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Trump’s China tariffs have not caused Americans to pay $1,000 more a year. Here’s why.

By January 17, 2020No Comments
The Washington Post | January 17, 2020

Gail Ross can tell you two things with certainty: Americans, not the Chinese, are paying for President Trump’s tariffs. And second, most of the costs were absorbed by U.S. companies, which is why consumers haven’t seen excessive sticker shock at stores.

Ross is chief operating officer at Krimson Klover, a women’s clothing brand headquartered in Colorado. Like many U.S. business leaders, Ross has a stack of import duty bills on her desk that show the hefty taxes her company has been paying for every item coming from China. She was so frustrated about Trump’s repeated assertion that the Chinese are paying the cost of the tariffs that she made bumper stickers saying “China is paying for the tariffs like Mexico is paying for the wall” and gave them to friends for Christmas.

At the same time, Ross also warns friends to be skeptical of claims that the tariffs are triggering massive price increases on shoes, clothing, toys and more. Headlines last year proclaimed Trump’s tariffs could cost the typical American family $1,000 more a year. The eye-popping number came from a JPMorgan analysis that assumed the full cost of the tariffs would be passed on to consumers, which is what is generally taught in introductory economics classes.

 

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