On Wednesday, Politico reported that President Donald Trump's tariffs are worsening the economic downturn caused by the coronavirus pandemic.
"Amid the worst recession in nearly a century, a wide range of U.S. businesses hit by President Donald Trump’s tariffs are starting to face an increasingly stark juggling act of trying to keep employees on the payroll while paying staggering tariff bills, some as high as 25 percent," wrote Adam Behsudi. "Every month, Kevin Feig sends the Treasury roughly $300,000 in tariffs to import auto parts that he supplies to national retail chains. He said his tariff bill matches his monthly payroll expenses for the 110 workers he is hoping to keep employed through a federally backed loan from the government’s new Paycheck Protection Program."
"U.S. retailers in March reported the biggest one-month plunge in the nearly three decades data has been kept on retail sales, according to Commerce Department data released Wednesday," continued the report. "The plummeting demand, which is expected to carry into this month and beyond, has reverberated down the supply chain. For many companies that rely on consumer foot traffic, it means less cash on hand to pay wages, rent and invoices on inventory ordered long before the pandemic was on anyone’s radar."
In other words, even if fewer people are buying their products, companies still have to pay tariffs on inventory they ordered months ago before the downturn was evident.
"Trump has rejected efforts to relax punitive tariffs that have hit roughly $360 billion worth of goods from China, imports of steel and aluminum, foreign-made washing machines and other goods that have been caught up in his trade offensive," said the report. "But he did sign off on a proposal presented to him during a White House meeting two weeks ago that would have temporarily suspended payments on a separate set of long-standing tariffs that cover roughly 50 percent of U.S. imports, said people familiar with the plan."
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