Free Trade

Coronavirus Finally Gets Trump To Admit Americans Pay His Tariffs

The White House announced a temporary suspension of tariff payments as a way to stimulate the American economy, but the relief will not apply to tariffs on steel, aluminum, or imports from China.

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President Donald Trump signed an executive order on Saturday that will provide some temporary relief from tariffs for some American businesses—but the order will not apply to tariffs imposed by Trump himself on imported steel, aluminum, or goods from China.

Even the businesses that could benefit from the change will have to find time to fill out additional paperwork before they get any relief. In a statement released Sunday, U.S. Customs and Border Protection (CBP) explained that "this payment flexibility will be available only for importers with significant financial hardship." As with so much of the Trump administration's trade policy, it appears this relief will be contingent on federal bureaucrats picking winners and losers.

Even though its scope seems limited, the new tariff policy is roughly akin to the Trump administration's earlier move to defer the federal income tax deadline from April 15 to July 15: People and businesses will still have to pay, but the delay will keep additional liquidity in the market. It would be better to lift those tariffs permanently, of course, but even a 90-day delay in payments will provide some flexibility to businesses currently facing a coronavirus-induced cash crunch.

"Any tariff relief is good news, but the benefits of this short-term deferral of duties are limited," says Bryan Riley, director of the free trade initiative at the fiscally conservative National Taxpayers Union Foundation. "At least the executive order seems to acknowledge the reality that tariffs are paid by Americans, not by China or anyone else."

Coming from the Trump White House, which has insisted for years that tariffs aren't paid by Americans but that they somehow function as a tax on foreign producers, this is a confusing stance. On one hand, lifting some tariffs as a form of economic stimulus—even if only on a temporary basis—is a welcome sign, and an acknowledgment that it is indeed Americans who pay the cost of those import duties.

On the other hand, if lifting some tariffs is good for American business, why not lift all of them? Trump doesn't seriously believe that the tariffs he's imposed on steel, aluminum, and Chinese imports are magically not paid by Americans too, right? But that's exactly what his latest galaxy brain trade maneuver seems to suggest.

Or, as The Wall Street Journal drolly explains: "The administration's defense of tariffs has complicated efforts to delay payments, according to people familiar with the debate. Mr. Trump has often said Chinese or other exporters pay the tariffs. In fact, U.S. importers pay them and frequently pass the extra cost on to American retailers, wholesalers, and consumers."

Indeed, the federal government may have lifted tariffs weeks ago in response to the COVID-19 pandemic if not for Trump's commitment to the fantasy world where Americans don't pay his tariffs. In mid-March, more than 100 businesses and trade associations sent a letter to the White House asking the president to immediately lift tariffs as a form of economic stimulus. Days later, a bipartisan group of lawmakers and Treasury Secretary Steve Mnuchin sent a letter to Trump urging the president to approve a 90-day deferral in tariff payments.

By March 28, CBP was reportedly preparing to do exactly that. But when he was asked about those plans at a press conference, Trump called the report "fake news" and then took steps to block the tariff relief, as The New York Times reported earlier this month.

Practically, Trump's partial deferral of tariff payments will apply to about half of all tariffs charged to American importers. Prior to the Trump administration's ramping up of American tariffs in a series of steps since March 2018, the federal government collected about $36 billion in annual tariffs. By 2019, that total had doubled to $72 billion, largely thanks to the tariffs on steel, aluminum, and Chinese-made goods that won't be exempted under the new executive order.

Keeping those tariffs in place, says Dan Ikenson, director of trade policy studies for the Cato Institute, a libertarian think tank, "presumably inoculates Trump from having to concede that his duties on China are actually paid by US importers."

"The burden on importers, according to this formulation—and, well, if logic's not your strong suit or your just willfully ignorant—is caused by the [tariffs that predated the Trump administration], but not the China or steel tariffs," Ikenson tells Reason.

That Trump has finally agreed to offer some tariff relief for American companies is a sign that there might be some limits to the White House's ability to ignore economic reality. But doing so will force his supporters to warp themselves into ever-more-ridiculous shapes to defend the president's tariff policy, which now seems to be that some tariffs are paid for by Americans but others are not.

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  1. So can we shut up about the tariffs already?

    1. Like we shut up about the income tax? I’d prefer reason run daily stories on tariffs and taxation-as-theft than read another coronavirus article.

      1. I’d rather have a million income tax articles, because millions of Americans can potentially be persuaded to our side. “Winning” on tariffs without winning on income tax is sort of how we got here.

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  2. Trump was a Democrat and big Democrat donor longer than I’ve been alive, and I’m getting old. Democrats have long been seeking new taxes and tax increases, especially opaque and / or multi-level ones like tariffs or a VAT. Trump has given them their long sought dream.

    Trump’s imposed tariffs pushed him past Obama into third place as the POTUS to impose the most new or increased taxes, and his proposed tariffs will leap him over Clinton and Johnson into worst place if he succeeds in imposing them. The self-proclaimed Tariff Man is the Tax Man.

    1. Exactly. Trump is an enemy of the free market.

      1. And while the Republicans always fell short from a libertarian perspective, pre-Trump they were an amplified voice against more taxes and more market interventions. The R’s surrender to Trump leaves America, despite lots of nasty noises back and forth, with one-party rule on the real issues; and cut libertarians off from their occasional access to the Republicans microphone and big amplifier on those issues.

        1. pre-TrumpHoover> they were an amplified voice against more taxes and more market interventions.

          1. No, the voice was there until Trump; admittedly, sometimes only the voice.

            Trump is the full surrender to a bigger, more expensive, and more intrusive government. Trumplicans took away the wrong lessons from the Obama “…reward our friends and punish our enemies” era. They unconditionally surrendered on limiting government and decided to get theirs using it.

