National Economic Council Director Larry Kudlow acknowledged Sunday that American consumers end up paying for the Trump administration’s tariffs on Chinese imports, contradicting President Trump’s repeated false claim that China is paying for the tariffs.
Kudlow made the comments after Fox News anchor Chris Wallace repeatedly pressed him on “Fox News Sunday” about Trump’s recent comments about trade with China.
“It’s not China that pays tariffs. It’s the American importers, the American companies that pay what in effect is a tax increase and oftentimes passes it on to U.S. consumers,” Wallace said.
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“Fair enough. In fact, both sides will pay in these things, and of course it depends,” Kudlow responded.
Wallace noted that “if it’s a tariff on goods coming into the country, the Chinese aren’t paying.”
“No, but the Chinese will suffer [gross domestic product] losses and so forth with respect to a diminishing export market and goods that they may need,” Kudlow said.
Wallace replied by noting that Trump has said China pays the tariffs.
“They may suffer consequences, but it’s U.S. businesses and U.S. consumers who pay, correct?” he asked.
“Fair enough,” Kudlow replied. “In fact, both sides will pay. Both sides will pay in these things.”
Trump said last week that his new round of tariffs on $200 billion worth of imports from China would benefit the U.S.
“Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Trump tweeted.
New tariffs are not paid by the Chinese government but rather U.S. importers of impacted Chinese goods. Companies normally pass that cost on to consumers by raising prices, The Associated Press reported.