File photo taken in November 2017 shows U.S. President Donald Trump (and Chinese President Xi Jinping attending a welcome ceremony in Beijing. 
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Evidence knocks down Trump claims on China, tariffs (again)

Updated

Late last week, Donald Trump called into Fox News for a rambling, 53-minute interview in which the president made an astonishing number of ridiculous claims. Among them, however, was a familiar refrain.

“We’re taking in hundreds of billions of dollars in tariffs [from China],” Trump said. “We never took in 10 cents. We are not paying like, you know, you – they fed the line, you know, the media fed the line about us paying.”

All of this, of course, was wrong. In reality, for example, we’re not taking in hundreds of billions of dollars in tariffs from China. What’s more, we have taken in more than “10 cents” from Beijing in years past.

As for blaming “the media” for telling the public that American consumers are actually paying for the White House’s tariffs on Beijing, journalists aren’t the only ones telling people the truth. Liberty Street Economics published this report yesterday, answering a straightforward question: “Who Pays the Tax on Imports from China?”

Tariffs are a form of taxation. Indeed, before the 1920s, tariffs (or customs duties) were typically the largest source of funding for the U.S. government. Of little interest for decades, tariffs are again becoming relevant, given the substantial increase in the rates charged on imports from China.

U.S. businesses and consumers are shielded from the higher tariffs to the extent that Chinese firms lower the dollar prices they charge. U.S. import price data, however, indicate that prices on goods from China have so far not fallen. As a result, U.S. wholesalers, retailers, manufacturers, and consumers are left paying the tax.

As Catherine Rampell noted, “This is at least the fifth independent analysis finding that Americans are bearing the cost of Trump’s tariffs.”

And yet, with unnerving frequency, the president keeps telling Americans the opposite, reality be damned. All of which brings us back to a question that’s difficult to answer: does Trump actually believe the nonsense he keeps asking us to believe?

As we discussed several months ago, there are really only two possible answers. The first is that the president understands reality and peddles this odd lie as part of a cynical scheme to deceive the public. The alternative is that Trump, even now, doesn’t yet understand the most basic details of his own trade agenda – ostensibly one of his signature issues, on which he claims to have vast expertise.

So, which is it? Axios spoke to several current and former administration officials earlier this year, asking whether Trump actually believes his falsehood. The “consensus” was the president has been entirely sincere, touting the falsehood because he chooses to believe it’s true.

One former aide told Axios that trying to encourage Trump to accept reality is pointless because the president’s bogus beliefs are “like theology.”

This is, of course, deeply depressing for reasons that have little to do with the economy, and everything to do with Trump’s capacity for learning. One of the most important jobs a president has is consuming an enormous amount of information and being able to separate what’s true from what’s false, what’s credible from what’s dubious, and what’s important from what’s trivial.

It requires excellent judgment and intellect. It’s also proving to be the part of the presidency that Trump struggles with most.