Trump is either stupid or lying when he says tariffs are paid by other nations

While it wasn't widely reported, probably because it isn't news when Trump says stuff that clearly isn't true, today Trump claimed once again that tariffs are paid by foreign countries. 

The Chris Hayes show on MSNBC did talk about what Trump said, correctly pointing out that this is another example, among a great many, where it is unclear whether Trump is incredibly stupid or an incredible liar.

My personal conclusion is that he's both, though I admit that in any particular instance, logically it is difficult for Trump to manifest both personality defects. 

Tariffs are a great example. At the moment the Trump administration is planning to impose 25% tariffs next week on imported products from Mexico and Canada, along with an additional 10% tariff on Chinese products on top of a previous 10% tariff. 

A reporter from Great Britain, I think it was, noted in a question to Trump about tariffs that they are paid by the business doing the importing, not by the nation from which the imported goods come. Per his habit, Trump responded by saying that it is foreign countries who pay the tariffs he's imposing.

If Trump really believes that, he's stupid about a basic important fact. But if Trump knows that tariffs aren't paid by foreign nations, he's lying about a basic important fact. Either way, it's crazy that the president of the United States is either stupid or a liar.

The Tax Foundation says in "Who Pays Tariffs? Americans Will Bear the Costs of the Next Trade War":

When the US imposes tariffs on imports, businesses in the United States directly pay import taxes to the US government on their purchases from abroad. The economic burden of the tariffs, however, could fall on others besides the US business directly paying the tax, including foreign businesses selling goods to US businesses (if foreigners lower their prices to absorb some of the tariffs) or US consumers ultimately purchasing the goods (if US businesses raise their prices to pass on the tariffs).

Historically, economists have found that foreign firms absorbed some of the burden of tariffs by lowering their prices, resulting in a combination of foreign businesses and domestic firms and consumers sharing the burden of tariffs. In contrast to past studies, however, recent studies have found the Trump tariffs were passed almost entirely through to US firms or final consumers.

So the Trump tariffs amount to a sales tax on American businesses and consumers. This isn't free money from overseas, as Trump often falsely claims. The tariff money that goes to the United States government comes from Americans, not foreigners. 

I've shared this image before, and I'll keep sharing it until Trump stops spouting falsehoods about what a tariff is: a tax.

If Trump goes ahead with his plan to impose wide-ranging tariffs on imported goods, inflation is expected to increase. The worst case scenario is that the United States ends up with the dreaded stagflation, a combination of a stagnant economy and rising inflation. 

Here's an excerpt from a Washington Post story today, "Trump says tariffs on Canada, Mexico, and China will take effect Tuesday."

While the president often claims that foreigners pay U.S. tariffs, it’s American importers who pay them to U.S. customs officials when they collect goods at U.S. ports. Ultimately, the burden of that tax is shared by the American importer, the foreign producer and the final customer to varying degrees depending upon specific market conditions.

“Trump is driving the U.S. economy straight into a wall and expecting American families to serve as human crash test dummies,” said Sen. Ron Wyden of Oregon, the senior Democrat on the Senate Finance Committee. “Slapping tariffs on everything Americans buy from Canada, Mexico and China will mean higher prices on groceries, gas and cars, with fewer jobs and lower pay when our closest trading partners respond to Trump’s trade war by buying fewer American products.”

Comments

[Monkey Mart]

It's a common misconception that foreign entities directly shoulder US tariffs. As the article highlights, American importers are the ones initially paying up, impacting the entire supply chain. This ultimately trickles down to consumers. It's like managing your own store in Monkey Mart – you gotta understand how pricing affects everything, from stocking shelves to keeping customers happy! Increased costs due to tariffs inevitably disrupt this balance, squeezing businesses and shoppers alike.

[Sanders]

It's disingenuous to claim other nations pay tariffs. While they remit the money, tariffs are ultimately passed onto US consumers through higher prices. It's basic economics, really. Maybe Trump is playing the infinite runner game of dodging responsibility, much like trying to beat your high score on the Dinosaur Game platform during a Wi-Fi outage, hoping nobody notices the truth. This misdirection hurts American businesses and families.