14 May 2019
How Trump Could Be Right About Tariffs
In his trade war with China, Trump could be right to say
that China will be paying for the 25% tariffs because China is a
quasi-totalitarian economic system. The Chinese government could subsidize private producers so they can lower their
delivered gross prices below those of U.S. or other competitors, despite the
tariff charge. In that case the effective result of
U.S. trade policy will be that China will have absorbed the cost of the
tariffs, and generated additional inflation in the Chinese economy. American consumers would not be paying more
for Chinese goods, and China would be paying the price
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