US President Donald Trump on Sunday defended his tariff policy, insisting again that China will pay billions in duties to the US, after Trump’s economic advisor raised eyebrows by saying both sides will suffer.
“We are right where we want to be with China,” Trump said on Twitter.
“Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China.”
In fact, research shows it is Americans that bear the brunt of the tariff impact, as the levies are paid by importers and ultimately passed on at least partially to consumers.
Trump’s comments came after economic advisor Larry Kudlow earlier Sunday conceded that China is not the one paying the tariffs.
“Fair enough. In fact, both sides will pay. Both sides will pay in these things,” Kudlow told “Fox News Sunday with Chris Wallace.”
Trump had accused Beijing of reneging on its commitments in trade talks and ordered new punitive duties, which took effect Friday, on $200 billion worth of Chinese imports, raising them to 25 percent from 10 percent.
He then ordered a tariff hike on almost all remaining imports from China, which are worth about $300 billion, according to US Trade Representative Robert Lighthizer.
“The Chinese will suffer GDP losses and so forth with respect to a diminishing export market and goods that they may need,” Kudlow said, before agreeing with Wallace that even though China may suffer consequences, US businesses and consumers are the ones who will pay the tariffs.
“Yes, to some extent. Yes, I don’t disagree with that. Again, both sides will suffer on this,” Kudlow said.
No new talks scheduled
But he also assured that because the US economy “is in a boom,” it would not be damaged “in any appreciable way” by the tariffs.
Trump ordered the increased duties on Friday after two days of talks to resolve the trade battle ended with no deal, although without a breakdown.
Trump began the standoff last year because of complaints about unfair Chinese trade practices. The United States is pressing China to change its policies on protections for intellectual property, as well as massive subsidies for state-owned firms, and to reduce the yawning trade deficit.
Since last year the US and China had exchanged tariffs on more than $360 billion worth of two-way trade, gutting US agricultural exports to China and weighing on both countries’ manufacturing sectors.
Kudlow told Wallace that Trump and China’s President Xi Jinping could meet next month on the sidelines of the G20 summit to discuss their differences on trade, but no new talks are scheduled.
While making it clear that the US was unwilling to settle, Kudlow sought to tamp down concerns, insisting the process was ongoing.
“We need to see something much clearer and until we do, we have to keep our tariffs on,” Kudlow said, adding: “We can’t accept any backtracking.”
As for future negotiations, while there are “no concrete, definite plans yet,” Kudlow said China had invited Treasury Secretary Steven Mnuchin and Lighthizer to Beijing — and higher-level discussions could be possible.
The chances of Trump and Xi meeting during the Group of 20 summit in Japan in late June “are probably pretty good,” he said.
The G20 summit of the world’s largest advanced and emerging economies is scheduled to take place in Osaka June 28-29.
“We have to change the trading relationship between two countries for the benefit of the United States and its workforce and its ranchers and farmers and so forth. We have to do this,” Kudlow said. “The relationship has been too unbalanced.”
Earlier Saturday Trump struck a more belligerent tone, urging China that it would be “wise for them to act now.”
“They know I am going to win… and the deal will become far worse for them if it has to be negotiated in my second term,” Trump tweeted.
While supporters laud Trump as a tough negotiator, free-trade-minded Republicans have warned that the tariffs could do real damage to the economy, and many farmers — including Trump supporters — say the tariffs have hit their bottom line.
Image: AFP/File / Jim WATSON US President Donald Trump (R) during a trade meeting with China’s Vice Premier Liu He (L) in the Oval Office at the White House in Washington, on April 4, 2019