President Donald Trump kicked Monday morning off with a series of tweets defending his new tariffs against China. His latest tactic is to urge Americans not to buy products from American companies if they manufacture in China.
The way tariffs work is that American businesses pay the fees for bringing in goods manufactured in China, which they then pass on to consumers. The president reasons, however, that Americans can easily avoid these increased costs.
Trump said there is “no reason” for U.S. consumers to pay the tariffs, before claiming that companies inside China would soon move to other countries. In the meantime, Trump said people should just buy products from inside the United States.
….completely avoided if you by 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
Tariffs can still have an impact on the cost of a product, even if you buy it from inside the United States.
And avoiding products manufactured in China could be a lot more challenging than Trump realizes. Countless American companies have factories in China that will be impacted by the broad list of targeted products. A variety of Trump-branded products are even manufactured in China and could be impacted.
As NBC News’ Jonathan Allen pointed out on Monday, Trump’s call not to buy from American companies paints U.S. farmers further into a corner. Already, they will likely bear the brunt of the tariffs, as China counters with its own tariffs on U.S. agricultural products like soy. But now they will face increased costs on the very machinery they need to operate their farms.
Wow! An American president just urged Americans to stop buying products from American companies like John Deere, Caterpillar and Ford. The argument is you should avoid the cost of tariffs by picking companies without facilities in China. But wow. Deere. Ford. Caterpillar
— Jonathan Allen (@jonallendc) May 13, 2019
Trump’s suggestion will also likely get in the way of his own plans to build a wall along the southern border. During his campaign, he insisted that the wall should be built exclusively with equipment manufactured by Caterpillar and John Deere.
In an interview Sunday, Trump’s top economic adviser Larry Kudlow admitted that it’s Americans who pay the cost of tariffs. Kudlow tried to insist that China will suffer losses as well, but he couldn’t substantiate that claim. Most economic researchers agree that American consumers will pay the cost of the tariffs in the higher prices of goods.
Kudlow promised there would be additional bailouts for the farmers who are ravaged by the trade war, but there is currently no relief in sight. The Trump administration announced an original $12 billion bailout for farmers last year, but it’s unclear that the funding has actually reached them. It’s likewise unclear whether more bailouts would compensate for the additional burdens they might now face purchasing the equipment they require to run their farms.
China, which had promised to retaliate against the tariffs, announced on Monday that it would impose tariffs on $60 billion in U.S. goods beginning June 1.