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White House trade adviser Peter Navarro said on CNN's "State of the Union" Sunday that tariffs on Chinese goods are not hurting consumers in the United States, despite reports to the contrary from researchers at Harvard, the University of Chicago, the International Monetary Fund, the Federal Reserve of Boston and more.

JAKE TAPPER: "You and the administration keep saying the entire burden of these tariffs and this trade war is being bore by China. A study from researchers at Harvard, the University of Chicago, the IMF and the Federal Reserve of Boston in May found that U.S. importers are shouldering about 95% of the price change from tariffs, and China is shouldering only 5%. Are you saying their research is wrong?"
NAVARRO: "You put on 10% tariffs on $200 billion. And China devalues its currency by 12%. Are consumers bearing anything on that? No. We have seen absolutely no evidence in the price data. It's not showing up in the consumer price index."
TAPPER: "If these tariffs aren't hurting anyone in the United States --"
NAVARRO: "They're not hurting anybody here."

Why it matters: The Trump administration announced last week that the impending 10% tariffs on $300 billion worth of Chinese imports would be delayed from Sept. 1 to Dec. 15 for certain products. Trump and other aides explained that the delay is intended to help consumers who might be affected by tariffs during the holiday season — suggesting that the administration does, in fact, agree with experts that the trade war is harming Americans.

  • Navarro said on CNN that business owners told Trump they had bought holiday goods in dollar-based contracts, meaning they had no ability to shift the tariff burden to China. He added that they promised Trump to move their supply chains out of China as fast as they can after the tariff delay.
  • "The president made a wise decision," Navarro said "Build goodwill with the Chinese, which protects consumers from any possible Christmas impacts. And once we get past that, these businesses are doing their contracts in a way that won't hurt consumers."

Reality check: July's core consumer price index rose 0.3% from the previous month and 2.2% from a year earlier, meaning there has in fact been inflation, Bloomberg reports. Navarro also disputed that the yield curve had inverted earlier in the week, saying that it had merely flattened. This is not true.

  • Yields on 10-year Treasuries on Wednesday fell briefly below yields on 2-year Treasuries, which fits the definition of an inverted yield curve. Navarro seems to argue that the inversion needed to be larger in order to be legitimate, but investors clearly disagreed — with the stock market on Wednesday falling 800 points in its worst day of 2019.

The big picture: Navarro and White House economic adviser Larry Kudlow took to the Sunday morning talk shows in an effort to ward off public fears of an upcoming recession. The stock market saw a huge sell-off last week after the yield curve inversion, a warning sign that's predated every recession for the past 50 years.

  • Navarro argued on ABC's "This Week" that "we're going to have a strong economy through 2020 and beyond with a bull market," predicting future rate cuts by the Federal Reserve, monetary easing by Europe and economic stimulus by China, and the potential passage of the U.S.-Mexico-Canada Agreement by Congress in the fall.
  • Kudlow said on NBC's "Meet the Press": "Consumers are working at higher wages, they are spending at a rapid pace, they're actually saving also while they're spending. That's an ideal situation. So I think actually the second half of the economy is going to be very good in 2019. No I don't see a recession."

Go deeper: Toymakers say Trump's China tariff delay "saved the holiday season"

Go deeper

Updated 5 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Pfizer and Moderna boosters overwhelmingly prevent Omicron hospitalizations, CDC finds — Omicron pushes COVID deaths toward 2,000 per day — The pandemic-proof health care giant.
  2. Vaccines: The case for Operation Warp Speed 2.0 — Starbucks drops worker vaccine or test requirement after SCOTUS ruling — Kids' COVID vaccination rates are particularly low in rural America.
  3. Politics: Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies — Federal judge blocks Biden's vaccine mandate for federal workers.
  4. World: American Airlines flight to London forced to turn around over mask dispute — WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older — Austria approves COVID vaccine mandate for adults.
  5. Variant tracker

Arizona governor sues Biden administration over COVID funds tied to mandates

A teacher prepares a hallway barrier to help students maintain social distancing at John B. Wright Elementary School in Tucson, Arizona, on Aug. 14, 2020. Photo: Cheney Orr/Bloomberg via Getty Images

Arizona Gov. Doug Ducey (R) filed a lawsuit Friday against the Biden administration for ordering the state to stop allocating federal COVID relief funds to schools that don't comply with public health recommendations such as masking, the Arizona Republic reports.

Why it matters: The Treasury Department said last week that the state would have to pay back the money if Ducey does not redesignate the $173 million programs to ensure they don't "undermine efforts to stop the spread of COVID-19."

Federal judge blocks Biden's vaccine mandate for federal workers

President Biden speaking from Eisenhower Executive Office Building on Jan. 21. Photo: Yuri Gripas/Abaca/Bloomberg via Getty Images

A federal judge in Texas blocked the Biden administration from enforcing its coronavirus vaccine mandate for federal workers on Friday, citing the outcome of last week's Supreme Court ruling that nullified the administration's vaccine-or-test requirement for large employers.

Why it matters: It's a blow to President Biden's efforts to increase the U.S.' vaccination rates, though much of the federal workforce has already been vaccinated against the virus.