Larry Kudlow’s acknowledgment was merely a recognition of Economics 101. But it flew in the face of one of President Trump’s favorite arguments: that trade wars are easy to win.
WASHINGTON — President Trump’s chief economic adviser said on Sunday that American consumers would bear a burden from the escalating trade war with China, contradicting Mr. Trump’s claim that his tariffs were a multibillion-dollar, one-way payment by China to the United States Treasury.
The adviser, Larry Kudlow, made his comments two days after negotiations for a trade deal with China broke off and Mr. Trump followed through on a threat to raise tariffs on $200 billion worth of Chinese exports.
“In fact, both sides will pay,” Mr. Kudlow said in an interview on Fox News. “Both sides will pay in these things.”
Mr. Kudlow’s acknowledgment was merely a recognition of Economics 101. But it flew in the face of one of the president’s favorite arguments: that trade wars are easy to win, and that the pain falls disproportionately on America’s trading partners, which he accuses of having exploited the United States for years through predatory trade practices.
After months of pressing urgently for a deal with China, Mr. Trump abruptly shifted course in the past week, stung by what he viewed as its attempt to renege on key parts of a draft agreement. The president declared he was ready to prolong the standoff with Beijing because the cost of a trade war is much higher for the Chinese, with their huge numbers of exports to the United States, than it is for Americans.
“Talks with China continue in a very congenial manner,” Mr. Trump said Friday on Twitter. “There is absolutely no need to rush — as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U. S.”
He went even further in a subsequent tweet, claiming that tariffs would “bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind” — a statement that seemed to undercut his administration’s contention that China has robbed American companies of billions of dollars through coercive practices like the forced transfer of technology and unfair licensing agreements.
