White House economic adviser Larry Kudlow acknowledged that the Chinese do not directly pay tariffs on goods coming into the US, but instead American importers pay and oftentimes pass it on to US consumers, contradicting Pres. Trump's claims. Kudlow said that "both sides will suffer on this," but argued that China will suffer significant GDP losses as export markets are hit. The blow to US GDP won't be substantial since the economy is "in terrific shape," he said.
Fox News pressed Kudlow about Trump's claims. "It's not China that pays tariffs," the Fox host said. "It's the American importers that pay what, in effect, is a tax increase and oftentimes pass it on to US consumers."
"Fair enough," Kudlow replied. "In fact, both sides will pay. Both sides will pay in these things." Kudlow added, however, that China doesn't actually pay the tariffs, but that their GDP will suffer "with respect to a diminishing export market. This is a risk we should and can take without damaging our economy in any appreciable way."
"When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so... We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN," Trump wrote in a December 2018 tweet.
Trump is misstating how tariffs work. Tariffs are a fee charged by the U.S. when a good is brought into the U.S. They're designed to make foreign made goods more expensive--thus boosting domestic producers--but that expense, charged to the importer, is typically passed down to American consumers.
"People have no idea how badly our country has been treated by other countries," Trump said. "They've destroyed the steel industry, they've destroyed the aluminum industry, and other industries, frankly."
Trump railed against the North American Free Trade Agreement and the nation's trading partners throughout his campaign. Speaking at the shuttered Osram Sylvania factory in Manchester NH in June 2016, he said, "New Hampshire has lost 31 percent of their manufacturing jobs since NAFTA," which went into effect in 1994, when Bill Clinton was president, Trump said. He called the creation of the World Trade Organization in 1995 "another Clinton disaster."
"This is the policy that ensures no one gets left behind in America anymore--that we protect our industry from unfair competition, favor the products produced by our fellow citizens and make certain that when jobs open those jobs are given to American workers first," the White House said in a statement.
It was not immediately clear how much the administration could accomplish without cooperation from Congress. However, industry experts said Trump's executive order was a good first step to protecting the U.S. defense industrial base, and U.S. firms that do business with the federal government.
The president will also order a review of existing federal procurement policies. These are statutes and rules instituted over the decades that may bar foreign contractors from bidding for jobs, exclude certain raw materials from abroad, or mandate that international firms deliver projects at reduced prices relative to American firms in order to win contracts.
The administration will also review exceptions to these policies granted under free-trade agreements and the World Trade Organization. While these agreements are designed to give U.S. firms access to foreign governments' contracts in exchange for allowing firms from abroad to bid on federal projects, a senior administration official argued that U.S. bids are treated unfairly overseas.
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2020 Presidential contenders on Free Trade: | |||
Democrats running for President:
Sen.Michael Bennet (D-CO) V.P.Joe Biden (D-DE) Mayor Mike Bloomberg (I-NYC) Gov.Steve Bullock (D-MT) Mayor Pete Buttigieg (D-IN) Sen.Cory Booker (D-NJ) Secy.Julian Castro (D-TX) Gov.Lincoln Chafee (L-RI) Rep.John Delaney (D-MD) Rep.Tulsi Gabbard (D-HI) Sen.Amy Klobuchar (D-MN) Gov.Deval Patrick (D-MA) Sen.Bernie Sanders (I-VT) CEO Tom Steyer (D-CA) Sen.Elizabeth Warren (D-MA) Marianne Williamson (D-CA) CEO Andrew Yang (D-NY) 2020 Third Party Candidates: Rep.Justin Amash (L-MI) CEO Don Blankenship (C-WV) Gov.Lincoln Chafee (L-RI) Howie Hawkins (G-NY) Gov.Jesse Ventura (I-MN) |
Republicans running for President:
V.P.Mike Pence(R-IN) Pres.Donald Trump(R-NY) Rep.Joe Walsh (R-IL) Gov.Bill Weld(R-MA & L-NY) 2020 Withdrawn Democratic Candidates: Sen.Stacey Abrams (D-GA) Mayor Bill de Blasio (D-NYC) Sen.Kirsten Gillibrand (D-NY) Sen.Mike Gravel (D-AK) Sen.Kamala Harris (D-CA) Gov.John Hickenlooper (D-CO) Gov.Jay Inslee (D-WA) Mayor Wayne Messam (D-FL) Rep.Seth Moulton (D-MA) Rep.Beto O`Rourke (D-TX) Rep.Tim Ryan (D-CA) Adm.Joe Sestak (D-PA) Rep.Eric Swalwell (D-CA) | ||
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