Tariffs are taking a financial toll on American consumers and businesses, and a coalition of 150 American business and agricultural trade associations says it has the numbers to prove it.
Data released by Tariffs Hurt the Heartland on Nov. 6 indicates U.S. consumers and businesses paid an additional $38 billion between February 2018, when the U.S. began imposing tariffs on imports of Chinese goods, and September 2019. The tariffs cover an estimated $550 billion of Chinese goods.
"This data offers concrete proof that tariffs are taxes paid by American businesses, farmers and consumers — not by China," Jonathan Gold, a spokesperson for coalition member Americans for Free Trade, said in a statement.
The coalition said the most notable recent bump in the amount of tariffs paid by American consumers and businesses occurred in September 2019, when $112 billion worth of tariffs were applied at the start of the month to additional Chinese-made consumer goods imported into the U.S.
According to Tariffs Hurt the Heartland, Americans paid an additional $905 million during the first 30 days of the tariff hike taking effect, for a total of $7.1 billion in September 2019. That's an increase of $600 million over the previous month, the coalition said.
JPMorgan Chase & Co (NYSE: JPM) has also forecast that U.S. tariffs on China will cost American households up to $1,000 per year, and Moody's Analytics (NYSE: MCO) estimated the tariffs have reduced U.S. employment by 300,000.
The financial impact of retaliatory tariffs imposed by China on American exports totaled $10.6 billion since February 2018 and exceeded $1 billion in September 2019 alone, according to Tariffs Hurt the Heartland. The brunt of these tariffs has been most felt by U.S. agricultural goods producers whose exports to China are now almost 30% below pre-tariff levels.
Brian Kuehl, co-executive director of coalition member Farmers for Free Trade, said, "This data shows the depth of the hole the trade war has created and why it's going to be tough to dig out."
Tariffs Hurt the Heartland compiled the data in partnership with The Trade Partnership, a Washington, D.C.-based international trade and economics consulting firm. The monthly import figures were calculated based on data from the U.S. Census Bureau, while the monthly export data was compiled from Census Bureau and U.S. Department of Agriculture numbers, the coalition said.
Many U.S. importers and exporters were relieved on Oct. 11 when the Trump administration announced it would suspend a threatened Oct. 15 increase in tariffs from 25% to 30% on $250 billion worth of Chinese goods.
That increase was first announced by the White House in late August in response to China's decision to impose new tariffs on U.S. goods. The Trump administration has justified the use of tariffs as a means to force China to negotiate more favorable trade conditions for U.S. industries.
President Trump said on Oct. 11 that trade talks in Washington between China's Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin resulted in a "phase one deal," which will encompass new intellectual property and financial services protections and require China to import up to $50 billion in U.S. agricultural products.
A separate 15% tariff on $160 billion on Chinese goods scheduled for Dec. 15 remains in effect, although Trump administration officials have indicated they may suspend this tariff round if the U.S. and China sign the phase one deal, which is now expected to happen in early December.
"Unfortunately, while the trade negotiations are an encouraging sign, reports indicate the phase one deal being discussed does not address these tariffs that are already in place that have cost Americans $38 billion," Gold said.
Kuehl said that no matter the outcome of the phase one deal with China, "two years of economic pain won't be undone by one-time ag purchases or partial deals.
"The true test of any deal to end the trade war will be whether the tariffs are fully rolled back," he said.