Contradicting President Trump’s Tweet, White House advisers have confirmed that the tariff imposed on Chinese goods will eventually be suffered by the US business and consumers.
Larry Kudlow, the head of the president’s National Economic Council admitted in a TV show that it’s not only China who will pay. He added that China will suffer from decreased exports and not from the increased tariff. Ultimately both sides will be affected.
Trump’s expected inflow of wealth to the US from China, by the said tariffs, has been opposed by the economists.
Many US importers have fewer options available as the required Chinese goods are not manufactured anywhere else. Imposing those tariffs would impact a wide range of consumer goods like clothes, shoes, toys, and electronics such as iPhones, that have been mostly exempted so far and could prompt steep cost increases that many Americans would likely notice.
Kudlow claimed that the imposed tariff would just cut the economic growth by a modest 0.2%, whereas impact is expected to be much larger as per the independent economists. Gregory Daco, an economist at Oxford Economics, estimates it would reduce U.S. growth by a half percentage point and cost 300,000 jobs.
The US has raised duties on $200 billion of Chinese imports to 25% from 10%, after charging China of backtracking on commitments earlier made. The administration has already hit $50 billion of additional Chinese goods with 25% duties. Trump has also threatened to impose import taxes on the remaining $300 billion in Chinese imports, a step that Kudlow estimated would take several months to implement.