IT TOOK A pandemic for the White House to admit a basic economic reality: Tariffs on goods imported into the United States are paid by Americans. That's something that pretty much everyone outside of President Donald Trump and White House trade adviser Peter Navarro already knew. But for nearly two years--ever since Trump launched his trade wars in March 2018--the president and his defenders have stubbornly claimed, contra both theory and evidence, that the duties are absorbed by China and other exporters.
Despite that insistence, Trump on April 18 signed an executive order that will grant some American businesses a three-month deferral on paying tariffs. This will provide some "payment flexibility" for American importers facing "significant financial hardship" due to the COVID-19 outbreak and an ongoing economic shutdown, the administration said.
In its limited form, the new tariff policy is roughly akin to the administration's earlier move to defer the federal income tax filing deadline from April 15 to July 15: People and businesses will still have to pay, just not right now. Even still, Trump stubbornly refused to grant deferrals for certain industries. His executive order does not apply to the duties on steel, aluminum, and goods made in China that have been the centerpieces of Trump's trade war. In practice, the policy applies to about half of all tariffs charged to American importers.
That creates a new plot hole in the ever-evolving justifications for...