Everyone has been getting sold that these tariffs are on "China" or fill-in-the-blank on what country we're "getting" with them.
The reality is that's a fundamental misunderstanding of what a tariff is.
There is a reason you will find tariffs drop off after the great depression. They make everything more expensive for businesses and in turn, the end consumer.
It is baffling to me, as it is no different than thinking that "sugar taxes" are taxes that soda companies pay. There is even a straight forward analysis that shows it does impact the soda companies rather heavily. But it is objectively paid by the consumers. And nobody is really confused by that.
Right, and sugar taxes are an example of a tax where there's a clear objective. To avoid the tax, don't put sugar in things if you can help it. Result: Products which had sugar because it was cheaper don't any more because of the tax, it's not cheaper now.
These tariffs have a huge red flag because there's no objective. Onshoring? No, wait, we got a new deal the tariffs are removed. New trade deals? No, wait, somebody wrote a mean Tweet about Donald so the tariffs are back and the deal is off.
Tariffs to produce market effects (like onshoring) only work if those tariffs are observed to be durable (in four years all these tariffs will evaporate) and are strengthened by being paired with other encouragement (i.e. industry development subsidies).
These tariffs are arbitrary and capricious and no business would rationally respond to them with any kind of long term investment. People just want to weather the storm of the mad king and international partners are developing alternative relationships to seek more stability.
And if tariffs don't work, he'll just defund whatever aid you're receiving or project you're building or life saving research you're doing or critical job you're performing.
And if the cost if lives or dollars or reputation is enormous, he'll still sleep like a baby.
It's cool though, you can probably get a few billion in funding if you "lobby" a few million to the right people. The tariffs exist, imo, primarily as a threat to induce bribes for loopholes (e.g. the smartphone loophole).
There's a case in process that'll likely resolve in the next two months. Quite a few companies have filed suite banking on getting their fees reimbursed.
In the current political climate nothing is certain - but this will likely come to a resolution in the near term.
Pretty much every tax is ultimately paid by the consumer, because all the suppliers have to make a profit or they won't stay in business. The point of an import tariff isn't to make anything cheaper, it's to level the market in the presence of a foreign supplier who has much lower costs (e.g. sweatshop labor, state-supported industry, etc.) that are not available to domestic suppliers.
The problem is that the tariffs are so broad in ways that don’t help US industry; and there are few supply chains wholly within the US so you end up hurting US manufacturing as well.
It doesn’t really make sense, for example, that we slapped tariffs on Madagascar, when the primary reason we run a trade deficit with them is that they grow vanilla which cannot be grown in the US.
If the supplier is forced to leave the business, that is a form of paying. They are losing a source of income and will have to pick a different activity that they are not efficient at. In the case of tariffs on international trade, the supplier loses a chunk of market - in the case of the US, one that was wealthy - and that always means a loss for the business.
The burden of ALL taxes falls on both sides of the transaction. The proportion of the burden varies with market conditions, the most important being elasticity.
That's why studies like the OP are necessary, to determine how much the proportions are. Honestly I am not surprised with the result, tariffs are objectively bad. Curbing trade is bad by default.
I would love to see joint tarrifs, together with US allies, to fight against things like sweatshop labor, state-supported industry, etc. That would really send a signal that those things are unacceptable, and lead to change.
That's not what we have here, and that's not what the Trump tarrifs are perceived as internationally.
The trouble with sugar taxes is it does drive soda-company behaviour. A. G. Barr killed the real Irn Bru in 2018 to avoid the Scottish sugar tax.
It could've passed on the tax to the consumer, but it didn't. It has ceased making its iconic beverage and now only sells a variant that tastes crap. No amount of money can bring the good stuff back. The sugar tax killed it. The world is now a slightly worse place, thanks to government interference.
(I'm sure there's a way to extrapolate this anecdote back to tariffs)
The sibling point that talks about the goal of the tax hits the idea you are talking about, I think. And this is what I meant saying you can show they can impact the soda companies. But regardless of any downstream effects of the tax existing, the tax is paid by the consumer.
