We’ve seen how farmers are suffering under President Trump’s tariffs, and that while Trump subsidized farmers with your tax money to make up for it for one year, he declined to continue that program.
It’s all worth it, though, Trump claims because we’re getting so much money from the tariffs.
“For ten months, China has been paying Tariffs to the USA,†Trump tweeted on Sunday. But of course, that is not accurate.
Trump’s tariffs are not paid by the Chinese government or companies located in China; they are usually paid by U.S. companies, or U.S. registered units of foreign companies, who then pass that cost on to consumers and pay less in wages.
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But it gets worse.
“Yes, Trump Tariffs Are Costing Billions. No, China Isn’t Paying,” Bloomberg reported Wednesday as Trump escalates his trade war with China.
A study, co-authored by the World Bank’s chief economist and flagged today by Mark Niquette in Bloomberg, found that the main victims of Trump’s trade wars were farmers and blue-collar workers in areas that supported Trump in 2016.
“(I)t concluded the main victims of Trump’s trade wars had been farmers and blue-collar workers in areas that supported Trump in the 2016 election.”
“Workers in very Republican counties bore the brunt of the costs of the trade war, in part because retaliations disproportionately targeted agricultural sectors.”
This might explain why farmers are getting fed up with Trump’s trade war and Republicans are warning the administration to fix this.
Senator Joni Ernst (R-IA) told The Washington Post, “If he gets a deal, awesome. If he doesn’t, it’s going to hurt,†adding that farmers are “losing their patience, yeah, but they want to see a deal.â€
Senate Majority Whip John Thune (R-SD) told the Post that Republicans tried to warn the administration off of their trade war because of the political cost, “I just think he believes that farmers are going to be with him because they think he’s doing the right thing. And by and large, that’s true. But when you start losing the farm, that calculation starts to change a little bit.â€
While the White House has vaguely said they would take care of farmers again, Perdue said there is no such plan in place.
“We have been very clear to the agriculture community that we did not anticipate nor should they anticipate a 2019 Market Facilitation Program,” Secretary of Agriculture Sonny Perdue told reporters, referring to nearly $12 billion in aid paid to farmers to make up for Trump’s trade war losses.
How do companies deal with the tariffs? They cut costs, including wages and jobs for U.S. workers and pass the costs on to consumers.
The U.S. based importers hit by Trump’s China tariffs deal with their higher tax burden in ways that hurt U.S. customers and companies more than they hurt China; but one example is Deere & Co charging more for its tractors.
In February, a Congressional Research Service report found that the tariffs led to increases in washing machine prices of as much as 12% over January of 2018, which is before the tariffs took effect.
“U.S. companies and consumers paid $3 billion a month in additional taxes because of tariffs on Chinese goods and on aluminum and steel from around the globe, according to a study by the Federal Reserve Bank of New York, Princeton University, and Columbia University,” Reuters pointed out in a tariffs explainer Wednesday, which also pointed out that the tariff revenue is *not* compensating for the losses born by the consumers of imports.
This is another way of saying we are all subsidizing Trump’s trade war. But the man who lost more money than any other U.S. taxpayer for ten years doesn’t seem to grasp how tough it is for middle and working class families to pay the bills, so getting stuck with an increase of 12% for a washing machine is nothing to him. He certainly wouldn’t pay for the machine at all, given his record. He’d “buy” it, and then get Chris Christie to forgive the debt, like Christie did for Trump’s almost $30 million tax debt in New Jersey.
Meanwhile, Trump’s proposed 2020 budget called for a trillion dollars in cuts to Medicare, Medicaid, and Social Security, after passing $1.5 trillion in tax cuts which mostly help the wealthy and corporations.
Where is all of this going? Maybe it could be forgivable if it were to benefit American consumers and companies.
However, China backed out of almost all of the resolutions to address the very issues Trump cited when launching his trade war: “theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.”
This is, like everything else Trump has touched, very costly and going nowhere good.
(Additional reporting by Reuters)
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