Kudlow Acknowledges US Will Pay For China Tariffs, Contradicting Trump

Larry Kudlow, Director of the United States National Economic Council.

Adam Jeffery | CNBC

White House economic adviser Larry Kudlow on Sunday acknowledged that the Chinese do not directly pay tariffs on goods coming into the U.S., contradicting President Donald Trump's claims that China will pay for tariffs imposed by the U.S.

Kudlow said that "both sides will suffer on this," but argued that China will suffer significant GDP losses as export markets are hit. The blow to U.S. GDP, on the other hand, won't be substantial since the economy is "in terrific shape," he said.

Fox News' Chris Wallace pressed Kudlow about Trump's claims.

"It's not China that pays tariffs," Wallace said. "It's the American importers, the American companies that pay what, in effect, is a tax increase and oftentimes passes it on to U.S. consumers."

"Fair enough," Kudlow replied. "In fact, both sides will pay. Both sides will pay in these things."

Kudlow added, however, that China doesn't actually pay the tariffs, but that their GDP will suffer "with respect to a diminishing export market."

"This is a risk we should and can take without damaging our economy in any appreciable way," Kudlow said.

The most recent round of trade talks, which ended on Friday with no final agreement, followed Trump's decision to more than double tariffs on $200 billion of Chinese goods.

Trump said on Saturday that China should "act now" to wrap up a trade deal with the U.S, warning that "far worse" terms would be offered to them in what he predicted would be his second term as president.

Trump also suggested that the U.S. was "collecting" big tariffs from China.

"Would be wise for them to act now, but love collecting BIG TARIFFS!" he tweeted.

Kudlow said that Trump will likely meet with Chinese President Xi Jinping at the June G-20 summit in Japan.

RECENT NEWS

Stocks Rise After Better-than-expected Jobs Report To Close Out Winning Week

Stocks rose on Thursday following a better-than-expected U.S. jobs report as the economy tries to recover from the coron... Read more

Record Jobs Gain Of 4.8 Million In June Smashes Expectations; Unemployment Rate Falls To 11.1%

Another big contributor to the decline of the jobless rate was a plunge in those on temporary layoff. That total fell by... Read more

17.6 Million Unemployed Americans Probably Won't Return To Their Pre-pandemic Jobs

The share of the workforce currently out of work with no reasonable chance of returning to their jobs is about 11%, or a... Read more

GM, Fiat Chrysler U.S. Auto Sales Tank In Second Quarter As Coronavirus Saps Demand

U.S. vehicle sales in the second quarter for General Motors, Toyota Motor and Fiat Chrysler plunged by more than 30% Read more

Mortgage Demand Falls For The Second Straight Week, Signaling A Potential Slowdown In The Housing Recovery

The surge in mortgage demand from homebuyers over the past two months appears to be waning, even as mortgage rates conti... Read more

Fed's Bullard Warns Of Financial Crisis Risks As Virus Cases Spike, FT Reports

St. Louis Federal Reserve Bank president James Bullard has warned that a growing number of bankruptcies due to the coron... Read more