> It is baffling to me, as it is no different than thinking that "sugar taxes" are taxes that soda companies pay. There is even a straight forward analysis that shows it does impact the soda companies rather heavily. But it is objectively paid by the consumers. And nobody is really confused by that.
Businesses like to say that, to get consumers to back them politically, but it's not at all true:
When input costs increase, a seller must decide whether to take the extra expense out of their profit or to increase the price (or some mix of the two).
Taking the extra cost out of their profit obviously decreases profit.
Raising the price decreases sales (consumers won't buy as much at a higher price), which decreases profit. The change is not linear (look up demand curves). The seller, if they are smart, already found the price that maximizes revenue. Therefore changing the price will reduce revenue.
In reality, it's not such a science and there are other factors. Another fundamental factor is price elasticity of demand, which is how much a change in price affects demand. For sugary drinks, quite a bit - people can forgo them. For lifesaving healthcare, elasticity is less, for obvious reasons.
If rent or business taxes go up, the business may either eat the cost or eventually raise the main price, they don’t tack a “rent offset fee” on the final bill. But with tariffs, up to a point the business dgaf because they just pass it through as a separate “junk fee” line item.
> If rent or business taxes go up, the business may either eat the cost or eventually raise the main price, they don’t tack a “rent offset fee” on the final bill. But with tariffs, up to a point the business dgaf because they just pass it through as a separate “junk fee” line item.
It's always kind of enlightening to see exactly what things businesses choose to explicitly pass on to the customer, and what things they just eat as a cost of doing business. It's often very political and performative.
Some restaurants in California have taken to adding a "Living Wage Fee" to restaurant bills as a way to protest having to pay their employees proper wages. They could have just eaten the cost and raised their food prices slightly, but instead they chose the passive-aggressive route, complaining about it via the bill, which the customer sees. Presumably to try to convince the customer that "Living Wage" politics are bad and that they visibly raise the price the customer pays.
But, when the county raises their property taxes, the same restaurants just eat the cost. They don't add an "Unfair Property Taxes" line item to their diners' bills.
Yet that's not what the administration says about the subject. They're either confused or they're lying (and the people who support them and regurgitate their talking points are confused).
I don't think I can beat the drum of "they are liars" heavily enough. It remains frustrating to see so much accidental carrying of water for them as people look for a hint of legitimacy.
I don't think they're confused or lying. I think they're ideologically driven buffoons, the preferred recruits of all fascist administrations. They don't care about American manufacturing, and they don't understand economics. They want to advance their agenda.
Like, even the propaganda by fascists claiming fascism makes for good policies is bad. Germany under the Reich, completely setting aside the human atrocities, was a fucking SHIT SHOW of a nation state.
That’s not the intent. It could be a more defensible intent if it was paired with a Biden-style program to develop domestic manufacturing capabilities, but that never happened and if it did it would be targeted. Raising taxes on chocolate, vanilla, and coffee, for example, doesn’t affect China and doesn’t change the fact that those don’t grow well in the continental United States (and Hawaii / Puerto Rico don’t have the capacity).
What’s worse, this often raises domestic prices: unless we have robust competition, taxing imports just raises the ceiling for what an existing manufacturer can charge while the uncertainty discourages investment in new capacity: moving entire supply chains takes years and the tariffs changing frequently means that anyone financing it has to price in their competitive edge disappearing if the right cryptocurrency purchase gets the tariff rescinded.
> The intent is to make that stuff more expensive so we can compete.
This would seem to be an admission that the domestic product is inferior, otherwise why would it be necessary to burden the import with tariffs?
In any case, if that's the intent, it's not working out for fairly predictable reasons. Lots of imported goods have no domestic equivalent. The factories required to make them require years of investment, which is not forthcoming, because the longevity of these tariffs is highly dubious and the government is doing nothing to encourage business development. And even if there were new factories, they would have to import machines and raw materials, which are of course tariffed, driving up the cost of domestic goods, and defeating the alleged purpose of the tariffs.
There's no just explanation that can make the tariffs look useful to anyone. Like everything from this administration, it's about the appearance of action.
