Donald Trump Finally Admits Americans Pay His Tariffs After All
Amid trade tensions with China that remain high, President Trump has felt the need to assuage concerns about the potential consequences of this tension with the U.S.'s largest trade partner. In a Tweet late last week, the President declared, “Our Great Farmers know how important it is to win on Trade. They will be the big winners!”
Despite this proclamation, the mask seems to be slipping more and more on this foolish trade war in which America now finds itself. Sen. Rick Scott (R-Fla.) introduced a proposal recently to use the tariff revenue to pay for additional tax cuts. This is a tacit admission that the tariffs are being paid for by American consumers and not, as the President declares, the Chinese government.
The administration then announced it would delay the onset of the latest round of proposed tariffs, which were set to go into effect September 1, to December 15th. The administration said it did not want to adversely impact the Christmas shopping season. Which is odd, considering the administration’s insistence that it is China paying the tariffs. Why would that impact Christmas shopping in America? It becomes less odd when you realize that tariffs are merely taxes on Americans who consume foreign made goods. The administration knows this, but hopes you won’t bother to figure it out on your own.
This brings us now to farmers, the supposed “big winners” of this trade dispute with China. China is one of the top 5 global consumers of U.S. agricultural commodities, even in the midst of the current trade dispute. The Chinese government has now asked state-owned companies to stop buying U.S. agricultural goods as a retaliatory measure to the Trump administration’s actions. In no sense are farmers the victors in this situation.
President Trump and administration officials know this as well. The U.S. Department of Agriculture (USDA) has issued billions in aid to farmers called “Market Facilitation Payments,” a laughable name if there ever was one for what is essentially bailout money. Let’s set aside, for a moment, the fact that these aid payments are disproportionately going towards large, wealthy farms and agri-businesses based in major metropolitan areas, as opposed to small farms in rural America. Industries that are “big winners” do not require billions in bailout money. If farmers are benefiting from the Trump trade agenda, why do they require so much aid?
Apparently, the billions that have already been handed out are insufficient. USDA Secretary Sonny Perdue announced just recently that another round of “Market Facilitation Payments” will be made very soon. Farmers are calling out these payments as insufficient to repair the damage done by the administration’s tariffs. Dave Preisler, the CEO of Minnesota Pork, said, “We're losing more in the marketplace than what we're going to end up with these the Market Facilitation Program payments.”
Perhaps when President Trump says, “Our Great Farmers know how important it is to win on Trade,” he means that they’re beginning to realize how important it is to abandon the current strategy. Gary Wertish, the President of the Minnesota Farmers Union said, “We just don't feel he [President Trump] took the right approach. The tariffs are just backfiring and you know it's really detrimental to the farm economy.”
All of this really highlights the large chasm between what the Trump administration says on trade and what it does. The administration and its allies will say how great things are going, but at the same time take actions clearly aimed to alleviate the suffering the tariffs have caused. It’s almost a form of propaganda used to obscure the obvious flaws in the administration’s interventionist economic agenda.
Such is the case with Trump’s rhetoric on trade and that of his supporters both in and out of government. Being “tough on China” has become some sort of bizarre virtue signal to gain entry into a new era of Cold Warriors. They liken China to the former Soviet Union and clearly fancy themselves as new Reagans because of it. Yet China is once again our largest trading partner in the world. The USSR never came close. China is a massive market for U.S. goods and vice versa. What possible reason could there be for anyone who claims to be “America First” to puff out their chest and try to inflict economic damage on the Chinese?
In that same vein, those same folks will tout their “America First” trade policies in populistic rants about blue collar American workers. Yet, it is small farmers across the country who are suffering most. They have lost a major buyer of their goods and, according to USDA data, the money meant to hold them over has been directed to wealthy businesses and lobbying operations in large cities. America’s farmers and ranchers want to be left alone by the government. Yet, people like Trump will cynically use them as pawns to settle his own grudges abroad while letting them bear the brunt of the blowback.
The late writer and politician Harry Browne used to say, “The government is good at one thing. It knows how to break your legs, hand you a crutch, and say, ‘See? If it weren’t for the government, you wouldn’t be able to walk.’” A truly “America First” trade policy would leave the power in the hands of American farmers and businesses, instead of wannabe central planners like Donald Trump and Peter Navarro.
