Tariffs have been draining US coffers: experts

Xinhua
Experts at the US Council on Foreign Relations have said that Americans instead of the Chinese are bearing the burden of additional US tariffs on foreign goods.
Xinhua

Experts at the US Council on Foreign Relations have said that Americans instead of the Chinese are bearing the burden of additional US tariffs on foreign goods, and these tariffs have been draining US coffers instead of filling them.

In an opinion piece published on the Washington Post Tuesday, Benn Steil, director of international economics at the CFR, and Benjamin Della Rocca, an analyst at the CFR, refuted US President Donald Trump's argument that trade wars are good and "easy to win," arguing that they are in fact "difficult" and "costly."

The two experts said that tariffs are taxes on imports, which means they are paid by importers instead of exporters.

White House trade adviser Peter Navarro has explained that China bears most of the burden of the tariffs by lowering its export prices to offset them, but the experts disputed the claim, saying that tariffs last year raised the import costs of Chinese goods roughly 6 percent on average, but the pre-tariff prices of imported Chinese goods has fallen barely 1 percent, citing an aggregate index published by the US Bureau Labor Statistics.

In regard to the US president's claim that China tariffs are bringing in "hundreds of billions" of US dollars, the two experts said it was also a "false" statement.

Government data show that the total estimated revenue as of May would be about US$20 billion and the US administration's China tariffs only brought in US$8 billion in 2018, "a small fraction of what the president asserts," they said, not to mention that Trump till now has authorized over US$25 billion compensation to US farmers for their losses from China's retaliatory measures.

Far from filling US coffers, the hiked tariffs have been draining them "at an accelerating pace," the CFR experts said.

Fred Bergsten, senior fellow and director emeritus at the Peterson Institute for International Economics, said that the government has clearly abused congressional intent and arguably some of its legislative authorities in implementing current trade policies.

"Congress should act urgently to rein in the excesses of the Executive Branch," he said at a recent Congressional hearing.

US industry associations and business representatives have expressed the hope for the United States and China to settle their trade disputes in the near future so as to bring bilateral trade back onto the normal track, urging removal of additional tariffs imposed over the past few months.

"Our hope is that this gets resolved quickly and there will be a plan of action to reduce and ultimately eliminate all the tariffs that have been put into place on both sides, because that's the only way that we can get back to anything that resembles a normal trade between the United States and China," Erin Ennis, senior vice president of the US-China Business Council, told Xinhua recently.

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