There’s plenty of action. Actions have amply demonstrated that the purpose of the tariffs is to extort other concessions from countries, or simply to punish them for perceived insults against our leader. This is pretty obvious based on how they are set at arbitrary levels, deadlines are set and deferred, amounts are set and changed unrelated to any economic explanation (“I didn’t like the way she talked to us”), etc.
They’re just an easy cudgel to use against an entire country at whim, at least until the rest of the government delegitimizes the “emergency” excuse being used to impose them.
Essentially the President regards everything as either a zero-sum no-holds-barred negotiation with him as the primary beneficiary, or as some kind of real-estate deal (see his Davos speech about how we’re “leasing” Greenland). Tariffs are just a great general-purpose stick he found a way to wield.
Their argument is so fundamentlaly false though. If the idea is to make American businesses more competitive, why tariff raw materials? That raises the cost of American goods. It makes us less competitive. They are either very bad at this, or the purpose of the tax is different than advertised.
If one country has labor protection and pollution regulations, and another country has near-slave labor and dumps chemicals into rivers, would you consider the former inferior? Unable to compete?
It’s fairly funny to a european that it isn’t immediately clear which half of the comparison is intended to apply to the US, and which half is supposed to apply to China.
Most consumers don't care about the conditions under which a product is made. Whining about labor practices is just an excuse for making an inferior product.
> Actually people are being murdered for real, lots of other real stuff as well
They are. My point is not that the administration isn't having a real impact, but rather that they the administration doesn't care about the real impact, positive or negative. They care only that they get the headline.
No. The point is to make foreign goods more expensive in order to bring production back to the US. People who don't realize this point out who is actually paying and claim its a problem.
Will this bring manufacturing back? It seems to be working to some extent, but its a risk to manufacturers because the whole thing could get reversed after an election.
The whole thing could get reversed on a daily basis as this admin commits massive graft, carving out loopholes & rollbacks for their buddies companies/industries/etc..
Not to mention the incoherence that one day its a tool to bring jobs back, the next day its just a negotiation tactic so they get reduced/dropped on a country by country basis over and over.
> Not to mention the incoherence that one day its a tool to bring jobs back, the next day its just a negotiation tactic so they get reduced/dropped on a country by country basis over and over.
I thought it was retaliation for Canada not doing enough to stop their 20-odd kilogram contribution to the 4 tons of fentanyl smuggled in every year? [0]
(Which is to say I agree with you. Just trying to support your point that the reasoning has been so completely all over the map that anybody trying to assign any real meaning seems delusional. At this point I think most people have entirely forgotten half the reasons that have been made up along the way.)
The "smart MAGA" guys always crack me up because by the time they craft an intellectual justification for his previous moves, he has pivoted/reversed and pantsed them once again.
Frequently we get the "he's been poor advised" fallback as well.. Good Czar, Bad Boyars.
That doesn’t mean manufacturing is down, if new output is automated.
The trade deficit is shrinking, and which necessarily means there is more domestic flow as foreign hoards of dollars are liquidated. That flow has to go somewhere.
> That doesn’t mean manufacturing is down, if new output is automated.
You are correct. Of course, if new output is automated, then the purported goal of the tariffs (more manufacturing jobs!) is defeated.
The fact that any new manufacturing will of course be automated shows how little thought went into designing these tariffs and how transparently false the administration's promises are.
> The trade deficit is shrinking
This is totally irrelevant. The size of the trade deficit does is a red herring.
The trade deficit is shrinking because fewer goods are being imported. Producing countries are finding alternate markets that are outside of the US' punitive tariffing.
Perhaps because the inputs to domestic manufacturing are currently more expensive. Actually increasing manufacturing capacity first requires construction and capital expenditure. I'm not sure how those metrics are doing.
> domestic manufacturing are currently more expensive
Because factory machines and raw materials are being tariffed. Also because a source of cheap labor (immigrants) is being excised.
> Actually increasing manufacturing capacity first requires construction and capital expenditure.
It certainly does. And companies are rightfully hesitant to invest, because the legally dubious basis for the tariffs may not survive this month, much less into the next administration.
That is one of the given reasons, but as with everything else about these tariffs, it's nonsensical:
1. It isn't now, nor has it ever been, the role of the federal government to dictate what types of jobs exist in the private sector.
