Who pays tariffs on imported goods: China or U.S. customers?
- President Trump again falsely said in a tweet on Monday that China pays tariffs. The fact is, companies here pay tariffs to U.S. Customs and Border Protection when Chinese goods reach America's shores.
- U.S. aid promised to American farmers hurt by trade wars so far has cost more than the tariffs collected on Chinese imports.
- The latest proposed tariffs on incoming Chinese goods are expected to hit consumers more than previous rounds did.
President Trump is again touting tariffs on imported Chinese goods as a way to benefit Americans and help win his trade war.
"Based on the historic currency manipulation by China, it is now even more obvious to everyone that Americans are not paying for the Tariffs – they are being paid for compliments of China, and the U.S. is taking in tens of Billions of Dollars!" Mr. Trump tweeted in part on Monday.
Yet China isn't paying the tariffs. The duties are paid for by U.S. importers, from companies like Ford or Walmart and small businesses that need the goods to manufacture products or stock shelves. They eventually swallow that cost or pass it along to consumers.
"It is the U.S. importer that pays that tax that goes to the U.S. treasury, it's not the Chinese, it's not anybody else," Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, told CBS MoneyWatch.
$22 billion collected from U.S. importers
As of July 24, the U.S. has collected more than $22 billion in tariffs from companies importing goods from China since the White House last year began imposing them under what's known as Section 301 of a 1974 trade law. That might seem like a lot, but it's only about 0.1% of the roughly $20 trillion U.S. economy, still the world's largest.
Still. that's less than the $28 billion in combined aid Mr. Trump has promised -- and begun dispatching -- to farmers whose sales to the country have been crippled or blocked. That includes $12 billion announced last year and $16 billion announced in May.
Recent research suggests that for Chinese imports subject to tariffs so far, American consumers and businesses are taking the biggest hit in the form of higher prices and costs. In May, a study from the Federal Reserve found that tariffs in effect could cost the average family $831 a year.
Toys, smartphones, food and clothing
Businesses importing goods from China are paying roughly 18% in tariffs compared to 3.1% at the end of 2017, according to a recent analysis from Chad Bown at the Peterson Institute for International Economics.
Unhappy with the most recent round of negotiations in China, Mr. Trump issued a surprise threat Thursday to impose a 10% tax on $300 billion in Chinese imports. This time, the list of goods will hit consumers more directly than previous rounds, economists, retailers and other experts have said.
That's because products include toys, shoes, consumer electronics, smartphones, food and clothing,
The U.S. Trade Representative (USTR) has yet to issue specific parameters for the new tariffs, which Mr. Trump could either rescind and not implement or raise to 25% as originally proposed.
-- Aimee Picchi contributed to this report.