Faced with the critique that his China tariffs have raised prices in the US and are being paid by US importers, and ultimately consumers, Trump has responded by saying that that is not true.
Trump says there has been no increase in prices because China has made up for the rise that would result from the tariffs by ramping up export subsidies and devaluing its currency:
China is subsidizing its product in order that it can continue to be sold in the USA. Many firms are leaving China for other countries, including the United States, in order to avoid paying the Tariffs. No visible increase in costs or inflation, but U.S. is taking Billions!
— Donald J. Trump (@realDonaldTrump) June 3, 2019
Washington Post got it wrong, as usual. The U.S. is charging 25% against 250 Billion Dollars of goods shipped from China, not 200 BD. Also, China is paying a heavy cost in that they will subsidize goods to keep them coming, devalue their currency, yet companies are moving to…..
— Donald J. Trump (@realDonaldTrump) June 1, 2019
Trump says the US consumer still pays the same cheap prices, while the US Treasury rakes in billions in tariffs — and it is all paid for by the Chinese. Beijing’s subsidies and artificially weak yuan are now being hailed as a fantastic subsidy of the US by the Chinese which indeed they are.
However, since that is the case…then why has Trump spent years demonizing the Chinese for tightening their belts to subsidy American consumption, and launched a trade war to get them to stop?
Perhaps a thank you note should have been more appropriate?
It is not China’s fault the US does not save and hamstrings industries with regulation.
China (motivated by the same 18th century mercantile delusions that fuel Trump) merely made it possible for the much richer Americans could keep consuming as if they still had great manufacturing.
For that it has been repaid with demonization and an economic war. A war which it can not lose except by self-inflicted wounds. Ie if it tightens its belt even more so that it can keep carrying the US which repays it with scorn for a while longer.