Who Pays The Tariffs Placed on Chinese Products?
President Trump has stated that since the first round of Tariffs were implemented that ton’s of money has poured into the Treasury and that with the next round ton’s more will pour in. . . even thou he is factually correct, do you know where that money comes from?
The simple fact is, Chinese companies do “not” pay a penny of that money. The majority is paid by companies, mostly US companies buying product in China or US companies who have factories in China and ship that product here.
The way it works is when the product arrives at a US port of entry the Importer is required to submit documents on it’s content. All content is assigned an “HS Code” or product group I/D. If it is listed as a Tariffed product the US Importer is required to pay the normal tax + 25%. Normally this runs approx. 32%. . . This is the bulk of the money flowing into the US Treasury.
Some Chines suppliers are now in a rush to try and manage the reduction in orders. A few will agree to share the cost increase but most will not. I know this because I am here in China and currently negotiating with many companies for reductions. . . most smile, take you to lunch and show you the door.
The math gets easy from here. . . those taxes are then passed on to the consumer. . . “you”. . . which in my opinion is nothing more than a tax increase.
Mr. President, I half stand behind your tariffs, especially when it comes to Intellectual Property, but I think it’s best you tell the American people the truth. A product that arrives at a low price and is sold at a lower price to the America consumer is good for the people even if there is a Trade Deficit with any Country. 2+2 does actually equal 4.
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