Policy

White House (Sort of) Admits Tariffs Are Paid by Americans

For two years, the president and his defenders have stubbornly claimed, contra both theory and evidence, that the duties are absorbed by China and other exporters.

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It took a pandemic for the White House to admit a basic economic reality: Tariffs on goods imported into the United States are paid by Americans. That's something that pretty much everyone outside of President Donald Trump and White House trade adviser Peter Navarro already knew. But for nearly two years—ever since Trump launched his trade wars in March 2018—the president and his defenders have stubbornly claimed, contra both theory and evidence, that the duties are absorbed by China and other exporters.

Despite that insistence, Trump on April 18 signed an executive order that will grant some American businesses a three-month deferral on paying tariffs. This will provide some "payment flexibility" for American importers facing "significant financial hardship" due to the COVID-19 outbreak and an ongoing economic shutdown, the administration said.

In its limited form, the new tariff policy is roughly akin to the administration's earlier move to defer the federal income tax filing deadline from April 15 to July 15: People and businesses will still have to pay, just not right now. Even still, Trump stubbornly refused to grant deferrals for certain industries. His executive order does not apply to the duties on steel, aluminum, and goods made in China that have been the centerpieces of Trump's trade war. In practice, the policy applies to about half of all tariffs charged to American importers.

That creates a new plot hole in the ever-evolving justifications for Trump's tariffs. If deferring some payments is a boon for American business, why not eliminate them all? Trump doesn't seriously believe that the tariffs he's imposed on steel, aluminum, and Chinese imports are magically not paid by Americans if the other tariffs are, does he?

"The burden on importers, according to this formulation—well, if logic's not your strong suit or you're just willfully ignorant—is caused by the [tariffs that predated the Trump administration] but not the China or steel tariffs," says Daniel J. Ikenson, a trade policy analyst at the Cato Institute.

It would be better to lift the tariffs entirely, or at least to grant deferrals for everyone. Instead, American businesses will have to fill out more forms asking for relief. In a statement announcing the shifting tariff policy, U.S. Customs and Border Protection said deferrals would be granted only to companies that can demonstrate significant economic hardship.

The Trump administration is finally admitting that Americans pay for tariffs, but it seems the White House remains, in the midst of a colossal economic crisis, committed to picking winners and losers.

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  1. It’s all the cost of making America great again. You didn’t think it was going to be free, did you?

    1. I thought it was the giant wall that was going to make us great again.

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    2. Poor Boehm and Jerryskids.

      All those products sent to the USA where the Commies pay tariffs upon entry.

      1. LC, first let me say welcome back.

        where the Commies pay tariffs upon entry.
        Also, you couldn’t be more wrong, unless you are calling US importers commies.

        This is a pretty basic explanation so you should be able to follow it.
        https://www.taxpolicycenter.org/taxvox/what-tariff-and-who-pays-it

        1. Chinese that ship products to the USA pay tariffs.

          American products are not required to pay tariffs.

          You guys are still trying to back up the lies that unreason spreads.

          1. I guess it wasn’t basic enough for you to understand. I’ll see if there’s a Sesame Street episode.

  2. It’s kind of amusing to scroll through Boehm’s Twitter feed and size up his following. It’s essentially zero.

    Boehm really is a thoroughly uninteresting person. But you can tell that from his simpering headshot alone.

    1. Yeah, that’s usually how I judge people’s knowledge… based on Twitter following.

      1. Veracity is a function of popularity.

        1. Damn you didn’t suck him off enough down there doing your “two retards one tariff” act?

      2. I notice not even your mom follows you on Twitter. I know because she told me last night in bed.

      3. Boehm gets his garbage stories from Twatter, so you would think he would have more idiots want to read his worthless nonsense.

        Its like all the media hacks. They really went all in on people accepting their propaganda and paying them for it.

        FAIL!

        HAhahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa

      4. I judge his knowledge by what he publishes here. It’s C- grade.

  3. Stupid libertarians and stupid Reason. Tariffs on Chinese goods are tariffs on China. They don’t punish Americans, they punish China. They make America richer by making goods from China more expensive, except that there is no cost to Americans because they’re tariffs on China.

