Falling Import Prices Show China Is Paying For Tariffs

Breitbart ^ | June 13, 2019 | John Carney

[House Atreides]

The prices of goods imported into the United States fell in May even as tariffs increased on goods from China.

...Imports from Asian countries outside of China also fell in price, dropping by 0.2 percent in May for a 1.4 percent decline compared with 12-months prior. This suggests that companies that have shifted production out of China are not paying higher prices, undermining one of the key assumptions behind claims that tariffs would drive up prices for U.S. consumers.

Inflation in the U.S. has fallen below the Federal Reserve’s target of two percent, indicating that consumers have not been squeezed by tariffs. A close examination of prices of tariffed goods show that tariffs are being absorbed by importers and middlemen rather than being passed on to consumers.

Falling import prices are likely to hold down inflation in the U.S., making it more likely that the Federal Reserve will have to cut rates to achieve its price stability target.

[central_va]

Well the greatness of tariffs is two fold. They also generate plenty of $$$$$$ for the US treasury reducing the income tax burden of the tax payer and reducing the federal deficit. win-win.

[semimojo]

They also generate plenty of $$$$$$ for the US treasury reducing the income tax burden of the tax payer and reducing the federal deficit. win-win.

So would a VAT or sales tax without having the government pick winning and losing industries.

[central_va]

Jeez, picking American industry over foreign industry is the proper role of government!!! A free trader in a world practicing cutthroat mercantilism is going to be a loser.

[COBOL2Java]

Hard evidence that the FR “free trade at any cost” cultists are wrong in their dire predictions as they clamor against Trump’s China tariffs.

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Yep. They're in a tizzy...

[central_va]

American workers and industry have been having their asses kicked by free traders that refuse to admit the rest of the world is never, ever going to stop practicing mercantilism. They can admit defeat and accept reality.

[House Atreides]

I’m in talks with an Ethiopian princess right now, if anybody cares. It will all be fine, I’m sure.
***********************************************
My post 41 was a failed attempt at humor which fell flat. I didn’t mean it literally.

Having said that, I’m in internet communication with the daughter of the extremely wealthy head of the Bank of Nigeria. She is desperate and needs my help getting a vast sum of money out of her country. The effort will require a substantial up-front financial investment on my part but, in the end, I’ll be reimbursed many time over. /sarc

[Future Snake Eater]

I still see them claiming our economy is dying b/c of these tariffs. It’s like it’s some kind of mass hallucination/hysteria or a religious belief. It’s really weird.

I like to ask them, “If tariffs are so terrible, then why isn’t China an economic wasteland?” I never get a response.

[semimojo]

Jeez, picking American industry over foreign industry is the proper role of government!!!

But picking US steel companies over US farmers isn't.

[gogeo]

Despite the idiocy of the socialists, statists and regulators-extraordinaire in this country, our free enterprise system simply cannot be beaten - and for sure not by some Johnnie-come-lately economy without the long-term traditions and institutions that are necessary to a growing and innovative economy.

Exactly so.

[WASCWatch]

The manufacturing of military goods is a burden on the economy in a macroeconomic sense. It may be required for security purposes, but it never contributes to the overall economic good for a nation; other than to those who make profits from it and those who work in those industries,

[Reily]

Military spending is like an insurance policy or even perhaps like spending for fire and police protection.
You need to spend it, but hope you don’t have to use it.

I disagree that it can’t contribute to the overall economic good. I agree it can’t make a direct immediate contribution. That’s why I use the fire, police & insurance analogy. However it can contribute in a secondary or tertiary way in spurring technological innovation. For example if the innovations are allowed into the economy, in a free society that happens. Also the experienced, trained engineers & scientists take their knowledge into the economy. (Nowadays few spend their entire careers in one job!)

[grumpygresh]

I think that the way the Chicoms think is that if the masses can make junk toys to send to the US, they might as well make missiles.
The Chicoms won’t just put the people on unemployment or welfare like in the US. They have a long tradition of slave and forced labor. Unlike a relative free market economy in the US the Chicoms can dictate labor costs.
I believe that the Chicoms look at their military as a means of creating a trade zone much like WW2 Japan. Do you think they would lose all that business to Vietnam? No they would start hassling them and sabre rattling at least as a means of increasing Vietnam and Far eastern Asian nations’ costs of doing business with the West.

[ThanhPhero]

;-)

[central_va]

I always ask name a country with a lower import tariff than the USA.

[gogeo]

I’m listening on YouTube to a politician who says socialized medicine will lower the cost of medical care.p

[unixfox]

I heard a report the other day that some Chinese companies had been replacing Made In China labels with Made In Vietnam labels. Sneaky bastards, can’t trust em that’s for sure.

[Sequoyah101]

Not at all.

[gleeaikin]

Thank you for expanding my understanding of production economics.

[mikeIII]

Yes - the last thing the Chicoms want is millions of displaced, irate Chinese. Apple alone employs some 3M Chinese in China. That’s one reason Tim Cook is confident Apple won’t be hit with Chinese tariffs in retaliation.

[OldNewYork]

Sounds legit.