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China Is Calling Trump’s Bluff on His Trade War, and We’re All Going to Literally Pay For It

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The Dow opened down 500+ points today, and normally the byzantine movements of the stock market are nothing to report about, but there is a clear cause for this dive: Trump’s trade war with China. He’s losing it. After he decided to more than double tariffs on $200 billion worth of Chinese imports, China announced $60 billion in new tariffs on U.S. goods today. This matters to you and me because we are ultimately the ones who will wind up paying these additional taxes imposed by both sides in this economic dick-measuring contest—Trump voters especially.

On yesterday’s Fox News Sunday, Trump’s National Economic Council Director, Larry Kudlow, was interviewed by Chris Wallace. Wallace correctly said that “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,” and Trump’s top economic advisor responded with “Fair enough. In fact, both sides will pay. Both sides will pay in these things.”

This basic reality—that tariffs are a mutually assured form of destruction, like nuclear weapons—is even understood by the dim-witted Larry Kudlow. And yet, this basic economic notion that one can learn standing just within earshot of an economics 101 lecture, has still escaped President Tweets.

...completely avoided if you buy from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!...— Donald J. Trump (@realDonaldTrump) May 13, 2019

..There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!— Donald J. Trump (@realDonaldTrump) May 13, 2019

While Trump bloviates in public about how adding a massive tax to the cost of things like aluminum and steel won't hurt the American consumer because apparently this is the only instance in the history of capitalism where a cost was not passed down to the consumer, in private, he reportedly strikes a much different tone. In short, Trump sees our suffering as his benefit. Per the New York Times:

For months, the prospect of a landmark trade agreement with China has tantalized Mr. Trump. But now, according to analysts and several former aides, his political calculus seems to have flipped. His recent statements suggest he now believes that demonstrating his toughness with the Chinese and walking away from a deal might well put him in a better position politically than signing one.

Imposing new tariffs on China is likely to hurt American farmers, rattle the stock market and possibly damage the economy. But signing an agreement could expose Mr. Trump to attacks by Democrats, particularly if it is perceived as weak. A hard line, on the other hand, would allow the president to cater to his political base while heading off any Democratic attempts to outflank him as the great protector of American workers.

“The days of being soft on China are over,” said Stephen K. Bannon, the former White House chief strategist for Mr. Trump, who shaped the economic message of his 2016 campaign and has warned repeatedly about the dangers posed by China. “Politics now drives the economics.”

So according to the president, trade wars are easy to win and tariffs don't hurt Americans, but even if they do hurt Americans, that's a good thing because “being soft” on China (whatever that means) makes Trump look worse. The sad thing is that he may be right. The Republicans have created such a robust propaganda network that Trump could take a dump on your living room floor, and he'd have dutiful lap dogs like Senator Tom Cotton immediately rush in to tell you why it's actually a good thing that your house now smells like the inside of President Big Mac's colon.

"There will be some sacrifice on the part of Americans, I grant you that. But also that sacrifice is pretty minimal compared to the sacrifices that our soldiers make overseas that are fallen heroes or laid to rest," @SenTomCotton on trade war with China pic.twitter.com/lqlEZtaeBs— CBS This Morning (@CBSThisMorning) May 13, 2019

Know who does think that Trump's tariffs are raising prices on consumers? A company dedicated to sucking every last cent that they can out of the economy. This isn't up for debate. This is basic economics.

Goldman Sachs has a simple retort to all those who say Trump's tariffs aren't causing consumer prices to go up… pic.twitter.com/PIVmLoUzSx— Shawn Donnan (@sdonnan) May 13, 2019

If you’re a Trump voter, which matters more to you? Being “tough” on China, or not paying a 25% and 10% surcharge on items made of steel and aluminum? If it’s the former, read this quote from Laura Baughman, president of The Trade Partnership, about their study done on tariffs and please tell me why you would still support a president who so clearly does not represent your interests:

”If 25% duties are eventually imposed on all China goods, and then you consider a Chinese retaliation, we estimate it would result in over 2 million jobs lost in the U.S. over the next one to three years.”

Chinese goods come into the country, and the United States adds an additional tax on top of it. While the United States government does make money off that tariff, companies adjust their prices to account for it, meaning that consumers ultimately are the ones cutting checks to the Department of the Treasury. It’s no different than the normal machinations of capitalism. This is an additional cost placed upon businesses by the Trump Administration—an additional cost that gets passed down to the consumer—and the nature of tariffs hurt small businesses the most since they have the least room for error. According to reports, even Trump understands this—he’s just banking his re-election chances on the hope that enough Americans won’t see through his BS and help him work against their own best interests. Given how well that worked last time, it’s difficult to strategically criticize this cynically cruel political game plan that may wind up destroying the economy in order to get Trump re-elected.

Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.

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