Billionaire Trump Official Says Price Increases Are OK Because Consumers ‘Won’t Notice’
Wilbur Ross, President Trump’s commerce chief says prices will go up for consumers as a result of new tariffs on Chinese goods — but insisted that is okay because “nobody is going to actually notice it at the end of the day.”
Trump announced on Monday that he will impose a 10 percent tariff on $200 billion of Chinese imports starting later this month, which will result in Americans paying more for products like air conditioners and lamps.
Ross spoke to CNBC Tuesday morning to address the price increases and he left CNBC hosts dumbfounded after he argued American families won’t notice the price increases because it will be “spread across thousands and thousands of products.”
“Mr. Secretary, the average American family, making $50,000 a year, let’s say — how much do you expect these tariffs will impact them?” one of the CNBC hosts asked Ross. “Have you done that math so you know what an average family in America will pay once these tariffs go into effect?”
Ross, who was worth $2.9 billion in 2016, argued that the impending price increases aren’t actually a big deal.
“If you have a 10 percent tariff on another $200 billion, that’s $20 billion a year. That’s a tiny, tiny, tiny fraction of 1 percent total inflation in the U.S.,” Ross said. “Because it’s spread over thousands and thousands of products, nobody’s gonna actually notice it at the end of the day.”
But that’s not how economics work — and the hosts seemed dumbfounded by Ross’ claim that price increases don’t matter, stammering for a few seconds before changing the topic.
China, unsurprisingly, has already threatened to retaliate in response to Trump’s latest escalation in his global trade war.
Shortly after Ross’ interview wrapped up, President Trump expressed confidence that American farmers will endure hardship created by his trade war because “these people are great patriots.”
“China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me,” Trump tweeted. “What China does not understand is that these people are great patriots and fully understand that….. China has been taking advantage of the United States on Trade for many years.”
He added: “They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”
But as the Washington Post details, it doesn’t seem that Trump understands exactly how tariffs work:
At the White House on Monday, Trump wrongly said that “China is now paying us billions of dollars in tariffs” and he celebrated the Treasury Department collecting “tremendous amounts of money, which is great for our country.”
In fact, tariffs are taxes that are paid by Americans who import goods from abroad. Through the end of August, the administration had collected nearly $22 billion in revenue because of its new tariffs, according to the nonpartisan Tax Foundation.
Trump has repeatedly indicated that the goal of his trade war is to persuade companies to relocate production to the U.S. But so far, companies like Apple have indicated that they will instead raise prices on U.S. consumers.
Trump’s response to Apple’s tariff-driven price hike shows how clueless he is about economics.
Even the right-wing Tax Foundation concluded Trump’s tariffs will wipe out a significant percentage of any economic gains resulting from tax cuts for the wealthy that Republicans passed late last year. There are already some indications that wages aren’t keeping up with inflation, which will only become more of a problem as Trump imposes new tariffs on more imported goods.
Watch Ross interview in the video below, via CNBC.