The president’s double-talk about tariffs reflects his economically ignorant conviction that exports are good and imports are bad.
Larry Kudlow, Donald Trump's chief economic adviser, understands that tariffs on Chinese imports are a tax paid by American companies and consumers—a point his boss refuses to acknowledge. The president's weird insistence that "China" pays the tariffs reflects not just his reluctance to take responsibility for tax increases but his longstanding, sincere, and fundamentally mistaken views on international trade—views that do not bode well for the outcome of his trade war.
"Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products," Trump tweeted on Friday. As Kudlow conceded in a Fox News interview on Sunday, that is not how tariffs work. U.S. importers pay the tariffs, and they respond by reducing their profit margins, raising prices, or both.
During 2018, a recent study of Trump's tariffs by economists at Princeton, Columbia, and the Federal Reserve Bank of New York noted, "the U.S. experienced substantial increases in the prices of intermediates and final goods, dramatic changes to its supply-chain network, reductions in availability of imported varieties, and complete passthrough of the tariffs into domestic prices of imported goods." By the end of the year, they estimated, the tariffs were costing Americans $3 billion a month in added taxes and another $1.4 billion a month in lost efficiency.
That was before Trump raised the rate on $200 billion in Chinese products from 10 percent to 25 percent. The administration plans to extend the 25 percent tariff to another $300 billion in goods, which would cover nearly everything Americans import from China, including computers and cellphones.
Kudlow argues that the price is worth paying if the tariffs pressure China to address American complaints about subsidies, restrictions on access to the Chinese market, intellectual property theft, and mandated transfers of technology and ownership stakes. Trump, by contrast, refuses to admit Americans are paying any price at all.
The president does acknowledge that China's retaliatory tariffs have hurt American farmers, and he promises to help them, using revenue generated by his own tariffs, which amounts to a transfer from one set of victims to another. His stance is not just a form of blame shifting but a logical corollary of his economically ignorant conviction that exports are good and imports are bad.
"You only have to look at our trade deficit to see that we are being taken to the cleaners by our trading partners," Trump wrote two decades ago in The America We Deserve, arguing that peaceful economic exchange is "like war." This mercantilist notion—that something shady must be happening unless the Unites States exports at least as much to a particular country as it imports from that country—continues to dominate his thinking about international trade.
"If we didn't trade," the president averred last year, "we'd save a hell of a lot of money." But that does not mean we'd be better off, since we would not have all the things we buy with our money, which we clearly value more than the money itself, since no one forces us to exchange one for the other. The analysis is the same whether or not the people who sell us things happen to be located in the United States.
As Rep. Justin Amash (R-Mich.) pointed out at the time and again when Trump claimed last week that money is "lost" when it's spent on Chinese products, "A trade deficit is not a loss of money. If you buy from a supermarket or go to a movie, you have a trade deficit, but you have not lost money; you get stuff (groceries, entertainment, etc.) in exchange for your dollars."
Whatever you think of Trump's tariffs as a negotiating tactic, you should be troubled by the fact that the resolution of this trade war is in the hands of a man who thinks Americans would be better off if they spent nothing on imported goods they demonstrably want.
#1: misterwhite To: Deckard (#0)
I'm troubled by the fact that the author is content to be fucked in the ass by the Chinese for the last 20 years. Maybe he's getting used to it.
misterwhite posted on 2019-05-15 10:53:19 Reply Private Reply
#2: jeremiad To: misterwhite (#1)
jeremiad posted on 2019-05-15 14:55:15 Reply Private Reply
#3: misterwhite To: jeremiad (#2)
I thought I heard on the radio the other day that China is reducing their prices to compensate for the tariffs.
Either way they lose money.
misterwhite posted on 2019-05-15 18:21:10 Reply Private Reply
#4: jeremiad To: misterwhite (#3)
It doesn't matter what I think, America will continue shoveling boatloads of money to them, while they steal and plot to destroy us with their ill gotten goods. American politicians are the best China lobbyists money could buy.
jeremiad posted on 2019-05-15 19:04:52 Reply Private Reply
#5: BorisY To: Deckard (#0)
whaT a way To do business
BorisY posted on 2019-05-15 21:28:59 Reply Private Reply
#6: Dead Culture Watch To: Deckard (#0)
1; the lowest tariffs on the planet are America’s.
2; what Trump wants is fair trade with countries that value our intellectual property.
The complete garbage that are the Chinese and the pile of shit government they have don’t deserve to sell even a single chopstick in this country. The fact they do, tells me traitors have been running this country for decades.
Loral, M-88 warhead, US Steel, the list is insane of all they’ve stolen from us. The entire country can die in cataclysm and I would shrug.
Dead Culture Watch posted on 2019-05-15 23:07:51 Reply Private Reply
#7: misterwhite To: jeremiad (#4)
Well, imports from China are only part of it. They're blocking our exports to them, they force our companies located in China to disclose their technology, and they violate our patents, trademarks and copyrights.
misterwhite posted on 2019-05-16 09:37:49 Reply Private Reply
#8: Liberator To: Deckard (#0)
"A trade deficit [from gay Hookers] is not a loss of money. If you buy [sex] from a [Gay Bath House]... you have not lost money; you get stuff (perverted pleasure, STDs, AIDS) in exchange for your dollars."
THERE. FIXED.
Dopey articles and premises like this -- written by cokehead-Commie-Globalists -- should be written off as cartoons.
Liberator posted on 2019-05-16 10:13:06 Reply Private Reply
#9: Liberator To: Dead Culture Watch (#6)
EXACTLY, DCW. (This artcle was pure propaganda and disinfo.)
Yes, the ChiComs are Thieves. But yes, we have also been purposely sold out by Poppy Bush, Bubba and the rest of the One World Globalists. It's no coincidence that since giving the ChiComs trade access to America, we've nosedived.
The Elites' Plan has been simple: Sell/Give the ChiComs our blood sweat and tears (and wealth) WHILE destroying American sovereignty, economic freedom and our future.
Liberator posted on 2019-05-16 10:19:39 Reply Private Reply
#10: Liberator To: misterwhite (#7)
China's not "forcing" the US to do anything; The US Shadow Globalist-Gummint GAVE the Chicoms the Master Key to the US Treasury. The Elites knew exactly how the funneling of US wealth to Slave-Labor China would eventually manifest itself:
The reason was three-fold:
1) Transfer of wealth and military power
2) Destroy US Sovereignty
3) Profiteering
Liberator posted on 2019-05-16 10:26:02 Reply Private Reply
#11: Deckard To: Liberator (#8)
America Will Lose The Trade War Because That Is What Globalists Want To Happen
Deckard posted on 2019-05-16 11:26:49 Reply Private Reply
#12: Liberator To: Deckard (#11)
Yes, but the author of the original article is a tool *of* those globalists by invoking Trump's supposed "double-talk.". In no way, shape or form is it the fault of President Donald Trump that the US has been running a $300 BILLION yearly deficit.
Trump for HIS part is *bucking* the usual NWO script and trying to stop the hemorrhaging. He's merely trying to save the US economy and standard of living instead of past US Presidents' policy of bleeding us out.
The die was cast and our Economic End Game indeed scripted, pre-destined and gamed by the Globalist-Elites THE day Bush and the Luciferian Traitors sacrificed US tech & industry to China's Slave Labor behemoth.
And btw, the author's mention of Justin Amash?? Gimme a break. It just reinforced the author's agenda. Amash is a pro-Illegal merc and globalist hack.
Liberator posted on 2019-05-16 13:20:27 Reply Private Reply