    Why is that so hard to understand?

    MAGA 2020!

      1. Tulpa is speechless as well as empty-headed today! I wish that Tupla was TOTALLY speechless!

        1. OMFG how do you cry about literally everything shit eater

      2. Your best post ever! I agree!!

        1. So are we supposed to keep pretending we don’t know you’re SQRLSY?

          Because it’s obvious to everyone.

          1. Sarah Palin’s Buttplug is working MUCH better today, than Sarah Palin’s tinfoil hat, which is NOT working at ALL!

            1. ok BigT

    1. Clearly it only makes sense to cut tariffs during an economic downturn due to a virus in order to drive economic growth. Otherwise, Trump wouldn’t have done it now.

      Clearly tariffs make a lot of sense when it comes to economic growth when there isn’t a virus around. The economics switch back to normal without viruses messing them up. Otherwise, Trump wouldn’t have implemented tariffs before the virus hit.

      1. Oh, I get it! Tariffs are great, but they get sick when there’s a global pandemic! Those poor, sick tariffs. I hope Trump is nice enough to give them some chicken soup.

        1. You just have to remember that Trump is right. It’s not always necessary to justify it with economic theory or principles of freedom. If you start from the position that Trump is right, it will become evident how he is right at some point in the future (once the talking points get circulated, for instance.)

          1. He is definitely the greatest economic mind ever. I mean, he’s clearly refuted Smith, Mises, Hayek, Friedman, and everyone else who advocated for free trade.

            1. Ah you answered it’s just more fellating each other.

            2. Now you get it. See, until the talking points get circulated the goal is ad hominem attacks on anybody who challenges the party.

              1. It’s nice that sarc found someone to get him off after he asked me out and I shut him down completely.

          2. So, are you two going to finish in each others’ mouths or just suck each other off?

      2. Same as STOLEN stimulus money. Politicians either think the citizens are their Slaves or that we all live in a world where goods fall from the sky. Either way the very foundation of money; the *earning-it* part is being wildly stolen by corruption which makes every $1 earned worth far less the labor put into getting it.

    2. Don’t forget, as one of the Trumpistas who is no longer said many times, tariffs are not taxes. So, no, duh, Americans don’t pay tariff taxes.

      1. I just assume that all those former accounts have been absorbed by Tulpa.

        1. It’s nice that you pretend you dont know that’s SQRSLY

          1. Duh, we’re all SQRSLY.

            1. God you always choose the stupidest shit to say.

              1. Yeah, some of that Old Testament stuff was pretty stupid.

      2. “tariffs are not taxes. ”

        The Constitution says that too.

        1. Forget it man, it’s cucktown.

        2. Go on …..

    3. Im an American and I DONT pay tariffs.

      1. Then you must not buy anything. With very few exceptions, most everything available on the shelf has parts and materials that came from somewhere else. Tariffs that were paid on that stuff are baked into the price you pay. So unless you don’t buy anything except vegetable from the farmers’ market, and carry them home in your hands, and you grow your own cotton and spin your own thread and weave your own cloth and sew your own clothes and made your own machines from metal that you mined and smelted yourself, you indirectly pay tariffs all. the. time.

        1. Your links always seem to fall off.

          Poor unreason sock trolls.

          1. If you buy something made in America from imported steel, you are indirectly paying the tariff as part of the final price. No need for links. It’s so obvious that if you cant see it you are seriously stupid.

      2. I suppose you don’t pay corporate taxes either, except that you do.

  4. Fortunately corporations absorb taxes and regulatory costs so consumers can afford the tariffs.

  5. I won’t be satisfied until the White House admits tariffs hurt Reason.com’s benefactor Charles Koch. Even before the #TrumpVirus knocked Mr. Koch’s net worth down to a pathetic $50 billion, he was stagnating around $60 billion. Which is an unacceptably low figure resulting from Drumpf’s high-tariff / low-immigration policies.

