-Source-Real Clear Politics-
Past administrations have called out China for violating the internationally agreed-upon rules of trade for decades.
After countless high-level talks, admonitions and appeals, China did nothing to change its cheating ways.
President Trump has dispensed with the talk and taken action, slapping tariffs on billions of dollars of goods China exports to the United States at artificially low prices.
Naysayers predicted the president’s tariffs would tank the stock market and drag down the economy. But the Dow is posting record gains, unemployment is at a 49-year low and the economy remains strong.
The forecasters are at a loss to explain why reality isn’t conforming to what they learned in school. A Wall Street economist tells Reuters, “It’s like we have nothing to fear, but we should.”
Critics also contend that President Trump’s tariffs will inevitably lead to higher prices for consumers. We’ve heard this before. They said aluminum tariffs would spike the cost of a six-pack. But soda and beer prices have remained flat.
Now Walmart has joined the chorus. But we have no more reason to believe officials there than other boys who cried wolf. To understand why, let’s review how tariffs work, and how specifically the president’s tariffs work.
First, the basics:
Tariffs aren’t imposed on the final retail price the way a sales tax is. They are also not imposed on the wholesale price. They are not even imposed on what the importer pays at the dock when the goods enter the U.S. The duties are imposed on an even lower price than that – and that’s a scandal in itself. Read more
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