Trump's tariffs yield truth deficit, hurt N.C.
Saturday, May 25, 2019
Want to understand how the tariffs on China work? Don’t take President Donald Trump’s word for it.
Here’s what he’s had to say. We’ll follow with why he’s wrong, who really pays and who really suffers (hint, it’s not China or Trump).
First, from Trump’s tweets:
"For 10 months, China has been paying Tariffs to the USA of 25 percent on 50 Billion Dollars of High Tech, and 10 percent on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10 percent will go up to 25 percent on Friday.” — May 5, 2019, 12:08 p.m.
“I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers ... great for U.S., not good for China!” — May 8, 2019, 8:48 a.m.
“Talks with China continue in a very congenial manner — there is absolutely no need to rush — as Tariffs are NOW being paid to the United States by China of 25 percent on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S. ...” — May 10, 2019, 7:43 a.m.
“Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind.” — May 10, 2019
The president is wrong. He can’t bring himself to tell the truth. He demeans himself, his party and the nation.
China does not pay a penny in tariffs. Tariffs are paid by companies in the United States that import goods and products FROM China. Those importers pass those costs, in the form of higher prices for goods and products, to the American businesses and consumers that buy them.
Even the president’s own chief economic adviser, Larry Kudlow, says his boss is wrong. “It’s not China that pays tariffs. It’s the American importers, the American companies that pay what, in effect, is a tax increase and oftentimes passes it on to U.S. consumers,” Chris Wallace of Fox news said to Kudlow. “Fair enough,” Kudlow replied.
Who’s hurt by tariffs? North Carolina farmers, investors, retailers and consumers.
Over a six-month period ending in March, exports from the United States to China dropped by $18.4 billion, or 26 percent, compared to a year earlier. Total North Carolina exports to China, the state’s third largest trade partner, had increased from $2.189 billion in 2016 to $2.362 billion in 2017. It DROPPED last year amid an earlier round of Trump’s tariffs to $2.339 billion.
N.C. Farm Bureau leader Larry Wooten said escalating tariffs is not sustainable. “A lot of our farmers may not make it to the long-term gain because the short-term pain is so bad,” he said in a recent interview. The state’s tobacco farmers have been suffering from retaliatory Chinese tariffs imposed last year. In 2017, the state exported $162 million in tobacco to China, a figure that fell to $4 million last year — a 98 percent decline.
Investors, from major players like pension funds to individuals concerned about retirement accounts, it’s been a downward move since the tariffs were announced – with the Dow Industrial average dropping 800 points from 26,505 on May 3, the day before Trump’s announcement.
N.C. State economist Mike Walden is advising consumers to “buy now” to avoid increased prices on everything from cell phones, appliances and clothing. Tariff-related price increases will cost families about $700 over the next year.
North Carolina’s economy is paying a high price for his impetuous trade war and even stalwarts like the state Farm Bureau don’t believe Trump’s phony short-term pain for long-term gain justifications.
Donald Trump’s spread of disinformation isn’t some benign political exercise. His lies have real-life consequences.
Our members of congress need to demand truth be the foundation of our nation’s policies. Voters should deliver a dose of reality in 2020 to those who don’t.
Capitol Broadcasting Company of Raleigh