    #HowLongMustCharlesKochSuffer?
    #VoteBidenToHelpCharlesKoch

  6. When China stops using the UPU treaty to force U.S. tax-payers into communistic-Ly paying the shipping on their crappy products (i.e. subsidizing China) and ends their VAT tax exemption on exports and the USA gets rid of it’s FORCED federal labor union (employee benefit laws) than and only then will I be against tariff’s.

    And just as sarcasm states – It’s a tax on China produce. People who don’t try to buy inside communistic treaties that put tax-payers on the hook for their purchases don’t have to worry about Tariffs.

    1. Very good point. Free trade isn’t a good thing in principle, it’s only a good thing if everyone plays by a certain set of rules that change depending upon how close one gets to the goalposts.

      1. Which party is in control also has something to do with it.

        Trump, clearly wants free trade. Remember that realistic offer to have free trade at the G8 summit? If the rest of the world isn’t going to accept free trade then it only makes sense that we tax THEM through tariffs. Except when viruses hit, then tariffs become a burden for Americans.

      2. Free trade is a damned fine thing in principle, even unilaterally.

        1. Depends on your point of view. From the customers’ point of view, yes free trade is great. From a producer’s point of view not so much.

          Free trade encourages innovation because producers are not protected from competition, and the consumer reaps the

          Protectionist tariffs encourage stagnation because politically connected producers are protected from competition, and that doesn’t benefit anyone.

          1. Now do the bit where foreign producers are immune from political connection in the U.S. to benefit themselves.

            Go ahead, we’ll wait.

            1. Is that meant to refute my point?

  7. If deferring some payments is a boon for American business, why not eliminate them all?

    And if printing money is a boon, why not eliminate taxes?

    1. Chicken-little likes to “boon” about products falling from the sky but deep down knows he’s really a lying crook. He probably knows those products are actually coming from SLAVES that he and his mob of “the sky is falling” screamers has created though false-alarming.

      It’s okay to own slaves so long as the sky is falling. Chicken-little calls it’s “helping” against your own free-will.

  8. People only give a sliver of a shit about tariffs at this moment because Trump. I guarantee you 95% of people complaining about tariffs today probably hasn’t even heard of them before, or knew about them but only in the sense that some of them might exist and do stuff.

    Suddenly, after close to 250 years of tariffs, now is the moment when they’re suddenly ‘way too high’. Hell, it might even be true since tariffs are certainly going up. Who knows exactly where ‘too high’ is. Not even economists agree, though I’d say most of them would say ‘lower is better’.

    Subquestion: is the cheap-ass price on that big screen TV worth, say, Japan becoming Chinese? Because notably, those kinds of things happen and when they do happen who’s side do you take? The communists who sell you cheap-ass TV’s, or tiny little Japan?

    I notice Tibet is still not free, and you don’t even see hippies wearing shirts about it anymore. Weird, right? Guess they’re watching Everybody Loves Raymond on their big-screen instead.

    If you look at trade purely in terms of trade, you might miss that economic warfare exists and there are other things at stake than just trade. We invented it, and the Chinese are in the game to win it.

    One thing is for sure, I’d feel a lot better about trade with China if they’d stop acting like a shitty trade partner and maybe stop putting ethnic minorities and dissidents in ‘happy fun time’ camps. They could outdo Hitler and we wouldn’t give a shit, and we don’t even want to know the answer on how many people they’ve literally murdered.

    1. “People only give a sliver of a shit about tariffs at this moment because Trump.”

      Well when the guy calls himself Tariff Man…

      “Suddenly, after close to 250 years of tariffs, now is the moment when they’re suddenly ‘way too high’.”

      Well when the president announces a trade war and then hikes them with the intention of making imports more expensive than domestic alternatives…

      “… you might miss that economic warfare exists…”

      Yeah. When a government disrupts another nation’s trade with force it’s an act of war on that nation. But when a government disrupts it’s own nation’s trade with force it suddenly becomes economic warfare against someone else?

      “We invented it, and the Chinese are in the game to win it.”

      Define win.

      1. China would love to make it too expensive to produce anything in the U.S., because then they can do whatever they want to neighboring nations. It also enriches the party, which gives them a lot of rewards to dole out to loyal members.

