Monday, May 6, 2019

President Trump's Tariffs Will Hurt America More Than China

Let’s stop pretending. An import tariff is nothing but a tax on consumers and businesses. Not in the exporting country, but the importing one. So the 10% tariff on $200bn of Chinese imports that President Trump has just imposed is in reality a new tax on Americans. And it will hurt America much more than China.

Stocks tumble as Trump threatens to raise Chinese import tariffs


US stocks opened sharply lower on Monday after Donald Trump threatened to raise tariffs on all Chinese imports to 25 per cent, sharply ratcheting up pressure on Beijing to make concessions in trade talks and sending global equities markets sliding.  The US president made the threat in a number of tweets on Sunday and Monday just a few days ahead of a make-or-break round of trade negotiations scheduled to begin on Wednesday.

In renewing a threat to sharply raise tariffs this week on hundreds of billions of dollars worth of goods from China, President Trump said in a tweet on Sunday that the levies have had little impact on U.S. consumers -- it is the Chinese who are bearing the brunt of the trade war between the world's two biggest economies, he claimed.
Yet research suggests otherwise, showing that American consumers and businesses are taking the biggest hit in the form of higher prices and costs. That's especially true in areas of the country that typically vote for Republican candidates, like farming communities in the Midwest, according to one recent study by economists from UCLA, University of California, Berkeley, Columbia University and the World Bank.

Trade wars are good, and easy to win. So President Donald Trump said last year as he embarked on his first round of tariffs on foreign imports.
It seems that things have proven so good and easy that he’s readying for another bout. Trump is prepared to increase a 10 percent levy on $200 billion of imports from China to 25 percent on Friday, he tweeted on Sunday — instantly popping any hopes that trade talks were on their final approach toward an amicable resolution.
The president had a justification for casually slapping a $30 billion trade impost via tweet — the Chinese will pay anyway:

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