The revenues raised by President Trump’s tariffs on China are not even enough to cover the cost of bailing out farmers hit hardest by his trade war.
“We’ve taken in tens of billions of dollars in tariffs from China,” Trump told reporters Monday. He previously vowed that he would raise so much money from the tariffs that it would eliminate the entire national debt. But the New York Times reports that Customs and Border Protection data shows that the tariffs have raised about $20.8 billion in revenue. That is far less than the $28 billion in bailout funds that Trump vowed to give farmers after China imposed steep retaliatory tariffs targeting the agriculture industry. So far the administration has not offered any bailouts to other industries that have suffered sharp revenue losses in the ongoing trade war.
It’s also false to claim that revenue from the tariffs comes “from China,” since it is paid by American consumers. According to a study by the Federal Reserve Bank of New York, Columbia and Princeton Universities, Trump’s tariffs “were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers” with “no impact” on foreign exporters.
While American industries have seen falling profits and consumers have been forced to pay higher prices for countless products, the tariffs have certainly hit China as well, causing growth to fall to its lowest level in nearly three decades. Trump bragged about companies leaving China because of his tariffs on Monday.
“The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries,” Trump tweeted. “Thousands of companies are leaving.”
This is true, but despite Trump’s claims that the tariffs would cause companies to move manufacturing to the U.S., there is little evidence of that. Instead, The Wall Street Journal reports, U.S. manufacturers are simply moving their production to nearby Asian countries that haven’t been hit with Trump’s tariffs.
Apple is considering moving some of its assembly plants out of China, according to the report, and the makers of products like GoPro cameras, Crocs shoes, Roomba vacuum cleaners, Yeti beer coolers and Lovesac furniture have already done so. Instead of moving to the U.S., however, the companies moved their production to Vietnam, as well as India, Taiwan and Malaysia.
Imports from Vietnam are up 36 percent this year while imports from China are down 12 percent, according to the Journal, but there’s been no positive movement in the U.S. as manufacturing has fallen to the lowest level of Trump’s presidency.
As a result of companies moving production out of China, the tariff revenues Trump bragged about have also fallen. Trump claimed as a candidate that he would eliminate not just the federal deficit but the entire $22 trillion national debt “over a period of eight years” by imposing tariffs and renegotiating trade deals. Amid stalled trade talks with China, the White House released a report this week projecting that the deficit will hit $1 trillion this fiscal year. That’s the largest deficit since the Great Recession and the second-highest in U.S. history.