‘Experts’ wrong again: Trump tariffs have no
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Posted On: 06/16/2019 12:46:23 PM
‘Experts’ wrong again:
Trump tariffs have not penalized American consumers
By Thomas Lifson < >
Ever since President Trump started using tariffs as a strategic weapon in restructuring our position in world trade from losing jobs, industries, and whole regions to one of strength across the board including a viable manufacturing sector, our elites discovered a brand new concern for working class Americans. Those “people of Walmart” they normally scorn are doing to be penalized by skyrocketing prices for clothes, appliances , and other consumables because of Trumps tariffs.
Economic theory is great in the abstract, using unassailable logic and fundamental principles grounded in reality. But human beings and their collectivities are complex, and often intervene in the economic sphere for reasons unrelated to the logic of economics.
Thus, the almost universal establishment criticism of President Trump’s use of tariffs to force those who exploit us with high tariff and nontariff barriers to our exports into a more reciprocal relationship. His stated goal of moving toward a world in which tariffs are not necessary is widely ignored, and his choice of tariffs as a strategic tool is castigated “protectionism” and worse.
And we’re going to suffer, because Orange Man Bad.
Except that we’re not suffering, and the data show that simple (-minded) economics predictions have proven false. Import prices have declined, not risen. Sundance at Conservative Tree House writes:
The latest set of statistics from the Bureau of Economic Analysis (BEA) shows all of the professional pundit claims of higher prices on imported goods due to Trump tariffs are simply disconnected from reality. In actuality the year-over-year prices of import products are actually dropping:
(source)
U.S. Import prices fell 0.3 percent in May, the first monthly decline since a 1.4-percent drop in December. Import prices advanced 1.8 percent from December to April before the downturn in May. The price index for overall imports decreased 1.5 percent over the past 12 months, matching the drop in January. These were the largest over-the-year declines since the index fell 2.2 percent in August 2016. (See table 1.)
Part of the explanation for this is that China is forced to subsidize exporters in order to maintain employment. Most journalists and academics fail to understand the vulnerability of the Communist regime in China to popular unrest. There are tens of thousands of incidents a year of popular revolt against officials, news of which rarely leaves China. The sole reason that people put up with an autocratic and corrupt political-economic system is that it has delivered increasing levels of prosperity. If that prosperity falters or crashes, watch out.
A second explanation for the powered prices for imports is the lower energy prices that the US oil production boom has provided. That is a weapon that President Trump can take a bow for – by unleashing the incredible productive capacity of our energy industry once the government hobbles are removed. Our elites are insufficiently aware of the contribution it makes to our welfare and strategic strength. They think that Silicon Valley is the sole definition of American technological leadership. They’re wrong. The oil and gas industry is at least its equal.
And thus, for reasons that eluded the academics and globalist elites but which apparently Donald Trump had some grasp of, the price for his tariffs is being paid by China and oil exporting countries, not US consumers
Trump tariffs have not penalized American consumers
By Thomas Lifson < >
Ever since President Trump started using tariffs as a strategic weapon in restructuring our position in world trade from losing jobs, industries, and whole regions to one of strength across the board including a viable manufacturing sector, our elites discovered a brand new concern for working class Americans. Those “people of Walmart” they normally scorn are doing to be penalized by skyrocketing prices for clothes, appliances , and other consumables because of Trumps tariffs.
Economic theory is great in the abstract, using unassailable logic and fundamental principles grounded in reality. But human beings and their collectivities are complex, and often intervene in the economic sphere for reasons unrelated to the logic of economics.
Thus, the almost universal establishment criticism of President Trump’s use of tariffs to force those who exploit us with high tariff and nontariff barriers to our exports into a more reciprocal relationship. His stated goal of moving toward a world in which tariffs are not necessary is widely ignored, and his choice of tariffs as a strategic tool is castigated “protectionism” and worse.
And we’re going to suffer, because Orange Man Bad.
Except that we’re not suffering, and the data show that simple (-minded) economics predictions have proven false. Import prices have declined, not risen. Sundance at Conservative Tree House writes:
The latest set of statistics from the Bureau of Economic Analysis (BEA) shows all of the professional pundit claims of higher prices on imported goods due to Trump tariffs are simply disconnected from reality. In actuality the year-over-year prices of import products are actually dropping:
(source)
U.S. Import prices fell 0.3 percent in May, the first monthly decline since a 1.4-percent drop in December. Import prices advanced 1.8 percent from December to April before the downturn in May. The price index for overall imports decreased 1.5 percent over the past 12 months, matching the drop in January. These were the largest over-the-year declines since the index fell 2.2 percent in August 2016. (See table 1.)
Part of the explanation for this is that China is forced to subsidize exporters in order to maintain employment. Most journalists and academics fail to understand the vulnerability of the Communist regime in China to popular unrest. There are tens of thousands of incidents a year of popular revolt against officials, news of which rarely leaves China. The sole reason that people put up with an autocratic and corrupt political-economic system is that it has delivered increasing levels of prosperity. If that prosperity falters or crashes, watch out.
A second explanation for the powered prices for imports is the lower energy prices that the US oil production boom has provided. That is a weapon that President Trump can take a bow for – by unleashing the incredible productive capacity of our energy industry once the government hobbles are removed. Our elites are insufficiently aware of the contribution it makes to our welfare and strategic strength. They think that Silicon Valley is the sole definition of American technological leadership. They’re wrong. The oil and gas industry is at least its equal.
And thus, for reasons that eluded the academics and globalist elites but which apparently Donald Trump had some grasp of, the price for his tariffs is being paid by China and oil exporting countries, not US consumers
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