If you know even a single thing about trade, you already know that American businesses and consumers are paying for Trump's tariffs, not China or Chinese companies, but the Federal Reserve of New York is here to remind us that Americans are paying for it.
The local Federal Reserve branch took a look at import prices to see if Chinese companies lowered their prices to compensate for the tariffs and found that imports to the United States have not declined in price any more than they have in other countries.
Instead, the prices Chinese firms charge have barely budged, meaning U.S. companies and consumers are paying the tariff costs, estimated at around $40 billion annually, New York Fed Reserve Bank researchers found in a study released on Monday. [...]
Import data from June 2018 to September 2019 shows Chinese import prices fell only 2%, the Fed study found, in line with price declines seen in many other nations as global trade slowed.
“The continued stability of import prices for goods from China means U.S. firms and consumers have to pay the tariff,” the Fed research team wrote.
Trump's stealth tax on American consumers is costing us at least $40 billion per year.
What exactly is that money being used for?
As we've discussed here before, Trump's tariffs are flowing into the U.S. Treasury where they're making the federal deficit look slightly better than it really is. The deficit for fiscal 2019 only weighed in slightly below a trillion dollars because Trump's unilateral stealth tax on Americans trimmed it.
We're all going to have to pay for our trillion dollar deficit at some point, but Trump's taxes (tariffs) weren't approved by Congress and are based on legally dubious declarations that Chinese-made toys, shoes, and baby cribs pose a threat to our national security.
Are we great yet?