So let me say, I agree entirely that the tariffs raise consumer prices. Trumps tarrifs plan is indeed insane, and his claims about it being paid by China or whoever are entirely ludicrous.
However, as a technical point, all taxes have a “tax incidence” that you can measure. The tax incidence is the percent of the tax on a corporation, good, service etc that is borne by an entity. It is not always 100% on a consumer except in the most trivial, “consumers pay for everything” kind of way. For competitive or reputational reasons a firm with substantial revenue might decide to absorb some cost, rather than pass it on. In those cases, the tax incidence is not 100% on the consumer, but shared by the business out of their revenue.
I promise though, Trump has the mind of a decomposing tangerine and absolutely could not speak about or understand the subtleties here.
Anyway, politically speaking, I’ll never bring this up again. Please keep hammering Trump however you like and I’ll keep my corrections to myself, lol.
Correct. So in the car example, it really only works if the US puts a tariff on imports, and then they do some kind of government credit for domestic cars. This would raise the price of imported cars while making domestic cars more affordable to Americans.
You’re placing a lot of faith in our totally trustworthy, honest, caring, and cooperative domestic auto manufacturers to…you know…not just look at the new increased price of imports, as well as the government credit for buying domestic…and raise all their prices to that amount across the board, with the increase adding more expense to the consumer directly that is pure profit on their end.
Correct. It was just an example under ideal conditions when everyone involved was acting in good faith, not taking into account capitalism, which demands the graph go up no matter what.
Anyway, either way it demonstrates that tariffs aren’t free money (or even a money making tool) like Trump believes them to be, and the BS he is trying to sell Americans on.
Even domestic cars are assembly in America but the parts come from other countries so no you still going be effected by that.
Also keep in mind there a reason shit not made here. We can’t compete with their cheap labor prices. So even if you tried to move some of those jobs back here it would still cost the consumer a shit ton more money on said goods.
The tariff is paid by the car dealer and passed onto the consumer. As one example.
Consumers pay it, not the overseas manufacturer.
This assumes the thing with the tariff is even available. I can’t buy a Hilux because of the Chicken Tax.
And how the fuck am I even to make a decent technical without a Hilux?
There’s a Second Amendment argument to be made here
Honestly? This would work on this court.
So let me say, I agree entirely that the tariffs raise consumer prices. Trumps tarrifs plan is indeed insane, and his claims about it being paid by China or whoever are entirely ludicrous.
However, as a technical point, all taxes have a “tax incidence” that you can measure. The tax incidence is the percent of the tax on a corporation, good, service etc that is borne by an entity. It is not always 100% on a consumer except in the most trivial, “consumers pay for everything” kind of way. For competitive or reputational reasons a firm with substantial revenue might decide to absorb some cost, rather than pass it on. In those cases, the tax incidence is not 100% on the consumer, but shared by the business out of their revenue.
I promise though, Trump has the mind of a decomposing tangerine and absolutely could not speak about or understand the subtleties here.
Anyway, politically speaking, I’ll never bring this up again. Please keep hammering Trump however you like and I’ll keep my corrections to myself, lol.
You’re cool. I’m happy to hear it. Economics and the stock market are my least favorite and least understood topics.
I’m just tickled to have this better understanding of tariffs and inflation from all the political commentary. Economists keep showing up on podcasts.
“Decomposing tangerine” is appreciated as well. His Cluster B brain is also 80yo brain and doesn’t appear to be weathering life very well of late.
Correct. So in the car example, it really only works if the US puts a tariff on imports, and then they do some kind of government credit for domestic cars. This would raise the price of imported cars while making domestic cars more affordable to Americans.
You’re placing a lot of faith in our totally trustworthy, honest, caring, and cooperative domestic auto manufacturers to…you know…not just look at the new increased price of imports, as well as the government credit for buying domestic…and raise all their prices to that amount across the board, with the increase adding more expense to the consumer directly that is pure profit on their end.
Correct. It was just an example under ideal conditions when everyone involved was acting in good faith, not taking into account capitalism, which demands the graph go up no matter what.
Anyway, either way it demonstrates that tariffs aren’t free money (or even a money making tool) like Trump believes them to be, and the BS he is trying to sell Americans on.
Only kinda, that assumes enough people still buy the imports otherwise there’s no money to transfer over.
Even domestic cars are assembly in America but the parts come from other countries so no you still going be effected by that.
Also keep in mind there a reason shit not made here. We can’t compete with their cheap labor prices. So even if you tried to move some of those jobs back here it would still cost the consumer a shit ton more money on said goods.
A tariff isn’t a money making tool, it’s about making a good not as great a deal against another, typically a domestically made good.
Trump doesn’t understand it though. He plans* to use it to finance childcare.
*As if he would do something like that. Why keep kids fed when you can line your pockets instead.
There’s a sound bite of him at a recent rally talking about how much he hated paying overtime and how he would avoid it.
He doesn’t care.
And I’m sure he doesn’t feel it understand empathy
Cluster B. NPD is not known for empathy.