Trump often insists that the tariffs he has imposed on imports from China and other countries are being paid by China and represent billions in gains to the United States.
Unfortunately, no. Tariffs are normally paid by consumers in the importing country, not exporters. And that’s been checked in the case of Trump’s tariffs: Prices of goods subject to those tariffs have risen sharply, roughly in line with the tariff increases, while prices of goods not subject to the new tariffs haven’t gone up.
So far, the US is losing the trade war with China:
- We are paying as much extra to China in higher prices as the government collects in tariffs from China.
- We are selling less of those goods that China has imposed tariffs on, and exporters are being hurt financially.
Of course, that’s doesn’t mean China is winning, it means boths sides are losing.
Ripped Apart
