Christmas Miracle: Trump Admits His Trade War Is Based on Lies – By Bess Levin (Vanity Fair) / Aug 13 2019
He’s delaying new tariffs just in case they’d “have an impact on U.S. customers.”
For more than a year now, Donald Trump has claimed that his economy-dinging trade war is a great development for the country because of all the money “China” is paying the U.S. Treasury. “I am a Tariff Man,” he tweeted last December. “We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.” In May, after escalating the dispute with Beijing by raising tariffs on $200 billion of Chinese imports from 10% to 25%, he insisted, “Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S.” In July he screeched, “We are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!” A month later it was: “Massive amounts of money from China and other parts of the world is pouring into the United States for reasons of safety, investment, and interest rates! We are in a very strong position.… A beautiful thing to watch!”
Of course, as everyone outside of the Oval Office and his most blindly loyal followers know, tariffs are not paid for by China but by U.S. companies. If those companies manage to stay in business at all, the costs are then passed on to American consumers, a giant point of clarification that’s been noted by economists, analysts, and the media, and which was conceded by National Economic Council director Larry Kudlow in May. And on Tuesday the president himself admitted it!
Speaking to reporters before leaving his New Jersey golf course, Trump explained the reason the administration decided to wait until December 15 to impose new tariffs on goods like cell phones, laptops, video game consoles, shoes, and other consumer products. “We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers,” he said, adding that “so far they’ve had virtually none.” Indeed, the new tariffs would have had a big impact on consumers, with Webush Securities estimating the cost of an iPhone would have increased by between $75 and $100. “I think the president wanted to avoid being the Grinch who stole Christmas,” said Mark Zandi, chief economist of Moody’s Analytics. “These delayed tariff hikes would have landed squarely on American consumers.”
Of course, despite literally coming right out and saying the tariffs would hurt the U.S., Trump will obviously never admit such a thing, nor will he admit that his ongoing trade war has pushed the manufacturing industry to the brink of recession, or that farmers have been royally fucked, or that stocks had their worst day of the year earlier this month because of him. That’s why despite the temporary delay, the tariffs will most likely go into effect on December 15, barring some sort of come-to-Jesus moment. Better get your shopping done now!
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Speaking of which…
The financial-services industry sees the chances of a Trump-induced recession rising:
Wall Street is getting seriously gloomy about the economy, with recession warnings mounting and stock market volatility rising just as President Donald Trump prepares to fire up his re-election campaign machine.… The collective wisdom now spreading across Wall Street is that no trade deal will be struck with China before the 2020 election; business investment will continue to sag; and a series of interest-rate cuts from the Federal Reserve won’t be enough to juice more growth out of an economy now in its 10th year of expansion—the longest stretch in American history.
“It makes sense for everyone to be downgrading, because everyone assumed we’d have some kind of trade deal with China by now and we don’t,” said Megan Greene, an economist and senior fellow at Harvard’s Kennedy School of Government.
“And now we have the risk of the trade war turning into a currency war,” she said. “The consumer is still pretty strong, but business investment looks really bad and if it was going to pick up again it would have by now.”
In a note sent to clients over the weekend, Goldman Sachs economists wrote, “Fears that the trade war will trigger a recession are growing. We expect tariffs targeting the remaining $300 billion of U.S. imports from China to go into effect and no longer expect a trade deal before the 2020 election.”