Former President Donald Trump dubiously claimed during Tuesday night’s presidential debate that U.S. consumers would not bear the cost of his proposed tariffs on imported goods.
Most economists say consumers pay for tariffs because, even though importers directly pay the levy when they bring products into the country, they pass those costs along to consumers through higher prices.
ABC News debate moderator David Muir asked Trump if Americans can afford higher prices under his proposal to impose a 20% tariff on all imports.
“They will not have higher prices,” Trump said. “Who’s going to have higher prices is China, and all of the countries that have been ripping us off for years.”
The claim that only other countries would pay for tariffs on products imported into the U.S. is reminiscent of Trump’s promise during the 2016 election that Mexico would pay for his proposed border wall. Shortly after Trump took office, he asked the then-president of Mexico, Enrique Peña Nieto, to stop saying Mexico wouldn’t pay.
“I have to have Mexico pay for the wall,” Trump said on a call with Peña Nieto, according to a leaked transcript.
“My position has been and will continue to be very firm, saying that Mexico cannot pay for that wall,” Peña Nieto said.
Trump eventually wound up diverting more than $3 billion from the U.S. military to pay for wall construction. (When he took office President Joe Biden canceled border wall projects that were funded by diverted military funds.)
Trump imposed tariffs on a range of Chinese imports during his presidency. The levies amounted to a tax of $80 billion on U.S. consumers, according to an estimate by the conservative Tax Foundation, and an annual tax increase of $625 per household. Trump noted during the debate that the Biden administration has kept most of the tariffs in place.
“If she doesn’t like them, they should immediately cut the tariffs,” Trump said.
Harris, for her part, pointed out that a group of 16 Nobel-prize winning economists said this year Trump’s tariffs would jack up inflation and damage the economy.
Economists of varying ideological stripes say that the cost of tariffs are, for the most part, ultimately borne by the consumer.
In 2019, the University of Chicago’s Kent A. Clark Center for Global Markets asked economists about the issue. It found 60% said they agreed that the then-new tariffs on Chinese goods would “fall primarily on American households.” Another 14% said they “strongly agreed” that that was the case.
Fourteen percent were “uncertain” and the percentage of respondents saying they disagreed or strongly disagreed was zero.
Douglas Holtz-Eakin, president of the conservative American Action Forum, said in June the 10% tariffs Trump has proposed at that time for most imported goods would be “in the same neighborhood as the Smoot-Hawley tariff whose fingerprints were all over the Great Depression.”