Daily Management Review

Following New Tariffs, Trump Defends His Tariff Policy


08/04/2019




Following New Tariffs, Trump Defends His Tariff Policy
‘Things are going well with China’, said the United States President Donald Trump on Saturday referring to his most recent announcement of imposition of fresh import tariffs of 10 per cent on Chinese goods worth $300 billion. Trump insisted that the additional import tax on products imported from China will not be paid by the US consumers. Economists however say that the additional cost on the Chinese products imported into the US because of the 10 per cent import tariffs is being borne by the American consumers.
 
"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!" Trump said on Twitter.
 
He further said that countries are asking to negotiate "REAL trade deals". He however provided no evidence on of this statement. He also said on Twitter that "they (the countries approaching the US for trade deals) don't want to be targeted for Tariffs by the U.S."
 
The most recent announcement by Trump of 10 per cent tariffs just a couple of days ago had stunned the global financial markets and brought an abrupt end to the trade war truce between the two largest economies of the world that had been in force for about a month.
 
China has sternly opposed the proposed new tariff of Trump and has pledged to fight them back. 
 
Typically excessive tax on imported products into a country is imposed by the importing country to give a boost to domestic businesses by making the imported products more expensive for consumer in the importing country because of the tariffs. This ultimate increase in the price of foreign products in a domestic market can however be negated if the foreign exporters decide to reduce the prices or account for the costs of the additional tariffs. However in the case of the trade war between the United States and China, there is yet no evidence that Chinese exporters are bringing down prices to cushion the impact of the Trump tariffs on the prices of exported products for American consumers.
 
All of the cost of tariffs imposed in 2018 was passed on to US consumers, found a study published by the National Bureau of Economic research in March.
 
(Source:www.voanews.com)






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