He claimed the “payments” have led to the improvement in the U.S. economy.
In fact, American consumers absorb the cost of tariffs on imported Chinese goods by paying higher prices for the products. The added costs are essentially a regressive tax on consumers because they’re not linked to income levels.
Trump tweeted his intention to hike tariffs to 25% on Friday and threatened to add tariffs to more products. The announcement sent global markets swooning as investors worried Trump’s threat could scuttle trade talks with China and deal a blow to both economies. The Wall Street Journal reported that China is considering canceling the trade talks in light of Trump’s threats.
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars....
— Donald J. Trump (@realDonaldTrump) May 5, 2019
....of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!
— Donald J. Trump (@realDonaldTrump) May 5, 2019
Trump has repeatedly claimed — despite multiple criticisms and corrections — that China pays tariffs directly to the U.S. But the tariffs are placed on goods imported from China. Importers. such as Costco, pay the fees to the U.S. and typically pass on some or all of the extra costs to American consumers in the form of higher prices.
The tariffs are a penalty on Chinese goods (including products made in China by American companies) that make them less competitive, not a tax on the Chinese government or Chinese companies, unless the companies have American operations that are importing goods to the U.S.
China in turn has placed retaliatory tariffs on U.S. goods, hitting American farmers particularly hard. They are suffering record bankruptcies despite some $12 billion in new subsidies from American taxpayers earmarked to mitigate the impact of Trump’s trade war.
Economists have estimated that the trade war is costing the U.S. more than $3 billion a month.
A University of Chicago study found that consumers paid an extra $1.5 billion for washing machines last year because of a Trump tariff imposed at the behest of Whirpool Corp. that only added $82 million to U.S. coffers. That was because manufacturers got away with charging more for dryers along with washing machines, even though no tariffs were added to the cost of dryers.
People on Twitter again pointed out Trump’s stubborn insistence on mischaracterizing the tariffs.
I hate to trouble you, Mr. President, sir, but just one tiny correction here: China doesn't pay "tariffs" to the USA. American consumers of Chinese goods pay the tariffs. It's a small thing. But it really does make everything you say about trade seem kind of stupid.
— David Rothkopf (@djrothkopf) May 5, 2019
China doesn't pay the tarrifs.... US consumers do.
— William Gordon (@wategos) May 5, 2019
The tariffs are angering farmers all around the country. Nice try to make it seem like this is a win.
— Ed Krassenstein (@EdKrassen) May 5, 2019
I’m an American who owns a small business. Some essentials for my business are only made in China and will NEVER be made here. China pays nothing; they hand the tariffs back to me and I PAY THEM. You’re adding a HUGE tax to small American businesses and KILLING FREE TRADE!
— kevin (@kevzenmichael) May 5, 2019
same for us. We pay 10% and will now pay 25% tax on the goods before we even get them to our warehouse. This is crushing for a small business and kills cash flow. It is not affecting China at all in our business. It’s only affecting the US companies that bring in their goods.
— Teddy Wonders (@willmfol) May 5, 2019
Sir - as an importer of goods from China that can’t be sourced in the US, let me just say that it is my company, not China, that must pay the 25% and we then must pass the cost on to our customers & eventually the US consumer. This is a tax on us, not China.
— John Seaver (@John_K_Seaver) May 5, 2019
This is not how tariffs work, dumbass.
Either you have absolutely no understanding of basic economics or you’re purposefully lying to your base because you’ve accomplished nothing of any substance.
Idiot or liar?
Moron or grifter?
Which is it, Donald?
— MatthewDicks (@MatthewDicks) May 5, 2019
American consumers are paying those tariffs, assbucket.
How do you STILL not get it??? pic.twitter.com/QGGmEjlH7i
— BrooklynDad_Defiant! (@mmpadellan) May 5, 2019
It's Americans who pay the tarrifs, not the Chinese.
— Justicegymrat (@justicegymrat) May 5, 2019
China isn't paying diddly. American consumer (read: VOTERS) are paying. Check one of your Wharton textbooks to see how tariffs work.
— Carl Robert (@CarlRobert2) May 5, 2019
Great, more taxes for Americans to pay 🤦♂️
— tsad (@tsad73) May 6, 2019
This article originally appeared on HuffPost.