Kudlow contradicts Trump, says US will also take hit from China tariffs

White House economic adviser Larry Kudlow on Sunday contradicted President Trump by saying that U.S. consumers and businesses would also be hurt by the tariffs the administration is imposing on China.

Trump in arguing for tariffs has repeatedly argued that while they will hurt China and win a better deal for the United States, they will not cause pain to U.S. consumers.

But while being pressed by Fox News’s Chris Wallace, Kudlow acknowledged the trade fight will lead to pain on both sides.

Kudlow made the acknowledgement after Wallace pressed him on the fact that when China exports products hit by tariffs to the United States, it is the U.S. importer that pays the tariff.

{mosads}”It’s not China that pays tariffs. It’s the American importers, the American companies that pay what in effect is a tax increase and oftentimes passes it on to U.S. consumers,” Wallace said.

Chris talks to @larry_kudlow about who actually pays the tariffs with China if they were to be imposed #FNS pic.twitter.com/cwl89OyLDK

— FoxNewsSunday (@FoxNewsSunday) May 12, 2019

“Fair enough. In fact, both sides will pay in these things, and of course it depends,” Kudlow responded, with Wallace interjecting to point out that “if it’s a tariff on goods coming into the country, the Chinese aren’t paying.”

“No, but the Chinese will suffer [gross domestic product] losses and so forth with respect to a diminishing export market and goods that they may need,” Kudlow said. 

Wallace replied by noting that Trump has said China pays the tariffs.

“They may suffer consequences, but it’s U.S. businesses and U.S. consumers who pay, correct?” he asked. 

Kudlow responded by saying he didn’t disagree with that characterization, adding that both sides will suffer because of new tariffs. 

Trump said last week that his new round of tariffs on $200 billion worth of imports from China would benefit the U.S. The tariff hike came as China and the U.S. continue to negotiate a trade agreement. 

“Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Trump tweeted. 

New tariffs are not paid by the Chinese government but rather U.S. importers of impacted Chinese goods. Companies normally pass that cost on to consumers by raising prices, The Associated Press reported.

The tariffs do make the Chinese goods more expensive to sell, which can undercut Beijing’s sales to the United States.