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Trump economics adviser admits China trade war will hurt US consumers

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President Donald Trump’s top economic adviser, Larry Kudlow, said in an interview Sunday that the president’s escalating trade war with China will hurt US consumers.

The admission directly contradicts the president’s own claims that only China will pay a price for the tariffs hike, which saw the US increase tariffs on $200 billion worth of Chinese goods Friday following the breakdown of trade negotiations.

Speaking to anchor Chris Wallace on Fox News Sunday, White House Economics Adviser Kudlow said that “both sides will suffer” in the trade dispute.

Wallace had questioned Kudlow about Trump’s claim that Chinese companies would pay for the tariffs, pouring millions of dollars into US coffers.

“In fact, both sides will pay. Both sides will pay in these things,” said Kudlow.

When Wallace put it to him that China wouldn’t foot the bill for tariffs on goods coming into the US, Kudlow said there would be an economic cost for China.

“But the Chinese will suffer GDP losses and so forth with respect to a diminishing export market and goods that they may need for their own,” remarked Kudlow.

Read more: Trump’s negotiating team just gave China a trade-war deadline that could have widespread consequences for the US economy

He went on to concede Wallace’s claim that the costs would be paid by US companies and US consumers.

“Yes, to some extent. Yes, I don’t disagree with that. Again, both sides will suffer on this,” said Kudlow.

Kudlow’s admission comes after the a report last week from consultancy firm the Trade Partnership said that American consumers could be forced to spend $800 a year more on everyday goods as a result of Trump’s trade war, which saw tariffs on $200 billion Chinese goods raised from 10% to 25%.

Trump in a series of tweets Sunday was defiant, claiming that “we are right where we want to be with China.”

“Remember, they broke the deal with us & tried to renegotiate,” Trump wrote in a Twitter post late Sunday.

“We will be taking in tens of billions of dollars in tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-tariffed countries.”

Carl Weinberg, chief international economist at High Frequency Economics, in a research note cited by the Associated Press noted that many of the goods impacted by the increased tariffs are only manufactured in China, so US importers had little choice but to pay the tariffs.

Read more: Trump blames China trade-talk blowup on ‘very weak Democrats’ and the idea he’ll lose in 2020

“So if you need that new iPad, it is you who will be paying the import duty, not some worker in China,” Weinberg wrote.

According to reports Republican advisers think there is political capital to me made out of taking a tough line with China as the 2020 presidential election looms.

Voters in Rust Belt states key to victory in 2020 are supportive of Trump’s China policies, and the president has accused his Democrat challengers as likely to fold to Chinese demands.

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