No, Mr. President, China isn’t paying your tariffs. We are
Yesterday President* Trump announced a delay in the next round of tariffs on Chinese products entering the U.S. Trump says that he is delaying the tariffs, which were set to start Sept. 1, until mid December with the intention to not have them disrupt the Christmas shopping season.
Trump went on to say that tariffs on China so far have cost the U.S. consumer virtually nothing and that China has paid the United States 60 billion dollars in tariffs.
Why does the American media continue to let Trump lie about tariffs?
President Trump keeps insisting that China, not U.S. consumers, are paying for his tariffs on Chinese goods. He is, to put it politely, wrong.
Tariffs Hurt the Heartland, a coalition of business and trade groups, issued a report last week saying American consumers and businesses paid $6 billion in tariffs in June, up 74% from the same month a year ago. More than half that total came from Trump’s tariffs.
The trade coalition called June “one of the highest tariffed months in U.S. history.”
To hear Trump tell it, this is great news. “It is now even more obvious to everyone that Americans are not paying for the Tariffs — they are being paid for compliments of China, and the U.S. is taking in tens of Billions of Dollars!” he tweeted .
That’s just not true. The New York Federal Reserve estimates that tariffs already imposed by the administration are costing about $830 per U.S. household. The next round of tariffs, scheduled to begin next month, could add roughly $200 per household to that annual cost.
For those who don’t know (including, it seems, the president of the United States), tariffs aren’t penalty fines. They’re taxes, paid to U.S. Customs and Border Protection by companies that import goods from abroad. Such companies — manufacturers, retailers, electronics firms — typically pass along their higher costs to customers in the form of higher prices.
Customs duties collected in the fiscal year that started last October have now hit $50 billion, up from $28.3 billion for the same 10 months in 2018, according to the U.S. Treasury. This puts us on track for about $72 billion in tariff revenue for the year.
“We have billions of dollars coming into our Treasury — billions — from China,” Trump crowed in January. “We never had 10 cents coming into our Treasury; now we have billions coming in.”
Again, those billions are not from China. They’re from you.
If there’s some trade leverage to be had, it’s from American consumers possibly buying fewer Chinese-made goods because the products are becoming more expensive. That could place economic pressure on Chinese authorities.
However, because nearly everything is made in China these days, it can be difficult to find a domestically produced alternative. So the reality is that U.S. consumers, more often than not, will simply adjust to higher prices — which means having less money to spend elsewhere.
“Taxing hardworking Americans isn’t doing a thing to address China’s trade abuses,” said Tariffs Hurt the Heartland spokesman Jonathan Gold. “Instead, these tariffs are costing American jobs, raising prices, hurting farmers and derailing U.S. economic growth.”