CHICAGO (Reuters) - U.S. President Donald Trump says China pays the tariffs he has imposed on $250 billion of Chinese exports to the United States but that is not exactly the way tariffs work.
“For 10 months, China has been paying Tariffs to the USA,” Trump tweeted on Sunday, saying he would raise tariffs again amid stalled negotiations on a trade deal with China.
But Trump’s tariffs are not paid by the Chinese government or companies located in China. They are paid by importers of Chinese goods - usually U.S. companies or the U.S.-registered units of foreign companies.
Importers often pass the costs of tariffs on to customers, for the most part manufacturers and consumers in the United States.
WHAT THE ‘TARIFF MAN’ SAYS
Trump has often repeated that China pays for U.S. tariffs on its goods.
“We have billions of dollars coming into our Treasury — billions — from China. We never had 10 cents coming into our Treasury; now we have billions coming in,” he said on Jan. 24.
Trump, who has called himself the “Tariff Man,” said on Sunday he will raise tariffs on Friday to 25 percent from 10 percent on $200 billion of Chinese goods.
He has already imposed tariffs of 25 percent on $50 billion of Chinese imports. Global steel and aluminum imports and shipments of washing machines and solar panels are also subject to tariffs Trump has levied since January 2018.
HOW TARIFFS REALLY WORK
U.S. Customs and Border Protection (CBP) collects the tax on imports. The
