Donald Trump often complains that the media don’t give him credit for his achievements. And I can think of at least one case where that’s true. As far I can tell, almost nobody is reporting that he has presided over a huge – but hidden – increase in foreign aid, the money America gives to foreigners. In fact, the hidden Trump program, running around $40 billion a year, is probably the biggest giveaway to other nations since the Marshall Plan.
Unfortunately, the aid isn’t going either to poor countries or to America’s allies. Instead, it’s going to wealthy foreign investors.
Before I get there, let’s talk for a second about a claim Trump often makes about a highly visible part of his economic strategy, the tariffs he has imposed on imports from China and other countries. These tariffs, he has insisted again and again, are being paid by China and represent billions in gains to the United States.
This claim is, however, demonstrably false. Tariffs are normally paid by consumers in the importing country, not exporters. And we can confirm that this is what’s happening with the Trump tariffs: Prices of goods subject to those tariffs have risen sharply, roughly in line with the tariff increases, while prices of goods not subject to the new tariffs haven’t gone up.
So Trump’s tariffs aren’t a tax on foreigners, whatever he may think. On the other hand, his other policies have given selective foreigners a huge tax break.