Since the time President Trump introduced the use of tariffs into negotiations with China, some economists and companies with interests in China have sounded alarms stating that the tariffs would increase inflation and that the American consumer would suffer as a consequence. Over a year later no significant increase in inflation has been seen.
The president has stressed in multiple comments that the alarms about inflation have proven to be incorrect including in a joint press conference with Japanese Prime Minister Shinzo Abe.
“Foolishly, some people said that the American taxpayer is paying the tariffs of China. No, no, no — it’s not that way. They’re paying a small percentage, but our country is taking in billions and billions of dollars.” said the president.
Neil Bradley, executive vice president of the U.S. Chamber of Commerce conceded on Friday, June 14, that due to the specific targeting of tariffs thus far, costs have not yet escalated, as had been speculated previously. However he speculated that this time the costs will escalate.
“In particular it becomes escalating costs for consumers. So, if you look at the breadth of Chinese imports and the tariffs that have been imposed today, in most cases it’s on intermediate inputs. So, things that manufacturers or businesses buy from China that they then use to make other things here domestically in the United States,” said Bradley.
He added that although the previous tariffs did not cause the speculated inflation, that the upcoming tariffs would.
“We’re getting to that last raft of tariffs where we’re talking about things that you and I buy and, buy in a store and that’s going to be felt directly by consumers. There is much much less margin to absorb those, those increased tariff costs. And this is going to be a significant departure from what we’ve experienced over the last year or so with respect to how tariffs impact not just the economy but American families.” concluded Bradley.
President Trump has stated multiple concerns with China which have not been addressed by prior administrations. The president’s tariffs have forced China to discuss those issues which they had been reluctant to address in the past. Those issues include forced transfer of sensitive technology from U.S. companies as a precondition for doing business in China; intellectual property theft; hacking the computer systems of American companies to steal valuable research, development and technology; and excessive subsidizing of Chinese companies, giving them unfair global trading advantages.
During recent comments to the press while meeting with French President Emmanuel Macron, President Trump stated his intention to add further tariffs to China if trade negotiations are not successful.
“Well, you mean when am I going to put the extra $325 billion worth of tariffs? I will make that decision, I would say, over the next two weeks—probably right after the G-20. One way or the other, I’ll make that decision after the G-20. I’ll be meeting with President Xi, and we’ll see what happens. But probably planning it sometime after G-20,” said the president.
The Chinese regime imposed retaliatory tariffs, specifically targeting American farmers as they see this as a potential pressure point for President Trump. The president addressed this issue in the press conference with Abe.
The president said, “As you know, they’ve earmarked and they’ve gone after the farmer, thinking that if they hurt the farmer, I’m going to negotiate a bad deal for the rest of the country. I’ll tell you, the American farmer—these are patriots. These are great patriots.”
The president said he had multiple discussions and meetings with American farmers and shared some of what was discussed. “I said, ‘You know, I’m going to get you subsidy while China takes advantage of us and China takes advantage of you, by pinpointing you.’ They say, ‘We don’t want subsidies, sir. All we want is a level playing field.’ The American farmer— these are great patriots. They are unbelievable people. And they’re with me, 100 percent.” said President Trump.
The president stressed that by continuing to apply pressure on China through the use of tariffs, that China will be forced to alter the multiple long term issues with the United States in a negotiated trade deal.
“I believe that we will have a very good deal with China sometime into the future, because I don’t believe that China can continue to pay these, really, hundreds of billions of dollars in tariffs. I don’t believe they can do that. You know, businesses are leaving China by the hundreds, by the thousands — going into areas that are non-tariffed, including the United States, by the way.” said the president.