There is an old joke that someone was touring heaven and asked St. Peter (definitely not Peter Navarro) why one room had an endless wall covered with clocks.
“Oh, those are meters,” Said the venerable saint. “There is one for each person living, and anytime that person lies, the meter moves ahead one click.”
“And why has one of them been replaced with a fan?”
“Oh that’s Peter Navarro’s meter.”
I’m still sometimes surprised how some people will tell any lie on earth to suit their political beliefs, even when it is easily proven wrong and even after it has been proven wrong. If I were in a hot room, I’d want to stand next to Navarro’s lie meter to keep my cool; however, listening to him does not do well for my cool. Still, what can you expect from a failed liberal Californian politician who was so far Left that political pundit Joe Matthews called him “San Diego’s Bernie Sanders?” His career since petering out as a liberal politician was built on his writing under the fake persona Ron Vara, which focused on China-hatred. So, really his tariff orientation has more to do with absolute China hatred, but then it’s hard to completely fault that, given China’s own history.
Navarro’s big, baldface lie right now is that tariffs do not cause inflation, and the proof of that, he claims, is that Trump’s tariffs during his last shift on duty caused no inflation. Here’s his lie:
We put on significant tariffs on China, steel, aluminum, dishwashers, solar, a lot of increased countervailing duties to stop the dumping [in Trump’s first administration]. We had zero inflation from any of that. It never happened, and it’s the same movie this time. Inflation is a monetary phenomenon, where we run a Federal Reserve that prints too much money, and they do that to accommodate fiscal irresponsibility.
If it’s the same movie this time, look out! This is a retreaded lie from his past stint with Trump where he kept trying to sell the Trump Tariffs after they began with the same inflation-free/fact-free zone claim:
Shortly after then-President Donald Trump launched his “good and easy to win” trade wars in 2017, Peter Navarro sat down with CNN’s Jake Tapper to defend the use of tariffs.
(Turned out they weren’t so easy to win. The one with China never ended.)
Asked whether Americans would end up paying the brunt of the tariff cost, Navarro told Tapper to “look at the data.”
“China is bearing the entire burden of the tariffs,” Navarro said. “There is no evidence whatsoever that American consumers are paying any of this.”
Want a job with great security? Become the repairman who services Navarro’s fact-checking machine. That thing has to be constantly shorting out.
In fact, today’s lie is retread of may similar past lies Navarro told back in the Trump 1.0 days:
Take the steel industry. U.S. Steel is spending more than $2 billion to upgrade its plants… Over time this tariff-induced investment, along with lower taxes and sensible deregulation, will boost growth and job creation.
Actually, the way that turned out, according to Bloomberg, was that the Trump Tariffs cost US Steel $5.7-billion. Post-tariffs, CNN wrote,
US Steel is closing a mill near Detroit, laying off workers and cutting its dividend. The troubled company is trying to reverse operating losses it now forecasts for the fourth quarter.
The mill, called the Great Lakes Works, is expected to close its iron and steelmaking operations by April 1. The part of the mill that rolls slabs into sheets of steel will shutter by the end of next year. About 1,500 jobs will be lost, the company said….
The company and the rest of the domestic steel industry were supposed to get help from a 25% tariff on steel imports put in place in 2018 by the Trump administration. But after a short-term rise in steel prices, they have retreated and problems have returned to the industry. In October US Steel reported its first loss since tariffs were imposed.
Even though it didn’t get better with time, but got worse instead, Navarro continued to sell the lie:
“I think the bet [on tariffs] is paying off beautifully,” he said. “We are very bullish on the steel and aluminum industries because of the tariffs. If they weren’t in place, those industries would be in very bad shape right now.”
As far as US Steel’s situation, Navarrow [sic.] said the company “did not adapt with the times. They are paying for it dearly.”
The company also announced it is cutting its dividend by 80% to 1 cent a share. And after previously announcing it would suspend share repurchases, it announced Thursday that it was formally ending its share repurchase program. Shares of US Steel (X) were down 8% in early trading Friday, leaving shares down 32% for the year.
You can blame that like Navarro tried to do on the US steel industry that had some old-dog plants that needed replacing. However, a look at the statistics says steel was hit hard by tariffs, not helped. More on that to follow, but getting back to those specifics, Navarro also said in a January, 2020, op-ed,
“Yet with each new tariff—on dishwashers, solar panels, aluminum, steel and more than $300 billion of Chinese imports—the economy remains robust, wages continue to rise, and inflation stays muted.”
You could fill a hot-air balloon with that. According to the New York Times, the truth (not that they can be trusted with it either, so we won’t just take their word for it) was that …
Research … by the economists Aaron Flaaen, of the Fed, and Ali Hortacsu and Felix Tintelnot, of Chicago, estimates that consumers bore between 125 percent and 225 percent of the costs of the washing machine tariffs.
