Economy

Commerce Secretary on Tariffs: Who’s Going to Notice?

JM Ashby
Written by JM Ashby

Now that the Trump regime has imposed tariffs on an additional $200 billion in goods imported from China, including household consumer goods, people are going to notice that, right?

I will personally notice when the price of things ticks upward, but Commerce Secretary Wilbur Ross will not notice because he's a fossil who hasn't had a coherent economic thought in 40 years.

Ross appeared on CNBC this morning where he said no one will notice higher prices because it will be spread among many products.

“Mr. Secretary, the average American family, making $50,000 a year, let’s say — how much do you expect these tariffs will impact them?” one of the CNBC hosts asked Ross. “Have you done that math so you know what an average family in America will pay once these tariffs go into effect?” [...]

“If you have a 10 percent tariff on another $200 billion, that’s $20 billion a year. That’s a tiny, tiny, tiny fraction of 1 percent total inflation in the U.S.,” Ross said. “Because it’s spread over thousands and thousands of products, nobody’s gonna actually notice it at the end of the day.

This is obviously not how anything works. It's not as if a 10 percent tariff will be divided up evenly among thousands of products. The tariff will be applied to every single product.

If someone buys a t-shirt and a pair of shoes imported from China, both products will be 10 percent more expensive, not 5 percent. And in any case, people who don't have a lot of money will notice that.

Moreover, the 10 percent tariff isn't going to last. The Associated Press reported this morning that Trump's order, which will be formally imposed next Monday, will automatically raise the rate from 10 to 25 percent on January 1st. China has also announced that it will retaliate with another $60 billion in retaliatory tariffs on American goods.

We don't have to guess what impact these policies will have because we've already seen it.

Take the photo at the top of his post as a very deliberate example.

Ross held up cans of Campbell's Soup and Budweiser the last time he said (on CNBC) that no one would notice Trump's original round of tariffs on steel and aluminum.

What happened after that? China retaliated and the Trump regime is now bailing out American farmers.

They can't bail out every industry.

  • muselet

    In the Hereafter, Adam Smith double-fists single-malts while John Kenneth Galbraith weeps quietly.

    –alopecia

  • Aynwrong

    The disgraceful part is that the “reporters” on CNBC just sat silent for a moment and then just prattled on without offering up the slightest bit of challenge. It was Fox & Friends level journalism.

  • Badgerite

    Wilbur who?

  • Georgie

    Egad! the stupidity for the trump administration is just mind boggling, the worst is who it is going to hurt? Regular working people like me.

  • katanahamon

    All we can unfortunately say is..”just wait.” The combined effects of less revenue, higher debts, higher deficits and the squelching of consumer spending is a recipe for global economic catastrophe. But hey, that’s for the next democratic administration to worry about, when the right will again return to trying to eliminate social programs because “the debt/deficit is too high, you’re already raising taxes (because we gave it all to the one percent) and bla bla bla same old shit we’ve always said when we fuck everything up then leave it for the grownups to fix!”