Trump owns rise in prices, says tariffs hurting China more

President Donald Trump on Wednesday acknowledged Americans for a while might have fewer and costlier imported goods available, but said China will face tremendous difficulty in a trade war. Speaking during a cabinet meeting, he said children might hypothetically have two dolls instead of 30, but his tariffs were keeping the U.S. from being “ripped off” until new trade deals could be made. Trump in a social media post further defended his economic policies, saying the United States was still feeling the fallout of former President Biden’s economy. A tariff-induced boom would eventually begin, he said.

What prompted this discussion? Trump’s comments came in the wake of a Wednesday Commerce Department report which showed GDP dropped at an annualized rate of 0.3% for the quarter that ended in March. The decrease—the first in three years—was primarily due to increased imports and decreased government spending. Increases in investment, consumer spending, and exports partially offset the drop, according to the Commerce Department.

In the evening Wednesday, the Senate came close to approving a Democratic resolution to block Trump’s global tariffs, only failing to pass it in a 49-49 vote. Three Republicans, Sens. Susan Collins of Maine, Lisa Murkowski of Alaska, and Rand Paul of Kentucky, joined Democrats to vote against tariffs.

What are the current tariff rates? The United States is currently adding a 145% tariff to imports from China, according to a White House fact sheet. China levied 125% tariffs on American goods, but it recently created a list of exempted U.S. products and is quietly notifying companies of the policy, Reuters reported. At Chinese factories, goods were piling up on factory floors, the BBC recently reported.

Dig deeper: Read financial adviser David L. Bahsen’s Opinions column on Trump’s tariffs.