Day 843: White House economic adviser succinctly explains why Trump doesn’t understand tariffs

Donald Trump loves his tariff-related talking points. He uses them to explain how he’s “holding China accountable” or “winning” trade wars. He stretches the little information he knows about economic policy to give false explanations about how tariffs affect trade deficits and the positive benefits for Americans.

White House economic adviser Larry Kudlow threw water on most of Trump’s falsity on Sunday during an interview on Fox News with Chris Wallace. Talking about tariffs on Chinese goods, the truth completely undercut Trump’s explanations.

“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 oftentimes passes it on to U.S. consumers,” Wallace said.

“Fair enough. In fact, both sides will pay in these things, and of course it depends,” Kudlow responded, with Wallace interjecting to point out that “if it’s a tariff on goods coming into the country, the Chinese aren’t paying.”

“No, but the Chinese will suffer [gross domestic product] losses and so forth with respect to a diminishing export market and goods that they may need,” Kudlow said.

When pressed that Americans would suffer the real economic burden of tariffs, Kudlow couldn’t disagree.

Bottom line: Trump’s tariff talk and implementation is having a negative effect on the markets of both the U.S. and China. American taxpayers will suffer more than the Chinese government ever will, but Trump just wants a talking point that he thinks will score political points. And that’s true even when such bluster is not grounded in any actual economic reality.

843 days in, 619 to go

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