2. Even if this was the end goal, making it easier and more affordable to manufacture in the US would be far better for all parties involved rather than brute forcing it through arbitrary taxes.
My spouse and I regularly import vintage toys and collectables from Asian countries. We've paid hundreds of dollars in tariffs on items that this point about manufacturing doesn't apply to at all
Is the US administration hoping to increase (digital) camera production in the US? Camera lenses? Is there a moribund American camera industry that could thrive if given a chance?
During Trump 1.0 he raised tariffs on steel and got 1k job in steel manufacturing… but lost 75k jobs in manufacturing that used steel as an input:
I work at a manufacturing supplier (packaging and logistics) and our business has been on fire since the trade war kicked off. Pre-COVID we were at ~$25MM yearly and now we are $150MM+ and growing steadily.
We just bought a million sq ft building (that was an old RCA plant) and millions in new machinery to keep up.
It’s not entirely clear to me why tariffs would help your local logistics businesses? Doesn’t the same amount of stuff get moved around , just changes origin? I believe you I just would like to understand
What has been the impact on the distribution in the firm. Have more staff been hired, have more supply contracts been handed out, have worker bonuses increases or has it all flowed to the bottom line?
This is the other side of tariffs that few discuss. It may put import prices up, but it also increases the domestic flow of income.
Which means that those who rely solely on imports pay the cost and those who make the domestic supply get an increase in income as an offset.
We've doubled (or more) in headcount. Mostly in the 'special projects' area (complex shippers, partitions, pallets, parts movers, etc) and truck drivers (we have our own trucking company)
Our prices are primarily pegged to what brown paper is (used to make corrugated) which ebbs and flows. Our prices were affected a little because a lot of pulp and raw material comes from Canada (they sell soft wood incredibly cheap... it's actually been a point of contention in our treaty for decades) but the cost change has been fairly slight (close to inflation).
Labor prices have gone up a decent amount and so has health care. We've found savings in increased efficiency due to scaling up production (there are some big fixed costs wrt machinery that becomes a smaller piece of the pie with increased production).
Nobody imports boxes... cost of transport is more than the product which is why almost all box makers have regional plants.
Of course, with the on/off again nature of these tariffs, the Supreme Court challenge and the fact that practically every country is being tariffed, uncertainty in the business world is epic right now. This uncertainty makes it difficult for manufacturers to see out 6 months, nevermind years down the road. Besides, it would take years to re-shore most manufacturing operations, some supply chains are very complex and the result of years of tuning and adjustments. This is not an overnight migration, as is being intimated. Frankly, I wonder if this is just a money-grab at the expense of the American consumer.
That’s not the way they are presented at all.
And making foreign goods much more expensive when we don’t currently produce enough of those products domestically to offer actual alternatives is a clear harm to consumers, not a boon to domestic manufacturing.
There are a few problems with how Trump is going about this:
1. The tariffs are too broad, they don't target a single or a few industries.
2. Trump has gone back and forth many times on them, using them as negotiating leverage, not as long term incentives.
3. They are on very shaky legal grounds and will likely end up getting reversed by either the Supreme Court or the next president.
If you want to use tariffs to encourage on-shoring you make them targeted and pass them with bipartisan support through congress. Companies need stability and long term guarantees for the kind of capital expenditure that is needed. Even better if you use a mix of carrot and stick, rather than all stick
And with China a key target in the Trump Tariff debacle, China is punching holes in these punitive tariffs. Besides shipping goods to intermediary countries that are not as heavily tariffed then exporting to the U.S., China is taking ownership stakes in American businesses, thus circumventing the whole tariff thing. And the beauty of this is, they can take advantage of U.S. taxpayer benefits, such as an R&D tax credit, to sweeten the deal.
If China and the US were producing the same things but the US version was just a bit more expensive, then sure, consumers might switch yo the US version if the Chinese version overnight became the more expensive one.
But that isn't what's happening generally. China is producing stuff that the US simply doesn't produce, and so consumers just need to pay the increase out of their own pockets for the same Chinese product. It takes multiple years lead time to set up a manufacturing operation for anything of note, and I doubt many people are convinced of the stability of the tariffs to make that leap.
