Hoeven Pushes Misleading Claim on Tariffs. Gets Fact Checked

More people are beginning to wonder if the Trump administration has a plan when it comes to the trade dispute with China. It seems a series of tweets riddled with misleading claims and outright lies has only increased the uncertainty of American farmers at an important time in this year’s farming operations. It is frustrating to see North Dakota’s elected leaders amplifying these misleading claims.

Approximately two weeks ago U.S. Ag Secretary Sonny Perdue reportedly told North Dakota farmers a second round of federal farm subsidies weren’t even a consideration. The information was relayed by North Dakota Ag Commissioner Doug Goehring. Now, with another round of tariffs, we are seeing not only the impacts on markets but also hearing the very specific details of a $15 billion farm subsidy to be paid for using “the tariff money that comes in.”

(AUDIO OF SENATOR JOHN HOEVEN STATING THE SECOND FARM SUBSIDY IS FUNDED BY THE TARIFFS)

Using “the tariff money that comes in” to pay for the second round of farm subsidy is what Senator John Hoeven is claiming. What money is coming in? It begs the question if Hoeven understands that it is Americans who are paying the tariffs? In essence an import tax on American businesses. Businesses often add that cost onto consumers. The money doesn’t “come in” from China as President Trump has spent the last few days tweeting attempting to convince people that’s how it works. It doesn’t.

Hoeven is echoing the President’s misleading claims about tariffs. It forced the Associated Press to correct Hoeven’s statement. Here is what the AP wrote, “Actually, the burden of tariffs falls on U.S. consumers and businesses that buy imports. By the end of last year, those consumers and companies were paying $3 billion a month in higher taxes and absorbing $1.4 billion a month in lost efficiency, according to a study by the Federal Reserve Bank of New York and Columbia and Princeton universities.” Hoeven is repeating a misleading claim at best. An outright lie at worst.

LISTEN TO DR. FRAYNE OLSON OF NDSU’S DEPARTMENT OF AGRIBUSINESS AND APPLIED ECONOMICS EXPLAIN WHO PAYS TARIFFS

To summarize, American businesses write the checks for the tariffs which can be called an import tax. That tax goes to the U.S. Treasury. Eventually businesses may pass these costs to U.S. consumers.  Under the current discussions, the money will then be redistributed to farmers through a second farm subsidy to offset the negative impacts created by the trade war and the use of tariffs. The total subsidy combing the first installment with the latest proposal is $27 billion. Bottom line, China isn’t writing a check. That is similar to saying Mexico will pay for the wall.