President Donald Trump insisted that American consumers can avoid price hikes caused by his increased tariffs on China by simply buying American. That’s simply false, because American companies rely heavily on Chinese products.
Despite Trump’s repeated false claim that China is paying the tariffs, numerous studies have found that American consumers are bearing the full cost of the tariffs and Trump’s economic adviser Larry Kudlow contradicted Trump last week when he admitted Americans will “suffer” along with China because of the tariffs.
Trump continued to insist that American consumers can simply avoid the tariffs on Twitter.
"There is no reason for the U.S. Consumer to pay the Tariffs," he claimed, adding that they can be "completely avoided if you buy from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That's Zero Tariffs."
Fact check: False
Simply put, Trump’s claim is wrong and does not take into account how the manufacturing economy actually works.
“Most of the Chinese products subject to tariffs simply aren't made in the US, including apparel and electronic components,” CNN explained. “For those few items where there is an American made alternative, there is also the problem of scalability: US companies simply lack the capacity to create the number of products that come from China. In that regard, Trump's suggestion that there is ‘no reason for the U.S. Consumer to pay the Tariffs’ is false.”
Greg Daco, the chief US economist at Oxford Economics, explained that Trump’s claim is “misguided.”
"The type of imports that we bring in from China and the scale of the imports ... make substitution, at least immediate substitution, nearly impossible,” he said.
The US has lost more than 90,000 factories over the last two decades, meaning that it is impossible to simply replace output here at home.
"To replace those imports you would need to build factories," Daco said, adding that costs would still be much higher because American workers are paid far more than Chinese workers.
"It would take at least a couple of years (and) would not be profitable," said Daco.
Trump call would hit US companies:
The companies that Trump urged Americans to avoid due to tariffs that he himself imposed are among the biggest American companies in the world.
“Wow! An American president just urged Americans to stop buying products from American companies like John Deere, Caterpillar and Ford,” wrote NBC News’ Jonathan Allen. “The argument is you should avoid the cost of tariffs by picking companies without facilities in China. But wow. Deere. Ford. Caterpillar.”
“A tariff is designed to discourage consumers from buying a particular good by increasing its price. In theory, it hurts the seller because buyers will find alternatives. But when there aren’t really alternatives, it just punishes the buyer—American consumers,” he added.