President Donald Trump insists that American consumers and businesses aren’t the ones footing the bill for tariffs.
But economists say that’s not how it works in reality.
One such economist is Peter Schiff who took to X to question the logic behind the tariff system.
“Why don’t American importers refuse to pay the tariffs?” Schiff posted.
“They should tell customs officers to send the bills to China, Switzerland, India, or wherever the products came from. Since Trump assured us that we don’t have to pay the tariffs, why should any of us pay them?”
The post quickly got a lot of attention and sparked arguments online.
One person responded, “Because that’s not how tariffs work. Tariffs are import taxes paid by American importers, not foreign exporters. Telling customs to ‘bill China’ is like blaming the grocery store for food prices set by your own government.”
Schiff replied, “You missed the point of my post.”
Others chimed in with a mix of criticism and curiosity. One person asked Schiff what his solution would be.
He responded, “Massive cuts to government spending and repeal of most federal government regulations.”
Another person suggested shifting away from imports altogether: “They should purchase USA goods instead of importing. To build manufacturing within America is the whole purpose.”
Schiff replied, “Yes, but then the products will be too expensive for customers to buy them. That’s the problem.”
What Tariffs Are Going Up?
Trump’s new round of tariff hikes, set to go into effect this week, will raise import taxes on goods from multiple countries.
Many of those items are common household products, electronics, apparel, and more.
Goods from India, for example, are set to face 25% “reciprocal” tariffs.
Computers and other electronics from countries like Vietnam, Malaysia, and Taiwan are also seeing their rates nearly double.
Swiss watches, a major export to the U.S., will now face a 39% tariff. Wine, whiskey, and vodka from the European Union will be taxed at 15%, up from 10%.
Trump has repeatedly stated that these import taxes won’t hurt Americans. But according to data and expert estimates, that’s not exactly true.
Higher Prices on Everyday Items
In the short term, these tariffs are expected to result in noticeable price increases.
The Yale Budget Lab estimates the new tariffs could make computers and electronics 18.2% more expensive in the short run (2 to 3 years), and 7.7% more expensive in the long run (3 to 10 years).
Clothing prices could spike 37.5% short term and 17.4% long term. Swiss leather goods, including watches, are expected to rise by nearly 40%.
Shoes from China, Vietnam, and Indonesia are facing at least 19% tariffs, with price hikes likely to follow.
And toys? Those could get more expensive too. China and Vietnam are the top toy exporters to the U.S., and with tariffs going up, brands have already warned of potential price bumps.
Furniture, a big-ticket item for many families, is also on the list. Vietnam and China are two of the largest sources of imported furniture, and both are being hit with higher duties.
The Delayed Effect
While prices haven’t surged across the board just yet, that doesn’t mean they won’t.
Many companies have been stockpiling inventory to delay the effects of new tariffs. But once that inventory runs out, prices could jump.
Goldman Sachs economists estimate it takes about eight months for the full effect of tariffs to show up in consumer prices. And businesses that were absorbing some of the costs early on may no longer be able to do so.
Who Really Pays?
The big debate centers around who actually ends up paying the tariffs. Trump has claimed foreign countries do. But in practice, it’s American importers who pay the taxes when the goods enter the country.
Those costs often get passed on to consumers in the form of higher prices.
That’s what makes Peter Schiff’s post hit a nerve. If Trump insists Americans don’t pay tariffs, Schiff asks, why are U.S. importers writing the checks?
The Political Angle
Trump’s team says tariffs are meant to make trade more fair and help the U.S. rely less on foreign goods.
They believe that if imports cost more, American companies will have a better chance to compete.
But critics say tariffs are basically a tax on Americans. They warn people could end up paying more and might have fewer products to choose from.
What To Watch
The impact of the tariffs may grow in the coming months as businesses adjust and begin passing on more of the costs.
Inflation, which had been cooling, could start to creep back up, especially if a trade deal isn’t reached with China by Aug. 12.
For now, shoppers may not feel the full sting at the checkout counter, but experts warn it’s coming.
And as Peter Schiff’s post suggests, the question remains: If the former president says Americans aren’t paying, why are importers still being billed?
IMAGE CREDIT: “Peter Schiff” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.