AP FACT CHECK: Trump's trade theories don't hold water

WASHINGTON (AP) — President Donald Trump cast a fog of misinformation over the U.S. trade dispute with China, floating inaccurate numbers and skewed economic theories as big tariffs kicked in on Chinese goods.

At stake in the rupture is a trading relationship between the world's two largest economies that employs nearly 1 million Americans, supplies affordable goods to U.S. households and, in the view of Trump and a bipartisan group of trade hard-liners, puts U.S. business at an unfair disadvantage.

Trump's torrent of tweets on the subject Friday followed a rally infused with familiar falsehoods about his achievements (the economy, veterans' health) and grievances (the Russia inquiry). A look at his words over the past week:

TRADE

TRUMP: "Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S." — tweet Friday.

THE FACTS: This is not how tariffs work. China is not writing a check to the U.S. Treasury. The tariffs are paid by American companies, which usually pass the cost on to consumers through higher prices. One of the theories is that the higher prices will encourage consumers to buy goods made in the U.S. or elsewhere instead. But the risk is that consumers could simply respond by spending less than they otherwise would, which would hurt growth.

The burden of Trump's tariffs on imports from China and other countries falls entirely on U.S. consumers and businesses that buy imports, said a study in March by economists from the Federal Reserve Bank of New York, Columbia University and Princeton University. By the end of last year, the study found, the public and U.S. companies were paying $3 billion a month in higher taxes and absorbing...