Tariffs can be used to support domestic production. But not with how Trump is implementing them. Pointing out that tariffs can be used this way is ignoring what's actually happening.
> its a risk to manufacturers because the whole thing could get reversed after an election.
It's a risk to manufacturers when Trump might wildly change tariffs for a country / set of goods / whatever, up or down, at any time, because someone said something he didn't like somewhere, or some other non-economic rationalization.
The instability and lack of cohesive direction mean it's impossible for manufacturers to respond to tariffs with investment even within Trump's term.
I have definitely had to pay tariffs on goods I have ordered from the UK. They arrive as a separate bill, and with the threat that if I don't pay them in within a certain time (usually a week) that the good will be returned to the seller.
US Tariffs only hurt US citizens. Anything else is simply the stuttering of a simpleton.
Even if it isn't as clearly separately billed - the market works the way it does and that cost is going to be passed onto the consumer unless the seller just decides to eat the cost (and I am aware of several small businesses that are eating the costs to try and avoid any PR backlash with the hope that this is a temporary situation).
And if the tariffs are ruled invalid you're free to speculate whether target is going to send you a check for what you effectively paid or just pocket the difference.
The fighting part isn't just us tariffing China, it's bullying other countries to do the same.
That's how the US won the first trade war under trump 1 (and continued by Biden). Now Trump 2 tried to ramp it up and this time its backfired because other countries have refused to go along. Many have even been pushed to collaborate more closely with China. China's exports have only grown to record highs
Trump failed to convince other countries to continue going along because he's a simplistic zero-sum bully who barks orders, expects others to fall in line, and then throws a tantrum when they don't - rather than a tactful leader capable of maintaining the trust of a voluntary positive-sum coalition. That he's also been overtly attacking allies at the same time doesn't help convince anyone either - the new regime was attacking Canada straight out of the gate, and it's hard to explain attacking Greenland any other way than a Putin-favored plan to drive a wedge between us and our traditional allies.
Very, very few people believe that. This is how it works: Republicans willfully lie to their supporters, who know it is lie, and they then knowingly pass on the lie to you. This could be your conservative friends, family, co-workers. They are all knowingly lying to you. This is a pretty simple form of debasement and a loyalty test - will you repeat this lie for me? The bigger the lie, the more loyal.
Predominately, yes. It has been weaponized by the current Republican party. I'm not saying Democrats never ever do it, just that it isn't part of their MO like it is in the current Republican party.
Let me propose a game. You name a bald-face lie told by the last administration. A bald-face lie is one where the person telling the lie knows its a lie, and knows that the people they saying the lie to knows that it is a lie. Got it? Bald face lies are generally only told by sociopaths. So, you do that, and I will give you 5 told by this admin. I will include at least one from the last month. We'll keep going back and forth and keep a tally. With you getting a 5x handicap.
Now, do you think you will win that game? Do you think it will even be close? Be honest with your answer.
I can’t help wondering if the biggest problem in the US right now is that a majority of people having a “fundamental misunderstanding” about many, many very important things.
Maybe it’s because of propaganda, mis information, social media, education or because they’re too busy and tired trying to make ends meet so they don’t have time to research issues for themselves.
It feels like it will be very difficult to course correct when so much money and power wants it this way.
Reminds me of the staggering number of people who don't get marginal tax rates, even thinking they should pass up certain raises so they don't get pushed into a higher tax bracket and pay a higher rate on their whole salary.
Most people here in the US that I talk to understand that the additional tariffs imposed by the Trump administration are an attempt to get domestic US industries to produce the items that are now being imported subject to the tariff. In some cases that has been successful. In many cases not. Many industries are virtually impossible to de-globalize.
Step 1: put tariffs on coffee and bananas.
Step 2: pump out CO2 until climate is appropriate for growing coffee and bananas.
…
Step n: Load profits onto your scavenged freight boat and try to find Dryland.