        Thanks for replying though, since you’re a great example of a person that knew nothing about tariffs before Trump came into office. You might be surprised to learn that we’ve always had them, and that they’ve been way higher before.

        Yes, low or no tariffs are preferable. But probably preferable when your trade partner isn’t a bunch of genocidal communists since they are prone to alter deals and stab you in the back without notice. I mean, we invented those moves so how do you not see them being used by someone else?

        1. “China would love to make it too expensive to produce anything in the U.S.,…”

          Ever heard of comparative advantage? If it’s cheaper to produce shoes in China then we do something that is cheaper for us to do. Both sides benefit. For example most of that stuff that is produced so cheaply in China is designed right here. I don’t know about you, but I would certainly prefer an engineer’s paycheck over that of a machine operator.

          “You might be surprised to learn that we’ve always had them, and that they’ve been way higher before.”

          Yeah, no shit. We’ve been through protectionism before. You may be surprised to know that the Great Depression was made worse by a the Smoot-Hawley Tariff.

          “But probably preferable when your trade partner isn’t a bunch of genocidal communists since they are prone to alter deals and stab you in the back without notice.”

          Deal with that if/when it happens.

          1. Yes, I took economics 102 thanks very much.

            Nothing weird happened in the 80’s by relying on a bunch of murderous regimes to sell us things at low prices. No, sir!

            And, for what it’s worth, this is literally the reason why they call them ‘protectionist’ tariffs. You are protecting domestic production because, notably, you have very little control over foreign production so you better trust your trade partners and/or plan for them to fuck you by insulating at least some of your capacity.

            Do you trust China enough not to protect some domestic capacity? What could they have possibly done to earn that trust?

            1. Those damn foreigners trying to sell us cheaper stuff so we can have more money left over to buy other stuff! They’re undercutting domestic producers who can’t compete on a fair playing field! We need government to step in and make sure consumers aren’t subjected to cheaper stuff! Who’s gonna protect the consumers?!?! Aaaaauuughh1!!1!1!1!!!!

              1. So, what, you just break into pieces when challenged? Our politicians are part of the problem by tilting things in favor of foreign labor.

                Turns out that if you set a high price floor on labor and regulate everything, but other countries pay pennies on the dollar for labor and hardly regulate at all, domestic labor and production gets the shaft in the end when you open free trade to those countries.

                Do you disagree? Or is your assumption that the United States does about a billion things first before tackling tariffs?

                1. “So, what, you just break into pieces when challenged? ”

                  Here’s a clue. If my comment seems absurd and contains a lot of exclamation points, it’s likely that it is intentionally absurd to make a point.

                  America manufactures more stuff than ever. It’s manufacturing employment that is down. Not output. Output per person is much higher than in most of the world. That’s because they still do lots of stuff by hand, and they get paid pennies to do it. Well their daily output is probably less than what an American manufacturing employee puts out in a few seconds.

                  It is a myth that America doesn’t produce anything.

                  Let’s dial it back a century or so when well over 50% of the population farmed. Now it’s like 1% and they’re putting out more food than ever. Same thing with manufacturing.

                  Manufacturing isn’t going away. Tedious factory work is. And I don’t have a problem with that.

                2. What does all this have to do with customers me promoting free trade, as in having the freedom to do business with people across political lines without being forced to pay a penalty to the government?

                  Free trade is personal liberty. It means I can do business with Smith, Chong, or Gupta, and Uncle Sam doesn’t interfere.

                  I value personal liberty over not allowing creative destruction to naturally occur by penalizing individuals who choose to buy from foreign competition.

                  1. You don’t seem to realize that China is being subsidized by our own government. That is the part you’re missing. Uncle Sam IS INTERFERING. How does China ship products to U.S. for $0.15???? I can’t even ship an envelope to my next door neighbor for that price… It’s because of the UPU treaty in which tax-payers pay your shipping. Now what’s so fair about that?

                    It’s Uncle Sam’s intervention that has made China products so easy to obtain and the very cost of its own citizens. THANK GOODNESS Trump is renegotiating those curs-id trade deals.

