Undoubtedly, there is plenty of good economic news. The jobs report issued last week by the Labor Department showed strong growth and an unemployment rate of 3.6 percent — the lowest in 50 years.
While we frequently issue reminders that presidents do not deserve all the credit — or the blame — for economic trends, President Donald Trump’s policies have been effective. There are some caveats — notably, a soaring national debt that continues to be ignored in Washington, D.C. — but the most important thing is to shepherd an economy that creates jobs, and the Trump administration has done that.
That being said, we continue to worry about the president’s affection for tariffs and the long-term impact they will have on the growing economy. On Sunday, Trump took to Twitter and threatened to hike tariffs on $200 billion worth of Chinese goods. This came as a Chinese delegation is planning to resume talks aimed at resolving a trade war that has shaken financial markets and cast a pall over the global economy. Trump said he would raise import taxes on Chinese products from 10 percent to 25 percent at the end of this week.
Trump claims that Chinese manufacturers are paying for tariffs. In truth, American consumers foot the bill through higher prices. As Jacob Kirkegaard of the Peterson Institute for International Economics explained to NBC News: “His assertion generally that the Chinese are paying these tariffs is just simply nonsense. It’s a complete misunderstanding of how tariffs work, because tariffs are paid by the importing company and those companies are overwhelmingly American. Ultimately, that means this is a tax paid by the American consumers.”
In March, a study led by the Federal Reserve Bank of New York estimated that tariffs are reducing U.S. income by about $1.4 billion a month.