The end result is still higher prices for the end-consumer... If the local businesses were unable to compete with a foreign supplier w/o the tariff, they'll be unable to do it with the tariff. So the consumer will end up paying less than (foreign + tariff) but higher than (foreign).
Yes, and the gamble is that the positives from boosting domestic industry will outweigh the negatives from higher prices. The only people confused about this are NPR-constructed strawmen.
Except Trump himself repeatedly claimed that the exporting country is paying the tariffs and that the US is earning billions of dollars. And many of his followers seem to believe this.
There is no domestic industry, it all moved overseas, and the existential risk to cessation of fiscally enabling tariffs within 4 years (assuming set and forget; note, business's ideal outcome), means most of the money will just find something else to chase for modest returns for 4 more years. Nevermind everything else going on poisoning goodwill toward the U.S. currently. The absolute, unmitigated stupidity on display currently is nothing less than I expected from a population without a Great Depression under their belt. We truly, truly, are too dumb as a society to have learned and internalized a goddamn thing.
...get domestic US industries to produce the items that are now being imported...
But, that's (corporate) socialism, and that group of people (mostly) claim to hate socialism.
There's a time and place for tariffs. Protecting "all" domestic industries via global trade war is (IMO) not it. Nor is wielding tariffs as a punishment simply because a foreign leader wasn't docile and subservient enough for Trump.
I agree the administration tariffs "wouldn't be levied on manufacturing inputs" if they really wanted to help domestic industries. I'm not saying they're doing the right thing, I'm just saying that most Americans I talk to understand the INTENTION is ancient protectionist logic, but the Fed report is evidence that this logic is currently failing to produce the administration's intended "manufacturing miracle". It is so inconsistent, being successful in very specific niches (like some domestic textile or furniture segments), but the Fed notes that nearly half of all businesses reported a decrease in their bottom lines due to the policy.
Manufacturing miracles aren't instant: it takes a lot less effort to import something than to invest into manufacturing. The inconsistencies mirror this perfectly: the industries where startup costs are lowest see the boost.
What’s obnoxious about them isn’t tariffs conceptually, it’s the implementation.
There’s an argument that some sort of tariffs are actually necessary. The world is changing and the US has become reliant on countries who increasingly have divergent interests from the US. Additionally, some countries have aging populations that will make them more and more unreliable places to manufacture stuff in the next couple decades. It’s entirely reasonable to believe that it’s pretty critical for the US to begin the process of re-industrializing as soon as possible and tariffs are a crucial lever to make that happen.
But…how you do that matters. Re-industrialization is a process that will take decades and the businesses doing that need to be fairly sure of the government’s policy for most of that period. If Trump had built a broad consensus with Democrats for the tariff policy so that businesses could have understood that a future Democratic president or congressional majority would continue the tariff policy, then businesses would be able to plan accordingly and begin the massive capital outlays that come with re-shoring manufacturing. And the tariffs would strategically exclude certain items like the steel that would be necessary to build factories. And, lastly, you wouldn’t pick now to go on a deportation spree when a sizable chunk of the nations construction workers are undocumented immigrants, since all those factories will need to be built by someone and there aren’t enough Americans to do it.
But instead of the sane and well-reasoned way to do it, we’ve got Trump’s shoot-from-the-hip chaos version. The tariff policy changes weekly, so businesses can’t predict it, let alone rely on it in the way they would need to to spend the collective trillions of dollars on manufacturing infrastructure that need to be spent. And he’s antagonizing Democrats to such and extent that any future Democratic administration will drop the tariffs on day one. The result of which is that businesses, understandably, are hunkering down until he’s out of office. Instead of spurring the massive investment we need, his policies have chilled spending on manufacturing. The only thing we’re really building at the moment are data centers.
So there’s this narrative that tariffs are awful now that’s really the result of someone incompetently deploying them. Some sort of tariff policy would actually be a necessary medicine for the country to help heal the damage from an over reliance on a globalized system that is going to crumble in the coming decades. It won’t be easy, but the earlier the country starts to address it, the better the outcome will be. But it needs to be done intentionally, in a bi-partisan way and through acts of Congress, not in a scattershot fashion where Congress is a bystander and a single deranged lunatic pulls tariff percentages out of ass whenever the mood strikes him.
