WASHINGTON: US President Donald Trump yesterday said that things are going well with China, insisting US consumers are not paying for import taxes he has imposed on goods from that country although economists say Americans are footing the bill.
“Things are going along very well with China. They are paying us Tens of Billions of Dollars, made possible by their monetary devaluations and pumping in massive amounts of cash to keep their system going. So far our consumer is paying nothing – and no inflation. No help from Fed!” Trump said on Twitter.
He also said – without presenting evidence – that countries are asking to negotiate “REAL trade deals,” saying on Twitter, “They don’t want to be targeted for Tariffs by the US.”
Trump abruptly decided on Thursday to slap 10 per cent tariffs $300 billion in Chinese imports, stunning financial markets and ending a month-long trade truce. China vowed to fight back.
Tariffs are intended to make foreign goods more expensive to boost domestic producers, unless international exporters reduce prices. But there has been no evidence that China is cutting prices to accommodate Trump’s tariffs.
As a tense meeting with top advisers on China trade talks ended, Trump turned to trade adviser Robert Lighthizer and told him to call China to warn that new tariffs were coming, sources said.
Trump was frustrated by the failure to advance the trade agenda during the Shanghai talks, and had gathered his top advisers in the Oval Office to discuss how to proceed.
The sources said Trump asked Lighthizer to call Chinese trade envoy Liu He and give him a heads-up that the tariff announcement would be made.
Since it was around 1am in Beijing at the time, Lighthizer said it might be hard to get him on the phone. “If you can’t reach him, just leave a message,” Trump told him, according to a source.
Moments later, Trump announced his tariff decision via a series of tweets that rocked markets.
A study published by the National Bureau of Economic research in March found that all of the cost of tariffs imposed in 2018 were passed on to US consumers.
The latest tariffs would cost US households an average of $200 a year, some economists estimate, and would start to bite consumers and retailers just as the holiday shopping season begins.