Why more than the tariffs? It’s because US companies have two choices if they cannot get foreign entities to mark down their prices enough to offset the tariff. The US companies either absorb the cost out of their profit margins, which then comes out of investors, especially American investors, or they can risk losing market share by marking up their products; however, if they sell to retailers rather than directly to consumers, as if often the case, the tariff portion of their price gets marked up again when the retailer passes on to the consumer, usually, at least, double).
The truth is that Americans and American businesses bore 93% of the tariffs. Only 7% was passed backward in price adjustments to Chinese producers. Trump either believed Navarro’s baloney, in which case he was naive, which is to put it kindly, or he didn’t mind conjuring the same lie because Trump has always told his audiences that he loves a tax that China has to pay as a way of creating US revenue. That’s only 7% true. Tariffs are almost entirely paid by the domestic entities importing items, not via price adjustments from the foreign outfits selling to the US.
Based on analysis by the relatively non-political (in terms of Dems versus Repubs) Moody’s, they also say price adjustments worked 7% of the time with Chinese producers. In fact, in the case of the products Navarro specifically mentioned above (to show how specifically he lies), the Federal Trade Commission determined that Americans paid for almost all of the tariffs. So, the very ones he named as being inflation-free were the worst for inflation. Whether consumers or factory owners/shareholders, some American citizen is taking the hit.
As for those solar products, if the tariffs were so good for US solar companies, why did SunPower lay off about 3 percent of its workforce in March of 2020 three months after the tariffs on imported solar materials went into effect?
The NYT also noted fewer aluminum production jobs in the US about a year after the aluminum tariffs went into effect, and the Wall Street Journal said in early 2020,
Manufacturing job growth has slumped since the Trump administration enacted the first of four tranches of tariffs on Chinese goods.
Farmers, of course, took a huge hit because of retaliatory tariffs. That’s right: the other guys fight back: (Trump and Navarro never acknowledge that because winning tariff wars “is easy, so easy.”
Retaliatory tariffs imposed by China have particularly hurt U.S. farmers. U.S. agricultural exports to China dropped to $9.1 billion in 2018, down from $19.5 billion the previous year, according to the American Farm Bureau, an agricultural lobbying group. That figure has continued to drop, with exports to China in the first half of 2019 sinking to $1.3 billion. Trump has responded by boosting subsidies to farmers.
You have only to look to your own memory to know the truth of that statement. You may recall that farmers got hit so hard by retaliatory tariffs they had to be bailed out by the Trump administration.
As Reuters reported,
Exports of U.S. goods hit by retaliatory tariffs from China and other countries fell by 23% in the 12 months ended November, compared with 2017, before the tariffs began, the analysis showed. Even when retaliatory tariffs have ended, those exports haven’t bounced back, said Trade Partnership Vice President Dan Anthony.
According to Reuters US businesses lost $46-billion due to the tariffs they paid plus retaliation that cost them sales, and that was also just as of January, 2020; so, less than two years into the tariffs. In fact, some of the tariffs had not even begun by January, 2020. To give you a sense of the impact of retaliatory tariffs …
U.S. exports of goods subject to retaliatory tariffs in China were 26% lower in the 12 months ending November than in 2017, while exports of items not facing such tariffs were 10% higher….
Trump imposed tariffs on steel and aluminum imports in February of 2018. U.S. exports to countries that retaliated with tariffs of their own were 15% below their 2017 levels in the 12 months ending November 2019….
Moreover, import tariffs hurt US companies by raising the costs the parts they import, which also raises the price of the items those parts go into, not just for us, but also when they are exported, hurting our exports.
About 79% of manufacturers and 60% of service firms said tariffs had increased their input costs at least slightly, “a considerably more widespread effect” than in its survey a year earlier. That’s according to a Federal Reserve Bank of New York August 2019 survey of business leaders in New York and parts of Connecticut and New Jersey.
The impact of tariffs on imports of steel and Chinese goods that were imposed in 2018 was largely on the United States, not China, according to the study Tapper alluded to. It was done by researchers from Harvard University, the University of Chicago and the Federal Reserve Bank of Boston.
If you don’t want to take the facts about tariffs raising inflation from anti-Trump publications like the NYT, that’s totally understandable; however, Moody’s and the Federal Trade Commission (during Trump’s term) speak for themselves as do the following corporations:
Pepsi, Coca-Cola, Costco and the recreational vehicle-maker Winnebago are among retailers that said they raised prices as a result of the tariffs….
A variety of companies have reported harm from the U.S. and retaliatory tariffs, including Walmart, Caterpillar and Tyson Foods, the nonpartisan Congressional Research Service found….
And study after study has confirmed that the tariffs primarily hit Americans, not China. It’s simply ridiculous to make a flat claim that the tariffs aren’t hurting anyone in the United States.
We rate this statement Pants on Fire.
So, Trump has himself a professional/political liar for hire to sell his Trumped-up tariffs, and the sad thing is some people are buying the same bull all over again. I guess there is an endless market for snake oil. (Hey, don’t shoot the guy who tells you the truth, knowing it always costs him a little readership. That’s how you buy the same snake oil … twice … and pay more for it the second time!)
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