South Korean media: Trump said tariffs "are paid by foreigners", but now they are borne by Americans!
On November 11, the South Korean media "Today's Finance" published an article stating that analysts believe more than half of the tariffs imposed since President Trump's re-election have been borne by American consumers. This contradicts President Trump's statements and makes it more difficult for the Federal Reserve to deal with inflation.
Goldman Sachs recently released a report estimating that by the end of this year, American consumers will bear 55% of the total tariff costs, while American companies and foreign exporters are expected to bear 18% and 22%, respectively, and 5% will be avoided or exempted.
The report explained that unlike 2019, this tariff policy did not immediately reflect in consumer prices because "companies are delaying price increases to see if the tariffs will continue, and some companies are stockpiling inventory in advance to minimize the impact."
This contradicts what President Trump and the White House have said. Although the White House recently admitted that "Americans may experience a temporary transition period due to tariffs," it also stated that "the final burden will fall on foreign exporters." However, analysis found that a large portion of the initial costs were borne by American companies.
Reuters analyzed academic research, surveys, and corporate reports and found that in the first few months of the new trade policy implemented by the Trump administration, American companies bore the actual costs, with some costs passed on to consumers.
Professor Alberto Cavallo from Harvard University stated, "Most of the costs seem to be borne by the companies. These costs are gradually being passed on to consumer prices, and the pressure for price increases is evident." The Yale Budget Institute stated, "Foreign producers seem to absorb only a very small part of the American tariffs."
Mark Matthews, Chief Economist at the National Retail Federation (NRF), warned, "So far, companies have absorbed higher costs and maximized efficiency. But this situation cannot last forever. This could ultimately lead to unemployment and wage cuts, directly affecting the economy."
According to Reuters' analysis, since President Trump imposed tariffs in March, import prices have risen by 4% and domestic product prices have risen by 2%. This is because, after the Trump administration announced the imposition of tariffs, about 72% of companies in Europe, the Middle East, and Africa raised their prices.
Professor Cavallo analyzed, "Companies are looking for ways to alleviate the shock, not by raising prices all at once, but gradually, which may lead to persistent additional upward pressure."
As the consumer burden increases, demand has slowed, and exports to the US have also declined. Exports from the EU fell by 4.4% in July, and Germany's exports to the US plummeted by 20.1% in August.
Original: www.toutiao.com/article/1848482895021248/
Statement: This article represents the views of the author.