CNBC Anchor Contradicts Key Trump Boast — Foreign Companies NOT Eating Tariff Cost

CNBC anchor Steve Liesman contradicted President Donald Trump’s frequent boast that the United States is taking in yuge amounts of tariff revenue from foreign countries, noting that new data indicates foreign countries are not absorbing the cost.

The president frequently boasts about the revenue “pouring into our country” — $142 billion at last count — but many experts (and Trump critics) say that the costs are being paid by Americans and American companies.

The Bureau of Labor Statistics released a slew of new data Friday morning, including a report that showed import prices rose much more than expected:

U.S. import prices increased 0.4 percent in July, the U.S. Bureau of Labor Statistics reported today, following a 0.1-percent decrease in June. Higher prices for nonfuel imports and fuel imports drove the advance in July.

On Friday’s edition of CNBC’s Squawk Box, Liesman interpreted the data as an indication that the costs of tariffs are being passed on by exporters:

STEVE LIESMAN: And the key about this big question, who’s paying the tariffs? If import prices are up, it means that they’re not paying it overseas.

And I would look at one particular category, just want to find it again, finished goods. Prices for major finished good import categories were mostly up in July.

Import prices for consumer goods increased 0.4% in July.

So at least in the data, we cannot find the idea that foreign exporters are absorbing this price, at least not now. And maybe actually they have somehow used this opportunity to increase prices a little more.

Liesman asked ex-Obama official and Chicago Fed President Austan Goolsbee about the increase, and Goolsbee agreed with his assessment, while cautioning him not to “overreact” just yet:

STEVE LIESMAN: This morning into those import prices to see if they were the exporters were absorbing some of this and and now you don’t see it what is your sense of this of this number this morning usually I don’t know over 23 years of doing this on TV I’ve maybe talked about import prices one or two times before but now it’s kind of important right?

AUSTAN GOOLSBEE: Yeah look we’re out sniffing in all sorts of places that are not normal to have to sniff.

The thing about import prices, to remember, is they don’t include the tariffs. In most of those cases, the tariffs will be on top of it.

So if the foreign exporters to the United States are absorbing the cost, those prices should be going down. If those prices go up and then you add the tariffs on top of it, that’s a little bit the scenario. That’s the unease scenario where, uh-oh, the costs are going up and now we’re in the business of trying to figure out, well, how long are those price increases going to last?

Let’s not overreact to one month of import price data, for sure. Let’s not over react to one-month of CPI or PPI inflation, but it’s at least an area of concern.

The news comes on the heels of a much hotter-than-expected inflation report and an unexpected dip in consumer sentiment, as well as a positive July retail sales report.

Watch above via CNBC’s Squawk Box.