Opinion: Trump’s Tariffs Only Work if Americans Pay Them - - PressFrom - US

OpinionTrump’s Tariffs Only Work if Americans Pay Them

17:35  14 may  2019
17:35  14 may  2019 Source:   nymag.com

Trump says tariffs on $200 billion of Chinese goods will increase to 25% on Friday

Trump says tariffs on $200 billion of Chinese goods will increase to 25% on Friday In addition, Trump threatened to impose 25% tariffs on an additional $325 billion of Chinese goods "shortly." The president said that trade talks with China are continuing, but are moving too slowly as Beijing tries to re-negotiate. Trump tweet: For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars....

The contents just got a little more expense. Photo: Mark Ralston/AFP/Getty Images. President Trump is fond of saying China “ pays ” the tariffs he imposed, and a lot of journalists (including me) are fond of pointing out the tariffs are actually paid by Americans .

Trump ’ s Tariffs Only Work If Americans Pay Them . On Fox News Sunday, the White House economic adviser contradicted Trump ’ s false claims on the tariff hike, admitting that it will hurt the economy.

Trump’s Tariffs Only Work if Americans Pay Them© Mark Ralston/AFP/Getty Images The contents just got a little more expense. Mark Ralston/AFP/Getty Images

Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of MSN or Microsoft.

President Trump is fond of saying China “pays” the tariffs he imposed, and a lot of journalists (including me) are fond of pointing out the tariffs are actually paid by Americans. Specifically, they are paid by American importers of foreign goods, who presumably seek to pass the cost of the tariff on to end consumers.

Trump says in 'no rush' for China trade deal, defends tariffs

Trump says in 'no rush' for China trade deal, defends tariffs U.S. President Donald Trump said on Friday he was in "absolutely no rush" to finalize a trade agreement with China as negotiators from both countries prepared to continue talks in Washington, in a sign that discussions could go past this week. require(["medianetNativeAdOnArticle"], function (medianetNativeAdOnArticle) { medianetNativeAdOnArticle.

In other words, President Trump ' s steel tariffs are working . ( They are not, however, helping to pay down our federal deficit as an added bonus, despite his bizarre Thanks to retaliatory tariffs on pork imposed by China, some pig farming mavens in this country say they will be cutting back production.

The Trump tariffs are a series of tariffs imposed during the presidency of Donald Trump as part of his economic policy. In January 2018

The New York Timespoints to recent economic research on Trump’s tariffs, including two papers estimating that 100 percent of the cost of tariffs is being borne by American consumers. One of the research teams determined this by looking at changes in the price indices for highly specific goods. They found products not subject to new tariffs had approximately flat prices, while products subject to new tariffs went up in price approximately proportionately to the tariffs imposed. That’s pretty straightforward: Americans pay.

But other commentators like to point out this isn’t a law of nature: The person who remits a tax is not necessarily the person who bears the economic cost of the tax, as you can already tell from the fact we’re assuming a tax paid by importers gets passed through to consumers. What if it gets passed somewhere else? For example, what if it gets passed back to the Chinese exporter, who must cut his prices so the American importer is still interested in buying his goods?

Trump warns China not to retaliate against tariff hike

Trump warns China not to retaliate against tariff hike U.S. President Donald Trump on Monday warned China not to retaliate against a hike in tariffs he imposed last week and said U.S. consumers would not pay for any increase in duties. There "is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today ... China should not retaliate-will only get worse!" Trump tweeted, adding that tariffs can be avoided if manufacturers shift production from China to other countries.

The Real Pain From Trump ’ s Tariffs Trickles Down to Consumers. For a big country such as the U.S., slapping hefty tariffs on imports can make sense under certain conditions. If many foreign suppliers are competing for sales in the U.S., they could be willing to absorb the cost of a tariff to

Trump ’ s Tariffs Only Work If Americans Pay Them . China announced that it will impose additional tariffs on some American goods in retaliation for the latest increase of U.S. duties on 0 billion of Chinese imports.

