Trump’s right, tariffs aren’t forcing up consumer prices

Trump’s right, tariffs aren’t forcing up consumer prices
Donald Trump with Chinese President Xi Jinping (Image: YouTube screen grab)

[Ed. – Notice this article doesn’t claim that consumers don’t ultimately pay ALL the costs of retail goods.  We do, of course. Otherwise the goods wouldn’t be on offer. What it does is point out how other pricing factors are adjusted to keep goods viable in a competitive market.  And note, in turn that that has NOT meant American wages going down.  In a highly employed economy, it simply can’t.]

Donald Trump’s insistence that American consumers do not suffer from tariffs is entirely borne out by the data.

Neither the tariffs placed on steel and aluminum imposed a year ago nor the more recent ten percent tariff on Chinese goods pushed prices of goods sold to consumers up. And now we have price data from May that once again indicate no tariff pricing pressure on consumers. …

Tariffs are taxes, to be sure. But unlike a sales tax or a gas tax, consumers do not directly pay any tariffs. Tariffs are paid by importers, often large U.S. companies that are importing from their own foreign subsidiaries or foreign contractors. But businesses cannot raise their prices just because their costs or taxes go up. Sometimes they have to absorb the costs. …

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In addition, the Chinese currency has depreciated over the past year, which makes imports from China less expensive. And there is anecdotal evidence that Chinese manufacturers are slashing prices in an attempt to hold on to market share in the U.S.

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