Tariffs are in the news again. This time it’s tariffs on goods imported from China. In discussing the issue recently, President Trump provided an explanation that strongly suggested that the Chinese would be paying the tax. Like most of what Trump says, that couldn’t be further from the truth.
Tariffs are imposed by the Customs Service on the importer of goods. So, if Walmart or Costco were importing goods from China, they would pay the tax to the US Treasury. Of course, they would add that tax to the price of the goods. Therefore, it’s the US consumer who actually pays the tax in the form of higher prices.
Because of the impact on prices, it might make US goods or goods from other countries more competitive, thus punishing the Chinese indirectly. But it’s the US taxpayer who really foots the bill.
Thanks, Mr. President!
Lebanon (May 10)