— State of the Union (@CNNSotu) August 18, 2019
White House trade adviser Peter Navarro repeatedly claimed on Sunday that Americans are not bearing the brunt of President Donald Trump’s tariffs on China, despite findings by economists that they are essentially a tax on U.S. producers and consumers.
“They’re not hurting anybody here. They’re hurting China,” Navarro told Jake Tapper during an appearance on CNN’s “State of the Union.”
Defending his assertion, he said, “You put on 10% tariffs on $200 billion, and China devalues its currency by 12%. Are consumers bearing anything on that? No. We have seen absolutely no evidence in the price data. It’s not showing up in the consumer price index.”
While Navarro is correct in stating that competitive devaluation could neutralize the impact of tariffs, thus steadying prices, an escalating trade war could spell trouble for American buyers.
In May, researchers from the International Monetary Fund, the Federal Reserve Bank of Boston, Harvard University and the University of Chicago released a study stating that the burden of the tariffs ultimately falls “largely on the U.S.,” a conclusion with which the White House seems to have tacitly agreed.
Last week, the Trump administration announced that it would delay hitting an additional $300 billion in Chinese goods with 10% tariffs, pushing the effective date for about $156 billion of the goods from Sept. 1 to Dec. 15. In an interview with Fox News, Navarro called it a “Christmas present to the nation.”
However, on Sunday, he downplayed the move, calling it “a goodwill gesture that the president made to the Chinese which protects consumers from any possible Christmas or Hannukah impacts,” again emphasizing that U.S. shoppers aren’t shouldering the consequences right now.
Though Navarro kept the focus on current prices, the administration’s branding of the delay as a “Christmas gift” represents a slight change in its messaging on tariffs, which the president previously and erroneously claimed would be paid by China while strengthening the U.S. and reducing its trade deficit.
A separate IMF analysis of the May study said that while consumers in both China and the U.S. “are unequivocally the losers from trade tensions, ... tariff revenue collected has been borne almost entirely by U.S. importers.”
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