- Fox News Sunday
- President Donald Trump’s top economics adviser, Larry Kudlow, said on Sunday that “both sides will suffer” in the escalating trade war between the US and China.
- The remarks contradict Trump’s claim that China will foot the bill for increased tariffs on $200 billion worth of Chinese goods imposed by the US on Friday.
- In a report last week, the consultancy firm Trade Partnership found that US consumers would be forced to spend up to $800 more a year on average for essential items as a result of the escalating trade war between Washington and Beijing.
- Trump was bullish about the trade battle with China in tweets Sunday, saying “we are right where we want to be.”
- Visit Business Insider’s homepage for more stories.
President Donald Trump’s top economic adviser, Larry Kudlow, said in an interview Sunday that the president’s escalating trade war with China would hurt US consumers.
The comment directly contradicts the president’s claims that only China will pay a price for the latest tariffs hike, which saw the US more than double the rate of tariffs on $200 billion worth of Chinese goods Friday following the breakdown of trade negotiations.
Speaking with the anchor Chris Wallace on “Fox News Sunday,” Kudlow said “both sides will suffer” in the trade dispute.
Wallace had questioned Kudlow about Trump’s claim that Chinese companies would pay the price of tariffs.
“In fact, both sides will pay,” Kudlow said. “Both sides will pay in these things.”
When Wallace put it to him that China wouldn’t foot the bill for tariffs on goods coming into the US, Kudlow said there would be a different economic cost for China.
— FoxNewsSunday (@FoxNewsSunday) May 12, 2019
“But the Chinese will suffer GDP losses and so forth with respect to a diminishing export market and goods that they may need for their own,” Kudlow said.
He went on to concede Wallace’s claim that the costs would be paid by US companies and US consumers.
“Yes, to some extent,” Kudlow said. “Yes, I don’t disagree with that. Again, both sides will suffer on this.”
Kudlow’s acknowledgment came after a report last week from Trade Partnership, a consultancy firm, said that American consumers on average could be forced to spend $800 a year more on everyday goods after the latest US action, which has raised tariff rates on $200 billion worth of Chinese goods to 25% from 10%.
Trump in a series of tweets Sunday was defiant, saying “we are right where we want to be with China.”
We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries…
— Donald J. Trump (@realDonaldTrump) May 12, 2019
“Remember, they broke the deal with us & tried to renegotiate,” Trump wrote in a Twitter post late Sunday.
“We will be taking in tens of billions of dollars in tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-tariffed countries.”
Carl Weinberg, the chief international economist at High Frequency Economics, said in a research note cited by the Associated Press that many of the goods affected by the increased tariffs were manufactured only in China, so US importers had little choice but to pay the tariffs, which function as taxes at the border.
“So if you need that new iPad, it is you who will be paying the import duty, not some worker in China,” Weinberg wrote.
According to reports, Republican advisers think there is political capital to me made out of taking a tough line with China as the 2020 presidential election looms.
Voters in Rust Belt states key to victory in 2020 are supportive of Trump’s China policies, and the president has accused his Democratic challengers as likely to fold to Chinese demands.