This Isn’t Rocket Science: Tariffs don’t penalize exporters
When I wrote a column last week crediting President Trump with Mexico’s release of the water it’s owed the Rio Grande Valley by saying no to Mexico’s request for more water west of the Continental Divide, tit for tat, a friend told me:
“It’s good that you wrote that about the water because you don’t want to come across as a guy who is always bashing Trump.”
I thought, that’s true because I have a lot of friends and readers of this newspaper who are happy with the job that the president is doing. So, no, I don’t want to turn The Advance into another media outlet that’s always bashing Donald J. Trump.
On the other hand, so much of what he does affects the Rio Grande Valley, and not in a good way, it’s hard not to write about the current president and his administration in a negative light, simply by stating the facts, not opinion.
Half the Country Loves Him
Why continue, though, pointing out what I don’t like about President Trump’s second term? I’m not going to change anyone’s mind. Anyone can read an online story about him, and then read the comments, and clearly, the country is split down the middle – about half like him, and the other half does not.
According to a Rasmussen Presidential Tracking Poll this week, Monday, Oct. 27th, 46 percent of likely U.S. voters approve of President Trump’s job performance, while 52 percent disapprove.
Almost 50/50. We also can’t forget that the president is the only Republican nominee to ever win all four counties that represent the RGV. Historic.
I do have one question, though, and it’s not a hard one: Why is it so hard for people to not understand that with regard to the president’s tariffs, the people paying for them are the American consumers, American companies, and not the country of origin?
It’s not rocket science. When the president said over the weekend that he’s going to slap another tariff on Canada because the prime minister ran a clip of Ronald Reagan talking about the downside of tariffs in a speech to the nation in 1987, it’s not Canada that’s going to pay, but the American consumers.
Same with his 100 percent tariff on China.
It’s not China paying the export tariff, but the American companies receiving the shipment from China.
Who Pays the Tariffs?
In some cases, the companies try not to pass on the tariffs to consumers, but they’re starting to, which is one reason the cost of so many things is going up, not down.
When the president says that he’s slapping a new tariff on (pick a country), it sounds nice, but in reality, the only people it’s hurting is us, the American consumers.
Typically, fans of the president don’t like The NY Times, but here’s an excerpt from a story it published Oct. 24, which carried this headline: “Companies Have Shielded Buyers From Tariffs. But Not for Long.”
The excerpt, which sheds light on who pays for Trump’s tariffs: “Since the Trump administration started imposing steep tariffs on goods from the rest of the world, the Treasury Department has been taking in about $30 billion a month in customs duties. On paper, American companies pay those bills when their products enter the country.”
Then the import tariff gets broken down to the consumer as time moves forward: “Companies had passed along about 37 percent of new tariffs to consumers, forced 9 percent onto their suppliers (U.S. based), and absorbed 51 percent through August, according to Goldman Sachs.”
So, American companies, so far, are eating about half the extra cost of the imports from other countries.
Leading up to Christmas, though, prices are expected to increase even more: “Tariffs passed through to consumers gradually could keep inflation elevated for a longer period.” (Source: NY Times.)
It’s just hard to fathom why tariffs are such a hard thing for most people to figure out with regard to who ultimately pays for them. Meaning, you and I.
China sure isn’t paying them, nor is Canada or Mexico, or any other country that the president has slapped with tariffs.
Apparently, approximately half the country is okay with that?