Trump defends tariffs after Kudlow admits U.S. companies bear cost | News Coverage from USA

Trump defends tariffs after Kudlow admits U.S. companies bear cost

WASHINGTON – President Donald Trump continued to insist Monday that China, not U.S. consumers, will bear the cost of the tariffs he is imposing on Chinese goods, as China announced new tarrifs on U.S. imports. 

“There is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today,” Trump said in a tweet. “Also, the Tariffs can be completely avoided if you by from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs.” 

But on Sunday, top White House economic adviser Larry Kudlow acknowledged that tariffs on goods from China are effectively a tax on U.S. companies that is passed onto American consumers, contradicting Trump’s repeated insistence that the costs would be borne by China. 

“Fox News Sunday” host Chris Wallace played a clip in which Trump said that the U.S. “can take in $120 billion a year in tariffs, paid for mostly by China, by the way, not by us. A lot of people try to steer it in a different direction. It’s really paid – ultimately, it’s paid for by – largely by China.” 

Markets: Dow, stock futures fell after fears of trade retaliation from China

“But, Larry, that isn’t true,” Wallace told Kudlow. “It’s not China that pays tariffs. It’s the American importers, the American companies that pay what, in effect, is a tax increase and often times passes it on to U.S. consumers.  

“Fair enough,” Kudlow said. “In fact, both sides will pay. Both sides will pay in these things.” 

On Friday, the U.S. raised tariffs on $200 billion in Chinese goods to 25% from 10% after trade talks between the two countries stalled. Trump said in a tweet Sunday that China “broke the deal” and “tried to renegotiate.” 

“You had a great deal, almost completed, & you backed out!” Trump said on Twitter, in an open message to Chinese President Xi Jinping and “all of my many friends in China.” 

Trump warned that “China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China.” 

He said the tariffs would drive companies away until there is “nobody left in China to do with business with.” And he warned Jinping not retaliate with tariffs on U.S. goods or it “will only get worse.” 

Most economists do not agree with Trump’s view that tariffs amount to a transfer of wealth from China to the U.S. On Sunday, Kudlow admitted that China does not pay for the tariffs directly, but said, “the Chinese will suffer GDP losses and so forth.” 

China “may suffer the consequences, but it’s U.S. businesses and U.S. consumers who pay, correct?” Wallace asked. 

“Yes, to some extent,” Kudlow replied. “Yes, I don’t disagree with that.”

“Again, both sides will suffer on this.” 

 

 

 

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