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PoliticsAP FACT CHECK: 'Tariff Man' Trump wrong on import taxes

02:30  05 december  2018
02:30  05 december  2018 Source:   msn.com

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THE FACTS : Wrong country, wrong numbers, wrong description of legal status of the recipients. Besides that, immigrants who are in the U.S. illegally do Most automakers, including those based in Detroit, import vehicles from abroad that would be affected by any tariffs . And U.S. car exports would

The import taxes imposed on steel and aluminum have been pressure points. In theory, the tariffs should add money to federal coffers. The 25 percent tax the Trump administration slapped on billion of Chinese imports should raise .5 billion if the flow of goods continues without interruption.

AP FACT CHECK: 'Tariff Man' Trump wrong on import taxes© The Associated Press President Donald Trump and first lady Melania Trump hold hands as they leave Blair House after visiting with the family of former President George H. W. Bush, Tuesday, Dec. 4, 2018, in Washington. (AP Photo/Jacquelyn Martin)

WASHINGTON — President Donald Trump promised on Twitter that tariffs would maximize the country's economic heft and "MAKE AMERICA RICH AGAIN."

Almost all economists say the president is wrong. That's because tariffs are taxes on imports. They can cause higher prices, reduce trade among countries and hurt overall economic growth as a result.

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President Donald Trump wrongly said that “nobody from this country knew” about Mexico’s value-added tax until after NAFTA was signed. This turns the VAT into an implicit tariff on US exporters over and above the US corporate income taxes “It is not a discriminatory tax on imported products.

The import taxes imposed on steel and aluminum have been pressure points. In theory, the tariffs should add money to federal coffers. The 25 percent tax the Trump administration slapped on billion of Chinese imports should raise .5 billion if the flow of goods continues without interruption.

The president's tweet on Tuesday followed an announcement that the U.S. would not increase a 10 percent tariff on $200 billion of Chinese goods in 2019. The two largest countries are in the middle of negotiating their terms of trade, after Trump said cheap imports from China were impoverishing the United States.

After Trump announced steel and aluminum tariffs earlier this year, the University of Chicago asked leading academic economists in March whether Americans would be better off because of import taxes.

Not a single economist surveyed said the United States would be wealthier.

Nobel Prize-winning economist Richard Thaler answered the survey by saying, "In net we want more trade not less. This is unlikely to help and runs the risk of starting a trade war. SAD."

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THE FACTS : Wrong country, wrong numbers, wrong description of legal status of the recipients. Most automakers, including those based in Detroit, import vehicles from abroad that would be affected by any tariffs . And U.S. car exports would probably be subject to new or higher tariffs overseas.

And in fact , despite Canada’s tariff , the U.S. runs a surplus in dairy trade with its northern neighbor. A look at Trump ’s complaints and the complicated Canada allows a small amount of dairy and poultry imports into the country duty-free or at very low tariffs . Anything above the cutoff is hammered

A look at the president's tweet and how it compares with the facts:

TRUMP: "I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN."

THE FACTS: Trump seems to be claiming that tariffs are some kind of a membership fee for foreign companies to trade in the U.S. economy.

They're not. Tariffs are a tax, per Article I, Section 8 of the Constitution.

The costs of this tax are borne by U.S. consumers and businesses, often in the form of higher prices. Foreign companies may end up selling fewer goods and services if the United States imposes high tariffs. So they pay a price, too.

In some cases, the tariffs exist to protect industries that are vital for national security. Or, the tariffs exist to retaliate against the trade practices of other countries. Or, they might protect politically connected companies.

In the past, White House aides have insisted that Trump's tariff hikes are a negotiating ploy. Yet the president offered no such qualifications on Tuesday.

Tariffs are not seen as some easy way of generating massive wealth for an economically developed nation. Nor do the budget numbers suggest they can come anywhere close to covering the costs of the federal government.

Trump is correct that tariffs did generate $41.3 billion in tax revenues last fiscal year, according to the Treasury Department. But that is a pittance in a federal budget that exceeds $4.1 trillion.

The taxes collected on imports were equal to about 1 percent of all federal spending.

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