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Stop Making Fun Of Trump For Not Knowing How Tariffs Work
He knows. They’re a tax on American consumers, not China. It’s just a better story if he says it the opposite way, so he does:
Update: China’s trade negotiators say they’re still heading to the U.S. for talks this week, leading many Wall Street analysts to instantly believe Trump’s threat of higher tariffs Friday is just a ploy to speed up the conclusion of negotiations. Wall Street believes in Trump so easily! Although they also could be right.
But tariffs are not paid by exporters of goods (Chinese companies), but importers of goods (U.S. companies), which typically pass the cost on to consumers.
At some point, presumably U.S. consumers should start buying less, or putting off purchases of items that have suddenly gone up in price. University of Chicago economists along with a Federal Reserve Board member illustrated this recently in a paper they published about how tariffs have…