Tyler Cowen, for example, takes issue with headlines like “China isn’t paying.” Cowen argues, convincingly, that China is likely to face substantial economic costs from the tariffs in the long run. But I don’t think that observation is in conflict with the idea that Americans bear the tariff costs in full. That’s because there is more than 100 percent of the tariff to go around. Tariffs are explicitly designed to create what is called a deadweight loss; not only do people pay the tariff, they also make inefficient choices to avoid paying the tariff, reducing economic output. So, the economic cost of a tariff exceeds the amount actually collected by the government. American consumers can pay the whole amount of tariffs actually collected and there can still be plenty of economic loss left for China to bear, too.

The assumption that tariffs are borne by American consumers is embedded in Trump’s eagerness to impose the tariffs in the first place. The point of a protectionist trade policy is to make it more economical to produce goods in the United States. This is where the deadweight loss comes from: Economic actors, seeking to avoid the tariff, move toward producing things somewhere other than the place where it costs least, and this reduces overall economic output.

Trump warns China not to retaliate on tariffs, insists they won’t hurt U.S. consumers

Trump warns China not to retaliate on tariffs, insists they won’t hurt U.S. consumers President Trump warned China against retaliation in a series of early morning tweets Monday and insisted there was “no reason” for U.S. consumers to absorb the costs of higher tariffs that took effect Friday. require(["medianetNativeAdOnArticle"], function (medianetNativeAdOnArticle) { medianetNativeAdOnArticle.getMedianetNativeAds(true); }); Trump wrongfully suggested that the impact of the tariffs could be mitigated by simply buying products manufactured in the U.S., or other countries not subject to tariffs.

Donald Trump ' s China tariffs will tax Americans . An additional 0 billion of Chinese goods are set to A tariff is essentially a sales tax on merchandise from a certain country. It is imposed at the port of In many cases, they are required to share trade secrets in return for being allowed to do business.

President Donald Trump has heightened tensions with China by escalating his tariffs on 0 billion in Chinese goods from 10% to 25%. Please read the rules before joining the discussion. Trump ’ s tariffs on China: What are they ?

This only works if the tariff is allowing American producers to sell at a higher price than they could if they faced tariff-free (or lower-tariff) Chinese competition. If Chinese producers ate 100 percent of the cost of the tariff, then Chinese goods wouldn’t go up in price for American buyers. American manufacturers wouldn’t gain any pricing leverage, and American consumers wouldn’t have any reason to change what they buy. If Americans didn’t really pay the tariffs, they would be pointless.

Of course, tariff advocates could say higher prices are desirable (though Trump won’t say that out loud). Those higher prices go to support an American industry; they reflect the fact that tariffs have protected certain American workers from competition with Chinese people willing to work for less. Unfortunately, there are offsetting effects. Higher prices reduce disposable income, meaning people buy less of something, costing jobs somewhere. And retaliatory tariffs and economic weakness in China lead to less demand for American exports.

In the medium term, Cowen thinks the tariff burden on American consumers will abate as production moves away from China to countries poorer than China which are not subject to punitive tariffs, such as Vietnam. If this is true, it will mean Americans are paying less in tariffs because less in tariffs are being paid overall, not because the cost of the tariffs starts being borne by someone in China. And if this is true, it again undermines the purpose of Trump’s tariff policy, which presumably is to shift production toward the United States, not toward Vietnam.

In practice, the economic effect of Trump’s tariffs has not been especially large, at least so far. Both of the papers discussed by the Times found a welfare loss to Americans of about $20 per person from Trump’s tariffs in 2018. This is why higher prices of specific goods particularly affected by tariffs, such as washing machines, have not led to a perceptible overall spike in inflation. But Americans are paying — and as the tariffs get bigger, we will be paying more.

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Trump administration will delay auto tariffs for up to six months.
The White House had to decide by Saturday whether to slap tarifffs on autos over what it calls national security concerns.

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