While President Donald Trump has boasted that his tariffs imposed on China and other countries have made billions of dollars for the U.S., the reality is that no foreign country has actually paid for any of it.
Bloomberg reported that more than $13 billion in duties were assessed on imported goods as of Dec. 18, according to data from U.S. Customs and Border Protection. But while Trump has suggested that China and other countries are paying for these tariffs, trade economists say that simply isn’t the case. Instead, U.S. businesses and consumers could ultimately pay the biggest price for these tariffs due to higher costs.
Johns Hopkins University applied economics professor Steve Hanke, a member of the Council of Economic Advisers under President Ronald Reagan, recently tweeted: “Tariffs on Chinese imports are paid by Americans, not by the Chinese or their government. The President’s tariffs are simply a #tax on American consumers.”
And earlier this month Purdue University agriculture economist Wally Tyner noted that the trade war between the U.S. and China has ended up costing billions of dollars for both sides during 2018, with agriculture taking the biggest hit. The tariffs have also resulted in an additional $1 billion per month in costs for the technology industry, and have hurt the U.S. retail, manufacturing and construction markets, with increased costs for goods.
“Let me be very clear: Tariffs are taxes paid by American families and American businesses — not by foreigners,’’ Thomas Donohue, president of the U.S. Chamber of Commerce, said in his annual state of American business address last week.
But Trump has insisted that the long-term benefits from new trade deals will make any current economic strain worth it. And executives from some of the country’s biggest tech companies reportedly agree with him. Last week, CNBC’s Jim Cramer said that during a trip to San Francisco last week a “surprising number of people in the tech industry” said they were fine with with any short term issues if it resulted in a better trade relationship with China.
“What they said was ‘If we’re going to take on China, now’s the time to do it,’” Cramer was quoted as saying. “They may not be fans of President Trump, but they’re on board with the trade war.”