Who is paying the tariffs

Who is Paying the Tariffs?

“The tariffs are a tax on American consumers!”  “The tariffs will drive up the prices of everything!”  Those were the cries of the critics of President Trump’s tariffs on Chinese goods.  But it seems that prices at the consumer level are flat and prices at the wholesale level actually declined in the most recent reports.  Perhaps there is some truth to the assertion by the Administration that Chinese producers are absorbing the tariffs themselves in order to maintain their competitiveness.  The chart below, by Marketwatch.com using Federal Reserve data, shows the decline in year-over-year producer price change to go along with decline in prices in the most recent month.