                    1. Two wrongs make a right?

                  2. Two Debits don’t make Credit.

    2. Exactly. Never mind that the United States of America was founded with tariffs paying for much of the federal budget.

      Trump bad. That is why we have KungFlu hysteria, coups, impeachments, protests, mask requirements, and violence.

      Since the Lefties cannot control America, they will burn it down. Hack Propagandists like Boehm are there to help them.

      1. You know, I thought you were gone but I’ll be damned if I can see a difference between ‘real’ LC and this post.

        1. Im always around. Just getting local residents of Georgia ready for Civil War 2.0 and traveling.

  9. Nobody wins a trade war, or any other war. One side may lose more than the other.

    Saw something recently about whiskey. We make some really good whiskey and export a good amount of it. Apparently there was a spat about airplanes so a tariff and another retaliatory tariff on whiskey was launched with the euros. The result being that both sides have suffered losses in exports. Because of an issue between Boeing and Airbus.

    What is a libertarian to think? How can any of this be good.

    Always focus on the individual.

  10. Odd that Boehm, et al, never seem to provide an alternative to ameliorating China’s trade and economic misbehavior. The three choices to defend against stealing intellectual property, abusive monetary policy, or cyber threats are: sanctions, tariffs or military action. Boehm complains about tariffs but doesn’t offer his “solution”.

    1. Trump already proved that by standing up to foreign nations, he can get better trade deals for the USA.

      Trump offered Free Trade and was refused. Now the articles are flying how these countries need American trade so bad that they must each decide to make deals with Trump or help Biden win the White House.

    2. Since they also complain about sanctions, the answer is obvious isn’t it? Nothing.

    3. Why do we get to impose rules on other countries? Surely it’s not the libertarian position that we need a global government capable of enforcing trade rules.

      1. And your “solution” to Chinese misbehavior would be what, exactly?

        1. Let individuals decide how they want to deal with it. Corporations can decide if utilizing Chinese suppliers and/or access to their market place is worth the risk of IP theft or the costs associated with protecting their IP in China. It’s none of your business (or the government’s) how a private company chooses to deal with China.

          1. Now insert ‘sell strategic weapons’ into the mix and see how long that point of view lasts.

            1. Strategic weapons. Any advanced military technology is not privately owned. The F-35 is manufactured by Lockheed-Martin they do not own them nor the rights to sell them. They are bound by multiple contracts and agreements. That aircraft was not just some commercial venue.

              It is a separate issue. A straw man. A lobster or a bottle of Jack Daniels are not at all the same.

              1. But we’re talking about free trade.

                It’s no strawman, it’s the actual thing.

                The U.S. government, since they would not be paying for this theoretical weapon, would not own this weapon.

                China would.

                Because China would be the one paying for the weapon.

                As there are no trade restrictions, it seems pretty obvious that means there are no restrictions on trading anything. Weapons included.

                If weapons are excluded, than what the fuck are you talking about? You must be assuming that only governments can come up with designs for killer weapons, even though you already admitted that you’re well aware they were privately designed.

                Do other nations not exist in this world? I mean, I freely admit that’s the most likely path to free trade but…it’s weird to see someone else present that as a given in their argument.

                1. No they were not privately designed nor funded. The F-35 program is in the $1.5 trillion range projected and is an international effort. That does not even include weapons and other upgrades.

                  Our nuclear arsenal is not at all privately designed nor funded. Nor are the means to deliver them.

                  The military is what it is. If it were up to me the US would cut the budget. I would still maintain a very robust defense force. That is just me.

                  Look, you do not need to spend this much. The US spends far more than anyone else. We spend more than the next seventh nations combined. $716 billion. More than the combined expense of China, Saudi Arabia, India, France, Russia, UK, Germany. If that is not a boondoggle I do not know what is.

                  Oh free trade. If you think tariffs are a path to that go ahead. Has not worked ever.

          2. You got it Leo.

            “Solution” to Chinese misbehavior, Korean, Saudi, Canadian, your dogs, would be what? Too funny. Obviously more government in charge of liberty and economic freedom.

            You are one of the few libertarians who bother on this website.

