Can someone please explain to me how tariffs are anything but a tax on the US consumer? Serious question.
The way I understand it…
The US charges a 10-25% upcharge on imported goods. The importers pay that fee, but pass the cost along to us, the consumers. So… we’re essentially paying for the tariffs, right?
I understand that there are more complicated economic policies at play here but I don’t see the upshot. How is this supposed to help? What’s the plan?
The US charges a 10-25% upcharge on imported goods. The importers pay that fee, but pass the cost along to us, the consumers. So… we’re essentially paying for the tariffs, right?
I understand that there are more complicated economic policies at play here but I don’t see the upshot. How is this supposed to help? What’s the plan?
The tariff is supposed to make buying similar American made products more attractive/cheaper. Personally I think with America’s corporate greed un-checked the American product will simply follow the foreign product’s post-tariff cost.
First thing to understand is the tariffs on the cost of the goods..not the retail price. Example is if Target imports a t shirt at a cost of $5 and sells in for $20, that tariff is applied to the $5 and not the $20. Could it result in a price raise…certainly. But it’s not as dramatic as it sounds.
The incentive behind tariffs is to get US companies to source locally. That’s not always an option though.
It’s a complicated system…it’s worth doing some research on because we already have tariffs in place for a lot of goods coming from these countries and more.
I think that United States consumers are going to pay a big price for these tariffs. As a quick example, at least in my part of the country, the U.S. imports electricity from Canada mostly from hydroelectic generation. If this is penalized 10% like it has been proposed by Trump, who pays the increased electrical cost related to the 10% tariff (10% on electricity I’ve read)? Whether it’s electricity to power businesses or to heat homes or even to power public utilities, who will ultimately pay the price for the tariff? You and I.
Canadian electricity has been a good value for consumers for years.
Trump just just goes in there with a know it all attitude and screws that up.
And this is only one example.
Most of the crude oil in the Midwest comes from Canada. Gas prices will be going up for the foreseeable future. Luckily, only a 10% tariff was placed on imported Canadian crude.
Some parts of the country will see no change because their crude is supplied elsewhere.
Besides bringing manufacturing back to the US, apparently the main motivation for the tariffs is to get those countries to do more to curb illegal immigration and drug trafficking. Everyone’s talking about what it could do to our economy. Almost no one is talking about the possible benefits. We shall see how it all shakes out. That’s even if the tariffs go into effect.
Most of the crude oil in the Midwest comes from Canada. Gas prices will be going up for the foreseeable future. Luckily, only a 10% tariff was placed on imported Canadian crude.
Some parts of the country will see no change because their crude is supplied elsewhere.
True in the short term. Longer term since the crude oil market is global and buyers will pursue lower cost crude from other suppliers the price in the world market will increase. Crude pumped in Texas won’t remain local if someone in Europe offers a higher price.
Pushing Mexico and Canada to stop fentanyl and illegal immigration does nothing to address the demand for drugs and cheap labor in the U.S. Expecting other countries to fix our domestic issues doesn’t seem to be a reasonable approach.
Besides bringing manufacturing back to the US, apparently the main motivation for the tariffs is to get those countries to do more to curb illegal immigration and drug trafficking. Everyone’s talking about what it could do to our economy. Almost no one is talking about the possible benefits. We shall see how it all shakes out. That’s even if the tariffs go into effect.
There are other ways economic benefits people don’t talk about. If we impose tariffs (like we have done in the past) on say Chinese steel, that directly correlates to more steel sourced from the US. When Trump imposed steel tariffs in his first term it was a massive economic boost for Minnesota. More jobs, more consumer spending, more taxes being paid, etc.
Like I mentioned above, it’s a complicated system and I won’t pretend there won’t be some negative impacts but the positive usually outweigh them.
I also believe not all of these tariff will stick. This is a shot across the bow…the countries we are levying tariffs against need the US as a trading partner. We are their largest export market. Look what happened recently with Colombia when we threatened tariffs if they didn’t take back their illegal immigrants.
The tariff is supposed to make buying similar American made products more attractive/cheaper. Personally I think with America’s corporate greed un-checked the American product will simply follow the foreign product’s post-tariff cost.
This theory has never been proved to work across a broad range of products.
Also, it is not been taken into account that most manufacturers that are making products outside of the US are serving a market beyond just the US. Let’s say a television manufacturer. They are not just making TVs for the American market, they are making TVs for markets all over the world.
So how likely is it that that manufacturer is going to spend millions or billions of dollars building a separate factory in America just to serve the American market so American consumers can avoid being tariffed?
In reality what is going to happen is simply that Americans are going to pay more for everything. And since all price rises can be blamed on tariffs this will be seen as a great opportunity by corporations all over the world to simply raise prices in America.
We are now going to be subsidizing cheap goods for the rest of the world while we pay more.
Look what happened recently with Colombia when we threatened tariffs if they didn’t take back their illegal immigrants.
