A while back Lawrence Summers, an economic adviser to the past two Democratic presidents, joked that President Trump’s trade policies toward China and other nations amounted to: “Stop, or I’ll shoot myself in the foot.” Which is funny, but wrong. They actually amount to: “Stop, or I’ll shoot the American public in the foot.”
The tariffs Trump has imposed don’t hurt foreign producers anywhere near as much as they hurt American consumers. After all: A tariff is simply a sales tax on imported goods. Guess who pays sales taxes?
Even worse, those taxes are often hidden. More than half of the imports to the U.S. are manufacturing components or raw materials, used by U.S. companies to make other products. So the 25 percent tariffs Trump has slapped on steel from China and a few other countries raise the cost of making things with steel in America. A. Barton Hinkle explains more.
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