U.S. President Donald Trump said at the “Made in America” product launch at the White House on July 15th that the U.S. is on the verge of a trade war, and that tariffs will generate billions of dollars in revenue that will allow him to continue fighting the trade war without harming domestic interests. But that is not the case.
The New York Times website reported on July 16th that government data showed that the revenue from the US by imposing tariffs on $250bn ($6.9bn) of Chinese goods was not enough to cover the president’s financial aid to farmers, let alone many other industries hurt by trade tensions. The longer the dispute with China drags on, the harder it will be for Mr. Trump to ignore the difference. According to U.S. Customs and Border Protection, Trump’s tariffs on Chinese imports have increased by $20.8 billion. Mr. Trump has pledged $28 billion to American farmers hurt by the trade war. Mr. Trump has launched two rounds of financial support for farmers: nearly $10 billion of the $12 billion package announced last July, and another $16 billion announced in May.
Countless other companies, including aircraft manufacturers, technology companies and medical device makers, have lost contracts and revenue because of Trump’s tariffs and China’s anti-U.S. goods, and the government has not provided them with similar relief. Most trade experts and business leaders disagree with the Trump administration that trade wars have no negative impact on U.S. businesses. “It would be absolutely foolish to say that this will not cost the United States. Rufus Yeksa, president of the National Council on Foreign Trade, which represents major U.S. exporters, said.
The report also notes that numerous studies have shown that U.S. consumers bear most of the cost of tariffs. Research by the American Tax Foundation and the Wharton School of Pennsylvania budget model sits that tariffs raise commodity prices, which amounts to a big tax increase on Americans. As a percentage of income, the damage is concentrated on the lowest income earners, who spend more on imports as a percentage of wages than the middle class and the rich. Over the past year, the U.S. government has gradually increased tariffs on Chinese goods, from an initial $34 billion worth of products to $250 billion worth of products, and increased tariffs on those goods. But the monthly revenue from tariffs has not increased this year.That’s because the U.S. imports fewer Chinese goods than a year ago.
The decline appears to be the result of an overall slowdown in trade, which has also led to a decline in U.S. manufacturers’ exports. The media believe the Trump administration has been trying to use government leverage to shelter and support U.S. businesses. On July 15, Mr. Trump signed an executive order that would increase the proportion of u.S.-made steel in federally funded projects to 95 percent from the current 50 percent. That’s the specific synod of the trade war launched by Trump in the United States.