Excellent points! But at the end of the day, Trump's tariffs seem more like an ego-driven money-grab rather than a sincere move to motivate re-shoring of manufacturing. I really suspect the whole manufacturing renaissance the administration cites as the key reason for this policy is really a ruse.
Plenty of Americans are ready and able to do the work if the conditions and wages are at the market rate. We're addicted to abusing the illegal immigrant underclass. Returning undocumented people to their homes is the moral issue of our time; Trump is ending a system of neo-slavery.
Trump denigrates immigrants daily and stuffs them in squalid camps or prisons. Wouldn't you say that undermines the idea that he's actually acting on a moral obligation to protect immigrants from exploitative labor?
See also his brief hesitation only when his farming and hospitality CEO buddies ask him to leave some illegals for their business needs.
Of course they increase the price of goods - that's the whole point!!!
> is like fighting your neighbor who's dog keeps peeing in your yard by lighting your own couch on fire.
it's more like buying your own dog to pee in your yard, and keep out the neighbor's
What is missing from the convo is where the tarriffs go - they go to fund the federal gov't, which spends on Goods and Services for the American People (you hope).
What you would want to see is a reduction on income taxes concomitant with the increased tarriff revenue. US Gov gets the same amount of money, US consumers pay the same in taxes + tarriffs, but American industries get protection from overseas competition, strengthening key sectors of the US economy.
Generally, protective trade policies weaken rather than strengthen competitiveness in industrialized nations.
I guess you could argue that we’re so far behind in some sector like manufacturing that we need developing-nation-like trade barriers to nurture embryonic growth, but a look at real numbers would, I think, demonstrate that’s rubbish.
I think the misunderstanding is in a combination of wording + practical application.
Tariffs in the legal sense are technically paid by the importer who sells a product. It's their responsibility to pay it... always.
The importer could technically eat that cost, and the consumer wouldn't see a difference on their price tag.
But what happens in practice, the vast majority of the time, is the importer passes that extra cost on to the consumer by raising the price they're selling it for. This is technically a business decision made by every importer individually, it is not a requirement.
The people saying tariffs are paid by the importer, or tariffs are paid by the consumer, are both right, but within different perspectives and depending on how each importer chooses to handle their tariffs.
I know of a 10-12 employee business in my town who custom-designs kids products that are manufactured in China because they want to keep their products affordable for parents. Getting them manufactured in the US (even though they wanted to) was way too expensive and would require them to charge way above retail just to stay open.
Once the tariffs dropped, their cost of goods more than doubled.
Their business in that capacity, was gone overnight.
It's easy to think in some vacuum businesses can just "absorb" costs, but as many businesses know, this is rarely the case.
OK, so the custom-designed kids product becomes a luxury item and the business has to charge above retail. The kids learn that adults time is too valuable to be spent on manufacturing trinkets that get thrown away. They take better care of the few toys they do own. There is less plastic crap in landfills. Seems like a win all around?
These products were specifically designed to help care for kids with special needs. And the goal was to keep the items as affordable as possible because their customers were often on a shoestring budget for one reason or another.
Genius, though. Just have them pay more for their "luxury" items! Why didn't they think of that! They would be glad to know helping kids with special needs is a "luxury."
Tariffs can be paid by the seller/exporter. If a very significant part of a company's business is done in the US, and the tariff is sufficiently high, they will lose market share if the customer eats the entire cost of the tariff (which is the whole point of the exercise in the first place). So they may decide to socialize this cost a little bit, by increasing prices in all countries, by a lot less than the tariff, and making customers in other markets in effect subsidize the Americans. Everyone except Americans .pays a bit more, prices don't rise as much for Americans.
It's interesting to see how little of that is going on, empirically, by looking at these kinds of quantitative studies.
Because a corporation doesn't have trading partners, it has a mission to sell to customers. If customers are disproportionately in the US, which happens quite often, then you can entirely rationally decide that pissing them off with a big price hike is worse for the bottom line than pissing everyone off a little.
Why would they be pissed off at the business for not absorbing the tariff? The business didn't arbitrarily enact them, Donald Trump and ipso facto his supports did.
