..Because of Tariffs we will be able to start paying down large amounts of the $21 Trillion in debt that has been accumulated, much by the Obama Administration, while at the same time reducing taxes for our people. At minimum, we will make much better Trade Deals for our country!
— Donald J. Trump (@realDonaldTrump) August 5, 2018
Let’s compare that Fantasyland projecting with some hard data.
The Council on Foreign Relations reports 115 Percent of Trump’s China Tariff Revenue Goes to Paying Off Angry Farmers.
“Billions of Dollars are pouring into the coffers of the U.S.A.,” tweeted President Trump last month, “because of the Tariffs being charged to China.”
It would be nice if it were true. But it is, in fact, doubly false.
First, tariffs are not “being charged to China.” They are being charged to American firms importing Chinese goods. As the left-hand bar in the graphic above shows, such firms will pay about $8.4 billion in tariffs on China imports by the end of 2018.
Second, this tariff revenue does not remain in U.S. government “coffers.” As shown in the right-hand bar above, all of it and more is being paid out to American farmers as partial compensation for their losses from Chinese tariff retaliation. The U.S. government has already committed to paying out $1.2 billion more to angry American farmers than it will take in this year from angry American firms.
By launching a trade war with China, therefore, the president has simultaneously raised taxes on U.S. companies and lost the government money. And with the farm constituency critical to his 2020 re-election hopes, the losses are only set to mount going forward.
Tariff Man
….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN
— Donald J. Trump (@realDonaldTrump) December 4, 2018
Things We Know
- Trump is “Tariff Man”.
- President Trump and Treasury Secretary Mnuchin are Totally Clueless About How Markets Function
- Trump does not understand basic math nor concepts like “large amounts”. Paying down $21 trillion of debt via tariffs collected at $8 billion per year would take 2,625 years.
Point three presumes that the Treasury actually collected $8 billion in tariffs. The article shows that tariffs on Chinese goods cost $1.2 billion due to farm subsidies.
The administration’s plan to a Convene Plunge Protection Team (PPT) is icing on the clueless cake.
Mike “Mish” Shedlock
The Great Leader, Kim Il Trump, is the expert on everything. Under his guidance, we keep winning and winning. So much winning!
The jury is still out on the tariff debate. By some accounts, the world should have ended already yet here we are.
While its true that tariffs are mainly a tax on the buyer, in practice this is not 100% so.
Its a balance between the need for the exporter (China) to have US sales and the ability of the buyer to pay. If China desperately needs those sales, they may reduce their price some of all to mitigate the effect of the tariff. End result, most of tariff gets paid by Chinese exporter.
Obviously results may vary, but there is nuance to tariffs.
tariffs have never worked ever
They built US industry after the civil war. Big time.
different time period, different circumstances. besides anyone that supports tariffs supports big government. right now they are not working
Refreshing that a President actually thinks about reducing the debt.
First time in about 40 years…by my estimate.
Didn’t the Clinton administration at least temporarily stoped adding to debt?
How much of the soybean subsidies are a result of over production of soy beans and thus lower prices. If the Chinese are buying soybeans from South America instead why wouldn’t US soybeans go to their customers instead? The supply /demand equation is normally pretty close so something here doesn’t make sense.