Donald Trump thinks the tariffs he has put on goods made in China are paid by China, the country:
President Trump is vowing that his latest round of tariffs will help win a trade war, adding that China is “now paying us billions of dollars in tariffs.”
But, as so often happens, Donald Trump has no idea what he is talking about. China isn’t paying the tariffs. American companies are:
China isn’t paying the tariffs, however — the duties are paid by importers like Ford or Walmart that either swallow the cost or pass it along to consumers. In other words, it’s often U.S. consumers who are footing the bill for tariffs.
How much are American companies paying in tariffs? A lot. To the tune of several billion dollars a month:
The cost of President Donald Trump’s trade war is starting to pile up.
Trump has cheered billions “pouring into the coffers of the USA,” but new data shows companies’ costs starting to reach new records:
- In October, US companies paid $6.2 billion in tariffs, up from $4.4 billion in September and just $3.1 billion in October 2017.
- That’s a 104% year-over-year increase, despite just a 13% jump in the value of imports, according to data compiled by Tariffs Hurt the Heartland, a pro-free trade group, and research firm The Trade Partnership.
The total payments in October is the largest monthly tariff collection amount in history, according to the groups.
Now, the fact that American companies like Walmart and Ford are paying tariffs that end up going to the United States government isn’t entirely a bad thing. These companies also received a giant tax break from the GOP tax cut that was passed a year ago, so these tariffs are making up for that irresponsible loss of revenue a little bit.
However, the problem created by Donald Trump’s idiocy is that the tariffs aren’t doing what he thinks they are doing: taking money directly from the Chinese government. The reason this is a problem is that Donald Trump likely believes these tariffs are putting far more pressure on the Chinese government than they actually are. Because the Chinese government isn’t paying the tariffs, American companies are.
Meanwhile, the trade war continues to damage the American agricultural sector and automobile industry. China has stopped buying soybeans from American exporters, possibly destroying the American soybean industry for good. And steel and aluminum prices have risen to such an extent that they are seriously cutting into the profitably of American auto manufacturers, causing layoffs and plant closings.
Trump thinks the pain that is being caused by his trade war will be worth it, because China will be pressured into making a great deal due to the fact that China is paying tariffs that China is not actually paying. In fact, when China does make a deal, the odds are pretty good that the terms will be nearly identical to the terms that could have been made with China if Trump had just kept the United States in the Trans-Pacific Partnership (TPP) that had been negotiated by the Obama administration. This is exactly what happened when Canada and Mexico made a deal with Trump: the terms were almost identical to what had been already negotiated by Obama as part of the TPP. Which means the pain Trump has been causing for American farmers and manufacturers will have all been for basically nothing.
Maybe it was a bad idea to elect a reality TV star to be President.