Goldman: Cost of Tariffs Being Paid By US Businesses, Consumers

JM Ashby
Written by JM Ashby

There's a specific part of this analysis from Goldman Sachs that prompted me to say 'duh' and I doubt it will knock your socks off either.

Goldman took a look at the cost of Trump's trade war and who exactly is paying for it and they found that consumer prices have actually risen more than they expected for reasons that will probably seem obvious to anyone who has ever worried about money a single time in their lives.

From CNBC:

"One might have expected that Chinese exporters of tariff-affected goods would have to lower their prices somewhat to compete in the US market, sharing in the cost of the tariffs," Goldman said.

"However, analysis at the extremely detailed item level in the two new studies shows no decline in the prices (exclusive of tariffs) of imported goods from China that faced tariffs."

In addition, US producers have "opportunistically" hiked prices in response to protection from Chinese competitors, the bank said.

No shit?

Who could have seen that coming except for everyone who is not a hot-shot Wall Street analyst?

The most concerning part of Goldman's analysis is their expectation that the United States and China will not reach an agreement until "later this year," meaning the bank apparently believes Trump will impose tariffs on an additional $300 billion in Chinese goods later this month.

I don't work for an investment bank, but if you asked me I'd say there's a 50/50 chance that Trump will either impose more tariffs or announce a fake deal with China that mirrors the fake deal with Mexico he announced on Friday. It wouldn't even be the first time Trump announced that he struck a fake deal with China.

Based on public statements made by Chinese officials, I think it's clear that they're not going to give Trump everything he wants.

Chinese Foreign Ministry spokesman Geng Shuang again would not be drawn on confirming a Xi-Trump meeting at G20, saying information would be released once it was available to the ministry.

“China does not want to fight a trade war, but we are not afraid of fighting a trade war,” he said, adding China’s door was open to talks based on equality.

“If the United States only wants to escalate trade frictions, we will resolutely respond and fight to the end.”

"Equality" is not Trump's strong suit. Or any of his suits.

  • muselet

    Goldman Sachs certainly has a firm grasp of the blindingly obvious, doesn’t it?

    Also, China’s shift to less indirect language—the two-word translation of Geng Shuang’s statement is, effectively, “Bring it!”—is worrying. China is taking Trump’s trade war far more seriously than is the Trump administration. Ignoring the Chinese government’s warnings would be a very foolish thing to do.

    I fully expect the Trump administration to ignore the warnings.


  • Badgerite

    What are the odds that once US importers hike the prices on goods to pay trump tariff that when the tariffs come off the prices will go back down? Anyone? Zero. The answer is zero. What that is, then, is a hidden tax. On consumers.
    We used to call those sales taxes.

  • Draxiar

    Weren’t these things supposed to be “easy to win”? I honestly do not comprehend how anyone can look at this fuckwit and see anything other than a fuckwit.

    Even the coal workers in that picture look like they’re wondering how this guy can breath without choking on his own tongue.