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Trump inadvertently admits in a Tweet that his trade war is an abject failure – Publications – AEI

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AEI Trump inadvertently admits in a Tweet that his trade war is an abject failure Here’s the opening of an article in today’s Wall Street Journal titled “Trump Ordered New Chinese Tariffs Over Objections of Advisers“: President Trump overruled advisers to ramp up tariffs on China after a heated exchange in which he insisted levies were the best way to make Beijing comply with U.S. demands, according to people familiar with the matter. Barring a break in the impasse, the U.S. is now poised to impose 10% tariffs on roughly 0 billion in Chinese imports that aren’t currently taxed starting Sept. 1. Battle lines are hardening in Beijing as well—raising prospects that a deal may be put off until after the U.S. presidential election next year. Mr. Trump, who has speculated the Chinese may be

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Trump inadvertently admits in a Tweet that his trade war is an abject failure

Trump inadvertently admits in a Tweet that his trade war is an abject failure - Publications – AEI

Here’s the opening of an article in today’s Wall Street Journal titled “Trump Ordered New Chinese Tariffs Over Objections of Advisers“:

President Trump overruled advisers to ramp up tariffs on China after a heated exchange in which he insisted levies were the best way to make Beijing comply with U.S. demands, according to people familiar with the matter.

Barring a break in the impasse, the U.S. is now poised to impose 10% tariffs on roughly $300 billion in Chinese imports that aren’t currently taxed starting Sept. 1. Battle lines are hardening in Beijing as well—raising prospects that a deal may be put off until after the U.S. presidential election next year.

Mr. Trump, who has speculated the Chinese may be waiting to negotiate with a possible Democratic successor, says a strong U.S. economy gives Washington the upper hand if the dispute drags on. But advisers argued that a new round of tariffs could hurt the U.S. economy and further strain relations with China.

At the end of the article, this tweet from Trump is quoted:

Things are going along very well with China. They are paying us Tens of Billions of Dollars, made possible by their monetary devaluations and pumping in massive amounts of cash to keep their system going. So far our consumer is paying nothing – and no inflation. No help from Fed!

First of all, China is not paying us “tens of billions of dollars”…. Trump’s tariffs taxes are paid by American businesses who import Chinese goods. Second, the whole point of Trump’s tariffs on Chinese imports is to raise the prices of those goods to give American producers who compete with China an artificial cost advantage, i.e., protect them foreign competition. For Tariff Man to admit that consumers are paying nothing is to admit that his trade war is failing miserably!

Here’s how Don Boudreaux explained it today on Cafe Hayek in a letter to the Wall Street Journal:

At the end of your report today about Pres. Trump’s tariffs on imports from China (“Trump Ordered New Chinese Tariffs Over Objections of Advisers”) is notice of a stunningly out-of-character confession by the president of abject failure: “So far our consumer is paying nothing.” Never mind that Pres. Trump is factually mistaken. If he were correct – as he obviously thinks he is – his tariffs would be failing to protect a single American firm and worker from Chinese imports.

If despite Pres. Trump’s tariffs the American consumer is indeed “paying nothing,” the American consumer has encountered neither the slightest rise in the prices of Chinese goods nor the slightest reduction in the availability and quality of these goods. Thus, the president’s tariffs have failed to prompt this consumer to increase by even a smidgen his or her purchases of American-made goods.

Because a major purpose of Pres. Trump’s tariffs is to increase the sales of American firms that compete with Chinese imports, we should applaud Pres. Trump for this all-too-rare admission that one of his signature policies is a complete flop.

MP: See Venn diagram version above, inspired by Don’s artful and skilled response to Tariff Man’s Tweet.

 

 

Trump inadvertently admits in a Tweet that his trade war is an abject failure
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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