miércoles, 15 de mayo de 2019

miércoles, mayo 15, 2019
U.S. Tariffs Haven’t Been This High Since the Great Depression

By Al Root

 
It’s official. U.S. customs duties are set to eclipse 1930s tariff levels.

U.S. and Chinese officials haven’t agreed on a new trade pact, which means the America is slapping higher tariffs on more Chinese goods.



If the new Chinese tariffs stay in place all year, then customs cash flowing into the U.S. Treasury will eclipse levels last seen in the 1930s, when measured against the size of the overall economy.


The Smoot-Hawley Tariff Act, passed by Congress in 1930, is blamed, in part, for the Great Depression that decade. Reed Smoot was a senator from Utah and Willis Hawley was a member of the House from Oregon.

There is something, however, to President Trump’s claim that tariff money is pouring into U.S. coffers.





Through March, customs duties were up more than 60% on a trailing 12-month basis. Still, the roughly $50 billion received over that time is only about 1% of total spending by the U.S. federal government.

So far, it seems that the stock-market pain in response to the new tariffs was felt earlier in the week. The Dow Jones Industrial Averagewas near the break-even line after Treasury Secretary Steven Mnuchin called the latest talks on trade constructive and a Federal Reserve governor said cuts in interest rates could be a possibility if consumers cut back on spending.

“Countries don’t pay tariffs,” said Jason Pye, vice president for legislative affairs at FreedomWorks, a conservative advocacy group. “Businesses don’t pay tariffs. Only consumers pay these costs. Tariff increases are nothing more than a tax hike on individuals.”

The longer the tariffs last, the more instability they will cause, he said.

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