            1. Welcome to populism. A nice populist upswell is the last gasp of the republic. Caesar could not have crossed the Rubicon, without the brothers Gracci that came before him.

              1. Nor the Catos being entitled assholes.
                The republic was broken even before the Gracchi

                1. I don’t know this has always read pretty well and true to me:

                  “By Liberty I understand the Power which every Man has over his own Actions, and his Right to enjoy the Fruits of his Labour, Art, and Industry, as far as by it he hurts not the Society, or any Members of it, by taking from any Member, or by hindering him from enjoying what he himself enjoys. The Fruits of a Man’s honest Industry are the just Rewards of it, ascertained to him by natural and eternal Equity, as is his Title to use them in the Manner which he thinks fit: And thus, with the above Limitations, every Man is sole Lord and Arbitrer of his own private Actions and Property.”
                  ~ Cato

                  Of course for apologists for Trump the Tariff Man might find it may be very difficult paragraph.

                  1. Pretty words for a guy who denied common soldiers any profit while he sucked up the lands they conquered.
                    But hey, at least he walked on marches.
                    Pretty speeches for stupid bitches

            2. Trump isn’t even as bad as W, you fn dolt

  3. I won’t have to wait long for Trumpflakes to come out and belittle Eric while ignoring his whole point which makes perfect sense- tariffs are paid by Americans and those who support Trump are grade A idiots.

    1. But don’t you know that tariffs are not taxes? And they are paid by Chinese exporters out of magic money which they never ever in turn pass along in higher prices; they are never not in a blue moon paid by Americans, because they are not taxes.

  4. those who support Trump are grade A idiots.

    Boehm doesn’t make this point. Don’t attribute it to him.

    1. Yes, good writers tend to avoid stating that which is as obvious as “water is wet” and “the sun is bright.”

      1. Never done any technical writing, have you?

      2. Yes, good writers tend to avoid stating that which is as obvious as “water is wet” and “the sun is bright.”

        Good writers, yeah. Reason contributors usually start with ‘wet roads cause rain’ and obfuscate from there.

  5. Can we perhaps impose SOOOO MANY tariffs on cheap chinese goods, that they become FREE for us? In states that vote heavily for Trump, at least, where entirely different, exotic laws of economics seem to apply?

  6. Boehm maybe you could write an article on the complete fucking collapse of the oil industry. JFC. We are truly fucked.

    1. Just take this article, and change “tariff” to “oil industry”. That’s pretty much what you’d end up with.

    2. Reduced energy costs will help everyone through this time of reduced incomes and will be an aid in building-up a pandemic adapted or post-pandemic economy.

      1. And put smaller oil producers out of business (already happening), and halt new drilling.

      2. And is an enormous indicator of cataclysmic depression and contraction of our economy. But otherwise I agree, glass half full guy.

  7. Well if tariffs piss off the chicoms so much, they can’t be all bad.

  8. The late 19th century featured a multitude of tariffs. When Congress struck down the tax on incomes of the Gorman Tariff Act in 1896, however, these same rural, populist farmers clamored for the income tax, resulting in the 16th Amendment.
    Or so the official story goes. What it neglects to mention is that the railroads and National Banks that was the target of the populists were federally connected enterprises. The National Banks are instrumentalities of the Federal government. They are NOT free market. The Big Railroads were federally chartered corporations, usually in the then territory of Utah. Subsided by Jay Gould and other crony capitalists, they were not free market. The 16th Amendment actually Affirmed the original taxing clauses of the Constitution, saying the income tax was an excise tax, not a new un-apportioned tax on profits . The Income Tax does not tax incomes-rather it taxes profits from the exploitation of a federal privilege, and the income only shows the extent of the privilege. A “trade or business” in the tax code is defined as “the functions of a public office”.
    Under the law of nations, selling goods in another country is a privilege, not a right. The federal government can lay a tariff excise tax on that privilege.
    Working for a living in the ordinary occupations of life is a right, not a privilege. Holding a public office or employment is a privilege, not a right.
    Why won’t Reason cover the almost 20 year income tax revolt that has produced full refunds of all withheld taxes, state and federal for those in occupations of common rights? See http://www.losthorizens.com

    1. “Holding a public office or employment is a privilege, not a right.”

      I can’t resist this as an invitation to add that such government employees don’t pay any tariffs, taxes, or any other government fees. If they appear to, it is no more than an accounting trick between artificial subdivisions of government.

      1. And paying no tariffs, taxes, or any other government fees is one hell of a privilege.

  9. As a wise man has said, “A tariff is a voluntary tax.” Of course Americans are paying the tariff. But only because they are buying a product from a non-American country. It’s the consumer’s freedom of choice, and sometimes freedom is not free. There is no case or controversy here to get upset about.

    1. Both because they are opaque and because they increase the prices of competitive and downstream goods and services, tariffs are not voluntary.

  10. The US economy is currently suffering under lockdown measures, seeing unemployment claims up to 22 million across the country.
    https://worldabcnews.com/coronavirus-us-president-trump-releases-relief-deal-for-businesses-world-news/

  11. Trump has decided to stop punishing China, and to stop making America great, and to stop defending and promoting the interests of the American worker, because . . . coronavirus?

  12. I wish we had input from the Trump Buttplug Club JesseAz, Sevo, LC1789, ………

    1. It is kinda nice without their continuous personal attacks. Seems… quiet. Peaceful.

    2. Don’t forget that dickhead with a name that starts with the letter G who accused me of incest and calls everyone a fag. Cheerleader for the Trumpista club. Death by woodchipper is too good for him and the ilk who cheer with him.

      Yeah

      1. O Great Compliant Guzba, how can i forget!

  13. Keep the tariffs and get rid of the income tax. We do not need imports from China. Open borders brought us the plague.

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