South Korean media: "Under Trump's tariff stick, the only one being hit is the US!"

On September 1, the South Korean newspaper Seoul Economic Daily published an article stating that some opinions believe that American companies have paid the biggest price due to the tariff policies of the Trump administration.

US President Donald Trump often defends the US government's tax policy from the 19th century. On April 2, on the day he announced the reciprocal tariff plan, he said, "Before 1913, the United States was a country based on tariffs, and it was then that our leaders introduced income tax so that our own people, not foreigners, would start paying for the operation of our government."

From this text, it can be seen that the intention of President Trump in imposing high import tariffs is clear. However, some analysts point out that the tariffs imposed this year are actually borne by American companies rather than foreign companies, which is noteworthy.

Citibank and Deutsche Bank separately released reports stating that the cost of increased tariffs is mainly borne by American companies.

Citibank's report stated, "Consumer price trends show that the impact of tariffs on consumer prices has been relatively limited so far. Throughout May, there was no sign of inflation caused by tariffs, while in June, prices in some industries such as home goods and toys showed abnormally high increases."

The report said, "Companies may be delaying price increases due to inventory clearance," and "we may see significant price increases in the next three months."

What caught Wall Street's attention is that the impact of tariffs is concentrated on American companies. The report said that although US consumer prices are expected to rise over time, so far, the impact of tariffs has mainly affected American companies, not foreign companies.

Deutsche Bank stated in its report, "Since the beginning of this year, US tariff revenue has exceeded $10 billion, and someone has to pay for it. If foreign companies bear the tariff burden, they will reduce profits and lower prices, so import prices should fall. However, according to the trend since the second quarter when the tariffs were implemented, prices in Canada and the UK have confirmed a gradual decline; as for China, despite a 30% increase in tariffs, import prices have only fallen by 1%."

Deutsche Bank concluded that foreign companies almost do not bear the cost of tariffs. It is not that foreign companies are lowering prices to offset profit losses, but American importers are bearing the tariff burden by reducing their profits.

President Trump originally hoped that foreign companies would bear the tariff costs, but in reality, it is American companies that are paying the price.

In fact, according to Bloomberg, the US auto giant General Motors announced that its quarterly profits fell by more than $1 billion due to the decision to absorb the impact of tariffs. This also explains why car prices did not rise in the inflation data released last week.

Deutsche Bank stated in its report, "It is very likely that consumer price increases will become a reality in the future," and "in the end, American companies and consumers will be hit by the import tariffs of the Trump administration."

Wells Fargo also predicted in a report released last week, "With little decline in import prices, US domestic companies are bearing the cost of tariff increases, and companies will now start passing this cost on to consumers."

The report explained, "Recent increases in import prices have been interpreted as foreign suppliers refusing to lower prices."

Deutsche Bank and Wells Fargo agree that the depreciation of the dollar is another problem for American companies. They said that foreign companies respond to the weak dollar by raising prices, which in turn increases the cost of imported US products, creating a vicious cycle that burdens American companies even more.

Original: www.toutiao.com/article/1842026575251464/

Statement: This article represents the views of the author.