permafrost Loc: Minnesota

Not only is trump lousy at business, he is forcing his foolishness onto the United States and costing all of the taxpayers in the nation hard money..

as he pays no income tax, he does not care..


Curtis y of the Fiscal Times... 5819

The True Cost of Trump's Tariffs
Stocks suffered their worst drop in months Tuesday as investors contemplated President Trump’s latest threats in his burgeoning trade war with China. Amid news that trade talks weren’t going well, the president threatened on Sunday to raise tariffs to 25% on $200 billion of Chinese goods, up from the current 10%. He also said he might impose an extra 25% tariff on another $325 billion of Chinese goods “shortly.”

Trump has repeatedly cited the tariffs as a contributing factor to the relatively strong economic growth seen in recent months, but most economists agree that tariffs function as taxes on American consumers and manufacturers. An importer pays a tariff on goods coming from overseas and has several options for what to do about that increased cost. According a Reuters analysis Monday, a U.S. importer can:

1. Pay the full cost of the tariff, and see profits shrink.
2. Reduce other costs to make up for the higher import cost.
3. Seek a discount from the supplier.
4. Change suppliers to avoid the tariff.
5. Raise prices to make up for the higher cost.

While importers may use some combination of those options, much of the cost ends up being passed on onto companies and consumers. A recent study by the Peterson Institute for International Economics found that Trump’s steel and aluminum tariffs added 9% to the price of steel products sold in the U.S. last year, for a total of $5.6 billion in extra costs.

Overall, the tariffs have added about $11.5 billion in costs to the U.S. economy on annual basis – and Trump is threatening to raise that number.

“[Trump’s] assertion generally that the Chinese are paying these tariffs is just simply nonsense. It’s a complete misunderstanding of how tariffs work, because tariffs are paid by the importing company and those companies are overwhelmingly American,” said Jacob Kirkegaard of the Peterson Institute. “Ultimately, that means this is a tax paid by the American consumers. The idea that it’s somehow something the Chinese pay is wrong.”

As far as government revenues are concerned, Trump’s tariffs aren’t moving the needle. “In theory, the government should be earning $32.5 billion a year on top of what they were already earning. That hasn’t happened,” Kirkegaard said. “If you look at tariff revenue in 2018, it was only about $50 billion, whereas in 2017, it was about $35 billion. It hasn’t gone up by as much as you’d think.” And even if tariff revenues were to increase further, they would be a drop in the bucket relative to the more than $3 trillion the Treasury takes in annually.

Although the tariffs aren’t doing what Trump claims they are, they nevertheless are having a real effect, as Tuesday’s market performance indicates. In a note to clients, Deutsche Bank's Torsten Slok pointed out just how unusual Trump’s approach to tariffs is: "If the US follows through on the latest trade war threats it will raise the overall US tariff level to 7.5%, which is higher than in many emerging markets" and well above the levels seen in other industrialized nations, the economist said.

son of witless

So you are okay with China stealing jobs and trade secrets from America ?

Mikeyavelli

When the stock market goes up, it's because of The Great Obama's economic policies. As soon as the market goes down, it's Trump's fault.
All Bullnadler.