            1. Thanks Echo. I appreciate your comments here too.

              It’s funny that both conservatives and liberals often claim that libertarians don’t have a “plan.” As if leaving people to their own devices isn’t itself a plan. When they say plan, they usually mean something more inline with five year plans. Unfortunately the left and the right both want to plan your life to meet their world view.

            2. You missed the solution of deregulation of our economy and deregulation of our labor sectors.

              Deregulating ourselves makes us more competitive with nations that…surprise…regulate less. Or with our already-present black market labor that works for below minimum with virtually no regulatory oversight.

              That said, with the current move to a $15 minimum wage I suspect no one will vote for Mr. or Ms. Pay Everyone Less, even if it meant everyone would be working.

              1. Minimum wage is just a way to steal other peoples savings.

                When producers bumps the wage of their workforce to $15/hr they just raise the market price to compensate. The minimum wage increase the employee makes is instantly matched by higher prices so they haven’t made a pinch more. Value isn’t set by monetary games.

                Who really looses though is those who have saved USDs. Their purchasing power just got lost to inflation. It a sure end-game of entire destruction of USD (fiat money) which will destroy the economy for repair. Hundreds of countries with heavy hand-out governments has gone down this road over and over again (Venezuela being the most recent). Some people have a hard time learning anything.

          3. So Laundering money to China is A-Okay? China has no law against laundering U.S. money. Rob a bank, launder it to China – whoopie!!!

            The U.S. Constitution granted the federal government the power and authority to setup trade agreements with foreign entities and for good reason.

    4. Boehm complains about tariffs but doesn’t offer his “solution”.

      Unilateral free trade. Or whatever policies move us toward that direction, not away.

      Of course just recognizing that individuals trade, not countries would be helpful. Then it might be obvious to you that forcing willing trade partners to comply with government rules is a violation of the NAP. If a company doesn’t understand the risks of IP theft in China by now and either protect themselves or choose not to do business in China, then that has to be on them… not us as a nation. Even if the goals are noble, that the US government would use it’s corporations and citizens as foot soldiers in a trade war is a form of collectivism that nobody who claims to be libertarian should be for.

  11. “‘Nationalist’ Is How a Republican Spells ‘Progressive.’” ~ David French

    The progs have always sought a hidden national tax(es) to add to the income and payroll taxes where people can see and get upset about about that government theft. Trump, a lifelong Democrat and Democrat crony / donor, became a fake Republican and gave it to them. Trump’s imposed tariffs pushed him past Obama as the third worst POTUS for new / or increased taxes, and his proposed tariffs would push Trump past Clinton and LBJ into the worst POTUS for new / or increased taxes. Trump is still the same man of the left, just the OLD left. LBJ would not have liked Obama any more than does Trump.

    Trump is a full surrender of the American Experiment in growing liberty and prosperity to statist squabbling for slices of a zero sum pie.

    1. Yeah you’re not gonna push that fat dumpster fire onto us.

      1. You of the left can run from Trump, like the “right” ran to Trump; but both sides have to ignore everything spanning from Wilson to LBJ to avoid severe cognitive dissonance.

  12. Trump: best President in US History

    1. Your citation fell off.

  13. Didn’t everybody/anybody/journalists know? Tariffs are “paid” by sellers and buyers both, in proportion to things like demand/substitutability and “elasticities.”
    If demand is weak, sellers will “pay” the tariff by lowering their prices or just bowing out of the market. If demand is strong, buyers will pay the tariff by paying the higher prices needed to cover the tariffs.
    And these factors change over time. Is that so hard to figure out?
    Most of these things settle out, at least temporarily, as a compromise, where both parties “pay” the tariff, and trade continues, although at a lower volume. We all suffer to pay the government.
    It’s an old story, isn’t it?

    1. Well said. Goes right along with, “If you want ‘free-trade’ why not start right here at home. What’s the big idea in lobbying for some foreign country to have ‘free-trade’ while restricting our own.”

  14. Finally, my paycheck is $ 8,500? A working 10 hours per week online. My brother’s friend had an average of 12K for several months, he work about 22 hours a week. I can not believe how easy it is, once I try to do so. This is what I do…. http://www.Topcitypay.com

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