Cogito Ergo Non Serviam
Trump Delays Chinese Tariffs Till After Christmas
Donald Trump loves tariffs, which is surprising because he has absolutely no idea how they work. He falsely claims that the tariffs he has levied on Chinese products have been paid by China. That is not how tariffs work. They are paid by the importer, or if the importer is lucky, by the importers' customers. The exporter has nothing to do with it. Yet, even Mr. Trump is worried about the impact his tariffs will have on consumers. So, he said yesterday he would hold off on some of the next batch of tariffs to ensure consumers don't suffer as they shop for Christmas.
Yesterday, he said that the tariffs would not kick in next month as planned. Instead, the new date is December 15, ten days before Christmas but close enough to it for the tariffs not to reach consumers' pocket books until after the gift-getting season ends.
"We are doing this for the Christmas season, just in case some of the tariffs would have an impact on U.S. Consumers [which they do]. So far they've had virtually none [which is untrue]. The only impact has been that we've collected almost $60 billion from China, compliments of China [also untrue]. But just in case they might have an impact on people [they do], what we've done is we've delayed it so they won't be relevant for the Christmas shopping season," Mr. Trump told reporters before he flew to western Pennsylvania.
The fact of the matter is that the tariffs have already harmed consumers. Goldman Sachs Chief Economist Jan Hatzius, in a note to clients Saturday, stated, "First, the costs of US tariffs have fallen entirely on US businesses and households, with no clear reduction in the prices charged by Chinese exporters. Second, the effects of the tariffs have spilled over noticeably to the prices charged by US producers competing with tariff-affected goods." While one doesn't like the vampire squid that is Goldman-Sachs, one does respect its analyses of economic activity.
Nor is Goldman the only entity that sees trouble for the consumer. The Washington Post reported, "Trump's latest import tax would cost a typical family of four $350 a year in addition to $850 from existing China tariffs, according to the Tax Foundation." The median household income for last year in the US was about $60,000. Tariffs on Chinese goods are costing the median household 2% of its annual income. That more than makes up for what that family got in the Trump Tax Cut.
The move to delay is clearly an admission that everything he has said about tariffs in the last 40 years is rubbish. Mr. Trump's negotiating style is always to create a crisis, hope the other side blinks, and when they don't, he climbs down. The Chinese are hurting economically, but that is a function of domestic issues, and the idiocy of clamping down on Hong Kong. They believe that they can wait out Mr. Trump, who faces an election in less than 15 months. If he loses, their problem goes away. For a culture that goes back a few millennia, 15 months is hardly noticeable.
© Copyright 2019 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.
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