They took back hundreds of flights under Biden when they weren’t chaining people up on military flights for photo ops. That wasn’t about taking back illegal immigrants, it was about the method.
<div class=”d4p-bbt-quote-title”>Jimmy Jones wrote:</div>
The tariff is supposed to make buying similar American made products more attractive/cheaper. Personally I think with America’s corporate greed un-checked the American product will simply follow the foreign product’s post-tariff cost.This theory has never been proved to work across a broad range of products.
Also, it is not been taken into account that most manufacturers that are making products outside of the US are serving a market beyond just the US. Let’s say a television manufacturer. They are not just making TVs for the American market, they are making TVs for markets all over the world.
So how likely is it that that manufacturer is going to spend millions or billions of dollars building a separate factory in America just to serve the American market so American consumers can avoid being tariffed?
In reality what is going to happen is simply that Americans are going to pay more for everything. And since all price rises can be blamed on tariffs this will be seen as a great opportunity by corporations all over the world to simply raise prices in America.
We are now going to be subsidizing cheap goods for the rest of the world while we pay more.
Sorry Grouse, but that’s a massive oversimplification of how/why tariffs are imposed.
True in the short term. Longer term since the crude oil market is global and buyers will pursue lower cost crude from other suppliers the price in the world market will increase.
I agree. The longer term is obviously a little more unknown but that’s the theory.
As we approach spring, there are other factors that will cause gasoline to go up too like increased travel/demand and the conversion to the “summer blend” by May 1.
Most of the oil the U.S. produces, you can’t refine. You export it to the world market. Oil imports from Canada and Mexico make up 71 percent of U.S. oil imports. Your refineries are set up to process our heavier oil.
<div class=”d4p-bbt-quote-title”>chamberschamps wrote:</div>
The US charges a 10-25% upcharge on imported goods. The importers pay that fee, but pass the cost along to us, the consumers. So… we’re essentially paying for the tariffs, right?I understand that there are more complicated economic policies at play here but I don’t see the upshot. How is this supposed to help? What’s the plan?
The tariff is supposed to make buying similar American made products more attractive/cheaper. Personally I think with America’s corporate greed un-checked the American product will simply follow the foreign product’s post-tariff cost.
I very much agree with that last sentence. It’s not the way of corporations/ businesses to sit back while others in their industry raise prices and not do the same. We saw that during the pandemic years; some companies had legit reasons to raise prices (extreme supply chain issues, demand, etc) while plenty of others simply saw other companies charging more money and said “i want to do today too.”
Thanks for the info and respectful discourse.
Still sounds to me like a we as a country want to accomplish something and the populous is going to end up paying more to get it.
<div class=”d4p-bbt-quote-title”>Matt Moen wrote:</div>
Look what happened recently with Colombia when we threatened tariffs if they didn’t take back their illegal immigrants.They took back hundreds of flights under Biden when they weren’t chaining people up on military flights for photo ops. That wasn’t about taking back illegal immigrants, it was about the method.
I couldn’t find anything stating Biden deported migrants back to Colombia. Not saying he didn’t but when I searched I found nothing.
But, bottom line is the tariffs forced Colombia to blink. We are their largest export partner. Whether you believe it’s a sound strategy can definitely be argued though.
I couldn’t find anything stating Biden deported migrants back to Colombia. Not saying he didn’t but when I searched I found nothing.
I don’t think you looked very hard.
But, bottom line is the tariffs forced Colombia to blink.
Sure, it’s an insane solution to a problem we made that had a much simpler solution. I just don’t think that’s a good argument in their favor.
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Hah…I must not have. It does beg the question why Columbia took the flights under Biden and not Trump. Seems like they are mad because they were military flights and they handcuffed them.
I agree it’s not a good strategy to get into pissing matches with our allies and trading partners…we agree there. I’m just pointing out the tariffs threat made a difference.
Here’s a very lengthy breakdown of tariffs since 2018…the group that puts this together seems to be a reliable and non-biased source but do your own research, too.
It does backup the argument that ultimately the US consumer/tax payer foots the bill. So, hopefully most of these tariffs are posturing but historically the tariffs with China have held and were even raised under Biden.
KarryKyllo u are the one with the know it all attitude! In his first term trump imposed tarrifs on other countries particularly china. During that time the american people enjoyed a strong economy and low prices on everything. The u.s became oil independent and more companies started producing goods in the u.s. America is going to be great once again.
Sorry, but no, it really isn’t oversimplifying anything. The use of terrriffs as a way to force manufacturing across a broad range of products back to the domestic side has never been proved to work.
If you’re referring to using tariffs to try to force Canada and Mexico into more effectively dealing with criminal activity on their side of the boarder, I’d say this is an expensive and questionably effective way to try to accomplish that. Americans pay higher taxes to force Canada to put more drug dealers out of business? Wouldn’t it be smarter to try other routes first?
