says economics professor Katheryn Ross of the University of California at Davis. 

Indeed, Trump continues his threat to broaden tariffs to apply to all Chinese imports.

What Trump’s trade war with China means for American consumers | 
PBS NewsHour [2019-05-13]

Larry Kudlow on rising tensions and Trump’s China strategy |
Fox News [2019-05-12]

Trump Says His New Tariffs Will Have America Raking in the Money

Donald Trump is patting himself on the back because of the wealth he thinks his tariffs on China are bringing the U.S. Beginning on Monday, September 24, the Trump administration will impose tariffs on $200 billion worth of consumer products from China. Unlike the previous Trump tariffs on aluminum and steel, Trump’s latest round of tariffs will directly impact everyday products that Americans buy, such as furniture, lamps, and car parts.

Trump stated earlier this week at the White House that “China is now paying us billions of dollars in tariffs.” He went on to say that the Treasury Department was collecting “tremendous amounts of money, which is great for our country.”

In reality, write David J. Lynch and Damian Paletta of The Washington Post, “Tariffs are taxes that are paid by Americans who import goods from abroad. Through the end of August, the administration had collected nearly $22 billion in revenue because of its new tariffs, according to the nonpartisan Tax Foundation.”

American importers will begin paying an extra 10 percent tariff for items that are impacted. By the end of 2018, that tariff will increase to 25 percent.

Even if Trump’s tariffs are not exactly bringing in huge piles of wealth to the U.S., at least Americans will hardly notice any price increases in consumer goods, or so says one mega-wealthy Trump official. Wilbur Ross, U.S. Department of Commerce Secretary, says that Americans won’t feel the price increases because they’ll be spread across so many products. Or at least the increases will be miniscule (Miniscule probably means something slightly different to Ross, who, in 2016, according to ThinkProgress, was worth $2.9 billion).

Even if Americans do end up suffering a little from price increases, though, what’s a little pain, in the grand scheme? Donald Trump thinks that Americans, in their great loyalty to Trump, are so eager to place sanctions on China that they’ll be happy to endure a little hardship by paying more for things.

On September 18, Trump tweeted, “China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me. What China does not understand is that these people are great patriots and fully understand that…..”

Not all right-wingers, however, support the idea that Trump’s tariffs will benefit Americans. Some project that for those who benefited from earlier tax cuts, the tariffs will cancel out those gains. In addition, current American wages are not keeping up with the rate of inflation. With additional costs resulting from Trump’s tariffs, Americans’ buying power will decrease even more.

Wilbur Ross makes case that consumers won’t notice price increases | CNBC [2018-09-18]

Will American consumers pay the price for Trump’s tariffs? | Fox Business [2018-09-18]