Fox News Anchor Confronts Trump Official Over False Claims That China Tariffs Don't Raise Costs for Americans

Fox News anchor Chris Wallace pushed back hard after President Donald Trump's Director of Trade and Manufacturing Policy Peter Navarro falsely claimed that the administration's tariffs on Chinese imports were not raising costs for Americans.

The Trump administration trade official tried to argue during an interview on Fox News on Sunday that China was eating the costs of the tariffs without any effect on U.S. businesses and consumers, an assertion aligned with the president's frequent insistence that the Chinese are paying the tariffs. But Wallace confronted Navarro with facts about the levies' impact, along with a chart from Trump's Department of Labor and Department of Commerce showing how the levies were correlated with higher prices for U.S. consumers.

Wallace asked Navarro whether American businesses were passing the added cost of tariffs onto consumers, to which the trade official replied: "false." He argued that the Chinese manufacturers and producers were lowering prices significantly to compensate for the additional import levies, allowing U.S. businesses to pay the same price as before trade tensions escalated over a year ago.

The Fox News anchor then pushed back, playing a clip of Federal Reserve Chairman Jerome Powell outlining the negative impact of the trade war with China on the U.S. economy. Wallace also read a quote from a May Goldman Sachs report that stated: "The cost of U.S. tariffs have fallen entirely on U.S. businesses and households, with no clear reduction in the prices charged by Chinese exporters."

After Wallace put up a chart showing how costs on tariffed products had increased for U.S. consumers, which was based on data from the U.S. Departments of Labor and Commerce, Navarro attempted to interject. "You can't give me a chance here to respond?" the Trump official asked. Wallace said he would, before returning to the chart.

"Look at this chart from the Trump Labor Department," the anchor said. "The yellow line shows that the consumer price of tariffed goods has risen dramatically since the president started imposing them." Wallace pointed out to Navarro that the Trump administration's own reporting showed that "on a macro and a micro level that tariffs cause consumer prices to rise."

Trump has repeatedly claimed inaccurately that his tariffs on Chinese goods are being paid by businesses and exporters in the Asian nation. However, as economists and analysts have explained over and over, that's not how tariffs work. The additional levies are paid by importers, when the goods arrive in the U.S. This means the cost of importing the designated Chinese goods is higher, leading businesses to raise prices for consumers.

Despite the impact on American businesses and consumers, Trump threatened to add further tariffs to Chinese goods last Thursday. As economists told Newsweek, the new 10 percent tariffs on $300 billion more of Chinese imports would raise costs of things like clothing, shoes, toys, and many consumer-electronics, which had previously been spared by the president's trade war. A forecaster with Oxford Economics told Newsweek that the additional tariffs would cost the average American household about $700 annually, with that amount increasing to $900 if Trump raises the tariffs higher to 25 percent as he has also threatened.

Earlier this year in May, Wallace interviewed Larry Kudlow, Trump's director of the National Economic Council, getting him to admit that Americans "will suffer" as a result of the president's trade policies targeting China.

"In fact, both sides will pay in these things," Kudlow said, before Wallace made him clarify that the Chinese are not paying the tariffs. "Again, both sides will suffer on this," the Trump administration official said.

Gary Cohn, who previously served in Kudlow's current role under Trump, has regularly stated his disagreement with the administration's trade policy. In March, he said in an interview with Freakonomics radio that "tariffs don't work."

"If anything, they hurt the economy, because if you're a typical American worker, you have a finite amount of income to spend," Cohn, the former president and chief operating officer of Goldman Sachs, said. "If you have to spend more on the necessity products that you need to live, you have less to spend on the services that you want to buy."

When asked by the radio show's host if other economists agreed with Trump's perspective, Cohn quipped: "There's only one in the world," referring to Navarro.

In an interview with the BBC this past week, Cohn again criticized the current U.S. trade policies toward China.

"I think the trade war with the United States was a very convenient excuse for the Chinese to slow down their economy when they needed to slow down an overheated economy where prices, and real estate prices, and everything were getting out of hand," he said.

A March 2019 paper by the National Bureau of Economic Research published a report in March, which examined the data concerning the impact of Trump's tariffs. That research concluded that the costs of the additional levies were nearly entirely paid by American consumers and importers.