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Kevin Hassett at a Press Gaggle: How Americans See Revenue from Tariffs

March 8, 2025 · Forbes Breaking News · 0:03:08

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What happened

At a White House press gaggle, National Economic Council Director Kevin Hassett was asked how Americans see revenue from tariffs when the cost is often explained as being paid by importing companies and passed to consumers. Hassett answered with tax-incidence economics, as he stated it: if you put a tax on something that is elastically supplied, the supplier bears the tax, and the most inelastic thing in the global economy is Chinese supply, so if the United States puts a tariff on Chinese supply, the Chinese bear it.

He said, as he stated it, that Chinese producers cannot avoid this by moving capital out of the country because China has capital controls, and he added that Chinese production runs on coal-fired electricity, making the tariff effectively like a carbon tax as well. He argued that people who say tariffs hit consumers have not done basic Economics 101, as he stated it.

Pressed on businesses saying they must raise prices, Hassett attributed current price pressures to the prior administration’s excess deficit spending — $2 trillion last year, as he stated the figure — whose inflation effects remain visible until the reconciliation bill that cuts spending passes. He illustrated incidence with a candy-bar example: if a tax is added and the price stays at a dollar, the store keeps 90 cents and pays the 10 cents, which he said matches exactly the characteristics of the Chinese economy, as he stated it.

Why it matters

The gaggle is Hassett’s most compact statement of the administration’s tariff-incidence doctrine — the claim that inelastic Chinese supply means Beijing, not the American consumer, pays — delivered as an economics lesson to the press corps.

Sources: Forbes Breaking News, “National Economic Council Dir. Kevin Hassett Asked: ‘How Are Americans Seeing Revenue From Tariffs?’”, 2025-03-08 (official upload, embedded above; published 2025-03-08). Transcript via Supadata (private research store, paraphrased and attributed, not republished). All figures and characterizations as stated by the speakers.