The reality is this is going to hurt the very folks that put Trump into office because he promised to reduce inflation. These tariffs will increase prices but do nothing to solve the border issues we have.
The reality is this is going to hurt the very folks that put Trump into office because he promised to reduce inflation. These tariffs will increase prices but do nothing to solve the border issues we have.
And the tariffs do nothing to address inflation other than perhaps making it worse. Time will tell.
There are Multiple ways to look at this. Many valid points raised. I think inflation/price increases, taxes, money in people’s pockets can be addressed by his policies. We KNOW that the previous administrations efforts at stimulating the economy were disastrous. You don’t print billions of unsecured funds and flood them into the economy for free to stimulate people buying things. As stated above and many times before ( by myself and others) companies are in it for the profit that’s why they exist. Billions of extra dollars to chase after the same amount of supply was GUARANTEED to result in higher prices to us the consumer – period.
I believe one of trumps goals is to eliminate the hundreds of billions we spend on the illegal immigrant problem. That will save us money for other projects that will help our citizens we are currently not funding.
Making other countries fully fund their defense instead of us paying for their protection will save us billions. These other countries provide enormous social welfare nets for their populations cause we’re footing their security bill. That will stop. Tariffs are one heavy handed approach to make them comply. Will they work long term _ not certain as their are side effects as mentioned already. We are on the wrong end of the stick for many things because we are seen as weak on the world stage and countries/regimes/ dictatorships can take advantage of us. I believe Trump is more of an isolationist at heart and puts us first. Oil production, bringing manufacturing back, making our military stronger, re-defining education to get us back to respectability, growing jobs for our own citizens and many other goals he has all need to be implemented quickly and decisively.
He has two years to make a difference. Otherwise we go back to trans gender surgeries, bankrolling welfare programs and check the box hiring. We see where that got us. Common sense is a welcome concept. Regardless of anyone else’s opinion. The cost for ALL of us to fix California is going to be massive. Stupid policies around forest management water management and business policies that drove away insurance companies and DEI hires have shown that a more “common sense” approach could have averted this disaster or SIGNIFICANTLY reduced its impact but I will be stuck paying for their incompetence through higher prices for many things.
MY HUMBLE OPINION
Sorry, but no, it really isn’t oversimplifying anything. The use of terrriffs as a way to force manufacturing across a broad range of products back to the domestic side has never been proved to work.
If you’re referring to using tariffs to try to force Canada and Mexico into more effectively dealing with criminal activity on their side of the boarder, I’d say this is an expensive and questionably effective way to try to accomplish that. Americans pay higher taxes to force Canada to put more drug dealers out of business? Wouldn’t it be smarter to try other routes first?
Like I said above, I don’t agree with getting into pissing matches with our trading partners and allies. It’s not a great long term strategy but we’ll see if it gains us any leverage which I think is what Trump is looking for.
It is an oversimplification if for one reason the tariffs have positive impacts in certain areas. Sure, taxes may increase generally but certain sectors of the economy gain tremendous benefits from tariffs. US steel manufacturers are a great example which I care tremendously about because most of my in-laws are on the iron range and work in the mines.
I copied in that analysis because you are correct that on a macro level the tariffs aren’t beneficial. This is why I believe the tariffs will likely hold for China but not the others. I’d also be surprised if we don’t create more beneficial trading agreements with other countries like we have done S Korea in the past.
The challenge for the US is we are, and always will be, a net importer. While that may create some leverage with our spending power it also creates disadvantage where we need to import goods and have few options.
We KNOW that the previous administrations efforts at stimulating the economy were disastrous. You don’t print billions of unsecured funds and flood them into the economy for free to stimulate people buying things.
I’m not sure which previous administration you’re referring to here.
Think recent……
i dont know but from what i understand is he imposed these tariffs to fight illegal drugs and immigrants for the most part…..yes there’s the American bit to.
i hear gas could raise from 50 to 70 cents per gallon…..and the price of produce is gonna soar
either way i’m convinced we the consumer are going to pay the price.
just my opinion!!
Until 1913 we had no federal income tax. Tariffs was a big revenue source for us back in the early days.
Trump has doubled down on wanting to get rid of federal income tax.
I totally get the tariffs on Mexico. I wouldn’t consider them an alley at all. Actually with the China influence going on in Mexico and other South American countries I would say the opposite.
As far as Canada goes. Not sure if that one was a smart decision. If you take out energy we are a net positive exporter to Canada.
BTW there are no TVs manufactured in the US these days. Zenith was the last and they stopped in 1988.
<div class=”d4p-bbt-quote-title”>Umy wrote:</div>
We KNOW that the previous administrations efforts at stimulating the economy were disastrous. You don’t print billions of unsecured funds and flood them into the economy for free to stimulate people buying things.I’m not sure which previous administration you’re referring to here.
Yeah, I’m not tracking with this one either. What do you mean, Umy?
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