Tariff Man

Donald Trump - who has called himself the Tariff Man - has often repeated that China pays for U.S. tariffs on its goods.   We have billions of dollars coming into our Treasury — billions — from China.  We never had 10 cents coming into our Treasury; now we have billions coming in. 



Gary Varvel - Indianapolis Star

Yup, that’s right – President Trump claims that China pays these tariffs.   Of course, the president is lying.  Lying again.  What else is new? 

The truth is that is not how tariffs work.  Tariffs are a tax on imports.  They are paid by US-registered firms to US customs for the goods they import into the United States.   Importers pass the costs of tariffs on to customers - manufacturers and consumers in the United States - by raising their prices.   From time-to-time manufacturers may ‘eat’ these taxes with the net result of little or no profitability.  Losses and bankruptcies (see agriculture) may also be the result. 

An extra 5% tariff on $300 billion in Chinese imports along with collection dates of September 1 and December 15 begins tomorrow.  This has prompted hundreds of US retail, footwear, toy and technology companies to warn of price hikes. 

Of course, the president’s supporters do not believe any of this this.  There is a diagnosis for this condition. 

I’m not taking wagers to see who blinks first. 

Sigh….