Analysis: Trump is taxing Americans to support farmers struggling from his trade war
Dave Sweeney in Alden, Iowa, in 2017. He and his wife, Annette, voted for President Trump. By Philip Bump Philip Bump National correspondent focused largely on the numbers behind politics Email Bio Follow May 14 at 3:23 PM To hear President Trump tell it, the calculus is simple.
The problems with that equation are twofold. First, China isn’t paying all of the tariffs and much of the increased cost is being incurred by American consumers. Second, we can look at the support being given to farmers in another light: Trump is taxing consumers to bolster farmers, a core part of his political base.
In other words, instead of getting Component X from China at price $P, the new cost of $P + tariff means that in some cases it makes sense to instead pay price $Q, where Q is higher than P but potentially less than P + tariff. That raises the cost of the final product, causing consumers to pay $1.4 billion more a month.
In total over that period, consumers will have paid $22.4 billion in tariff costs directly — taxes — and $21.6 billion in higher costs due to supply chain changes. It’s important to remember that farmers are central to Trump’s political rhetoric and a key part of his base. An October 2016 survey of producers conducted by Agri-Pulse found that two-thirds of respondents identified as Republican and that they supported Trump over Hillary Clinton by more than a 3-to-1 margin.
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