According to a new study from the New York Federal Reserve, Chinese businesses have not lowered prices in a significant way when it comes to exports in response to President Trump’s trade wars, leaving Americans to absorb additional import taxes levied by the Trump administration, to the tune of around $40 billion per year.
“The continued stability of import prices for goods from China means US firms and consumers have to pay the tariff tax,” study authors Matthew Higgins, Thomas Klitgaard, and Michael Nattinger, wrote.
As Business Insider points out, the study’s findings contradict a claim made by Trump that foreign exporters are shouldering up to 25 percent of the costs — a claim the White House has continued to disseminate even after other studies have reached the same conclusion.
“China is paying us tremendous — and they’re paying for it,” The ignorant Trump said last week. “Those tariffs are not paid by us. Those tariffs are paid because they’re devaluing their currency and pouring cash into their economy.” (Ya right “stable genius”!)
According to the New York Fed, Chinese firms have “accepted the loss in competitiveness in the US market and have used the weaker currency to pad profits on each unit of sales.”