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Mnuchin Dismisses Data Showing Trade War Pain


American importers, who bear all the costs of the tariffs, have not been buying that argument.

“It is the U.S. importer which technically pays the tax,” said Brad Setser, a Council on Foreign Relations fellow and former Treasury Department economist. “The extent that other countries pay for a share of the tax, it is because the tax induces them to reduce the price they charge to the United States.”

Mr. Setser also noted that import prices on goods coming from China have dropped modestly in the last year even as Mr. Trump has increased tariff rates, suggesting that currency fluctuations are not covering much of the cost of the new taxes.

“It has not paid for the majority,” Mr. Setser said of the tariffs.

Business groups representing a wide range of sectors, from retailers to soybean growers, have blamed the tariffs and China’s retaliation for disrupting their supply chains and slowing their sales and hiring.

Challenger, Gray & Christmas, the staffing company, said in a report this month that businesses were laying off thousands of workers because of uncertainty related to the tariffs.

“Employers are beginning to feel the effects of the trade war and imposed tariffs by the U.S. and China,” said Andrew Challenger, the company’s vice president. “In fact, trade difficulties were cited as the reason for over 10,000 job cuts in August.”

In an analysis of earnings calls of big companies this summer, the U.S. Chamber of Commerce found that tariffs were mentioned more than 650 times by executives. Manufacturing, industrial and retail companies expressed the most concern about the tariffs, which the chamber called a “major threat” to the longest economic expansion in American history.

Goldman Sachs economists wrote in a note to clients on Monday that its economic growth projections for the second half of the year were down half a percentage point from the first half as a result of the trade dispute with China.


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