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June 2019, Week 3

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 		 [Tariffs are not paid by foreign governments, such as Mexico and
China, or by Mexican or Chinese companies exporting goods to the U.S.
Instead, they are paid for by the American company importing the
goods. ] [https://portside.org/] 

 WILL SOMEONE PLEASE EXPLAIN TO TRUMP HOW TARIFFS WORK?  
[https://portside.org/2019-06-18/will-someone-please-explain-trump-how-tariffs-work]


 

 Allen Woods 
 June 18, 2019
The Recorder [https://www.recorder.com/my-turn-woods-tariffs-26181155]


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 _ Tariffs are not paid by foreign governments, such as Mexico and
China, or by Mexican or Chinese companies exporting goods to the U.S.
Instead, they are paid for by the American company importing the
goods. _ 

 A ship hauls containers at a container port in Qingdao in eastern
China's Shandong province Friday, July 6, 2018., Chinatopix via AP 

 

One of my favorite phrases from Mark Twain’s tales of Huck Finn and
Tom Sawyer is the description of them “telling stretchers” when
they were cornered with uncomfortable or damning questions. They
stretched the truth in desperation while they tried to survive as a
pair of orphan boys in a dangerous and unpredictable world.

But President Trump’s “stretchers” are so numerous and
self-serving that we can only conclude they are either
highly-calculated or a product of willful ignorance. General fatigue
forced me to give up being outraged by his roughly 10,000 documented
examples of straying from the truth since his election. But the
current proposition that tariffs are helping him win international
trade and policy wars while enriching the U.S. is simply too
preposterous to let slide into the “lie dumpster” with all its
relatives.

May 10, 2019: “Tariffs are NOW being paid to the United States by
China of 25% on 250 Billion Dollars worth of goods & products. These
massive payments go directly to the Treasury of the U.S.”

June 9, 2019: If Mexico doesn’t cooperate on border issues, .” . .
we can always go back to our previous, very profitable position of
Tariffs.”

I didn’t have the finest education as a child, but I believe it was
in grade school that I learned about tariffs and how they worked. My
early understanding is confirmed by every modern source, from
Encyclopedia Britannica to Barron’s, from investopedia.com to Tax
Policy Center.

Tariffs are not paid by foreign governments, such as Mexico and China,
or by Mexican or Chinese companies exporting goods to the U.S.
Instead, they are paid for by the American company importing the
goods. Any money from tariffs that goes directly into the U.S.
Treasury is paid by American importers, both manufacturers and
retailers. And we all know who pays in the end. Manufacturers and
retailers don’t simply reduce their own profits by a large
percentage (which would be a bad proposition on its own), but pass the
increased costs on to American consumers — you and me. 
If there is such a thing as a “profitable position” on tariffs, it
is funded by American consumers who are forced to pay higher prices.
The chain of events in international trade may take months or years to
take effect, but eventually tariffs act as a tax on ordinary consumers
through higher prices while the government collects the proceeds from
the importers. A study by economists at the Federal Reserve Bank of
New York, and Princeton and Columbia Universities sets the current
cost of the Chinese tariffs for consumers — you and me — at $1.4
billion a MONTH at the end of 2018.

Insiders in the Trump administration have reported that the president
cannot or will not accept new or different information if it conflicts
with one of his long-held beliefs. This may be the case with tariffs,
that reality conflicts with his “gut” belief and that, again, he
goes with his gut.

But what I find truly unconscionable are the actions (and non-actions)
of those in the administration who learned somewhere along the line
from grade school to grad school that Trump’s statements and
positions on tariffs are based on misunderstandings or lies. Even
though Greenfield native Kevin Hassett is leaving his position as
chairman of White House Economic Advisors, and has been recently
critical of tariffs for our economy, he continues to maintain that
American consumers won’t bear the greatest burden of the tariffs.
Instead, he predicts that it will be businesses that do. This
explanation is just as weak as the trickle-down theory: the profits
from corporate and top bracket tax cuts never really trickled down.
The idea that businesses will assume the costs of the tariffs without
passing them on to consumers is just as probable.

During his two years on the job, Hassett and all the others in the
administration have allowed Trump to lie about the collection of
tariffs without making any clarifying statements. They have followed
Orwell’s 1984 black-is-white approach, thriving in the midst of an
organized attack on the minds of American voters and citizens. This
“China and Mexico are paying tariffs to the U.S.” lie seems just
too big and obvious to be swallowed, but so far, it still lives in the
headlines.

  
_Allen Woods is a freelance writer and author living in Greenfield,
Ma. Comments are welcome at [log in to unmask] 

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