Opinion

WILFORD: The Trump Administration Finally Admits Tariffs Hurt American Consumers

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Andrew Wilford National Taxpayers' Union Foundation

From the beginning, the Trump administration has stuck to its guns on tariffs, claiming again and again that tariffs are paid by foreign businesses, not Americans. Yet, a recent administrative action provided a tacit admission of how false this claim is.

The Office of the U.S. Trade Representative announced that tariffs on certain items would not go into effect until Dec. 15, meaning that they likely would not impact this year’s holiday shopping. Items on the list are all products likely to be purchased as holiday gifts: “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”

In effect, this action puts the lie to a public position that most experts know to be false. Tariffs are not paid by foreign businesses that export to the United States, they are paid by domestic purchasers that buy their goods. Down the line, they are paid by American consumers who pay higher prices for the same products. Tariffs are a tax on Americans, and any revenues come directly from Americans’ pockets.

Because stores stock up on inventory months in advance, the December 15 implementation date ensures that holiday shopping won’t be affected by tariffs. That’s a big deal — the National Retail Federation estimates that holiday shopping accounts for 20 percent of total retail sales, though for some businesses this number can be as high as 30 percent.

Yet this action would make little sense if Trump truly believed that tariffs are paid by foreign businesses, not American consumers. If that were the case, why not take advantage of the holiday season to rake in some extra tariff revenue?

Instead, the administration is attempting to set things up to avoid a political backlash over how trade taxes impact American consumers and businesses during the busiest shopping time of the year. Debates over trade and tariffs can be abstract until it comes time to pay 10 percent more for your son’s new laptop.

And this isn’t the first time that Trump has acted to shield Americans from trade wounds he inflicted through tariffs. The federal government has already ponied up $16 billion in aid to farmers who have been impacted by the trade war.

Yet even that isn’t enough to stem the bleeding for an already struggling agricultural sector. China’s announcement in early August that it would no longer purchase American agricultural supplies represents a loss of American farmers’ fourth-largest customer. Yet while American farmers are struggling with that, Department of Agriculture Secretary Sonny Perdue is making jokes about “whining farmers.”

Unfortunately, the administration’s decision to delay tariffs in no way signals a change of heart on trade (Trump told reporters that he approved the delay “just in case”). Yet it does show that the administration does not truly buy into the rhetoric it puts about who is hurt by the trade war.

And make no mistake, it’s Americans who are paying the price. Even if they won’t be this holiday season.

Andrew Wilford (@PolicyWilford) is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to fiscal policy analysis and education at all levels of government.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.