IMO the people claiming that "technically the importer pays the tariff" are deliberately using the letter of the law to confuse and distract the main thrust of the arguments.
What we mean when we ask who is paying the tariff is this: when we increase tariffs, who becomes poorer?
A part costs what a part costs, and the consumer is always going to be the one who pay for that. If tariffs raise the price of the part, then the consumer pays more for the product the part is used in. The cost of the part goes up (because tariffs), the price of the product goes up too. It's really that simple.
No "importer" is going to eat the cost of the tariffs, and it is ridiculous that anyone would think that.
Sure I understand why you'd write "Everyone" on HN.
But no, some of us have had functional brains for a while. Thanks.
EDIT: to be fair, if you were even slighly more specific about the shit-eating morons that ate this illogical, stupid rhetoric, it would be too political and, at best, result in your comment getting clobbered so.... "everyone" it is. Can't make the dumb****s that led us here feel bad.
Subsidies are also expensive for the tax payer. Warping the market costs money. (No comment on whether it's being warped in the "right" way right now.)
Having the world reserve currency is an independent source of revenue for the US Government, as it allows for an amount of monetary inflation without corresponding price inflation. Through a combination of Federal Reserve policy and the political martingale of "balanced budgets", most of this revenue has been simply given away to asset holders in the form of low-interest loans. This money could/should instead be spent to purposefully mitigate the damage to domestic industry that comes from having the world reserve currency.
I think blanket tariffs are dumb don't get me wrong.
But tariffs have been used in the car industry for decades. If you got rid of them completely within 5 years the American car companies would be closing plants.
The whole reason Japanese auto manufacturers build plants in the US was to avoid tariffs. Shipping costs are actually incredibly minimal for a vehicle.
So in my opinion, we've seen where they can work. If you value American jobs anyways. It does get hard to math out when you have to weigh the money the average consumer would save over the 10 million auto jobs in the US.
What if, instead of all of us paying in order to have a car industry, we take that tax money and pay to an ecological restoration industry or functioning healthcare industry or whatever. Have you seen the map of superfund sites? Statistically speaking, you are almost certainly living within 10 miles of a superfund
Japan, India, Germany, Mexico, etc all have massive auto manufacturing industries. If we're at war with all of those countries at the same time then maybe we deserve what's coming
China only became an auto industry power house in the 00s.
I wonder if the argument turns on Michigan being a helpful state in presidential elections - many other parts of the Midwest have lost their former industry and fallen on hard times.
That sounds to me like spending money to fix broken windows, rather than building our own windows (and not buying the old windows that were always breaking)
> It does get hard to math out when you have to weigh the money the average consumer would save over the 10 million auto jobs in the US.
Not that hard to math out, the deadweight loss of tariffs is always non-zero. IIRC there was a pretty good paper that mathed out the impact of Obamas tire tariffs and concluded that it cost the economy significantly more jobs than it saved.
That's pretty much impossible. If it costs a company 1% less to make a widget that takes 1000 hours of labor to make it overseas instead, the company is incentivized to move overseas.
The thousand of hours labor, the material to source the widget, the real estate for the factory, the transportation now all occurs overseas.
At the very least, you can't spew something like that then not even bother to link a source.
Don't American cars have some of the lowest levels of reliability?
I'm not super educated on all the happenings in the car industry globally, but I've seen a few videos of Chinese EVs that put anything Ford, GM or other US brands have put out to absolute shame.
The purpose of the US auto industry is primarily a jobs program and secondarily a way to ensure the existence of supply chains for national security. The fact that it produces cars is tertiary at best and explains the quality of vehicles it produces.
I think American car companies are orthogonal to the question. The larger point is that _Japanese and German_ cars for the American market are largely themselves American by many important metrics.
> I think blanket tariffs are dumb don't get me wrong.
Then add a conjunction and use a single example to just make a point opposite to what you started with.
> So in my opinion, we've seen where they can work.
I can't help but think that you don't believe blanket tariffs are dumb because it worked for one industry and helps American jobs. Just start with that please.
I mean no shit though? People calmly said this in Trump's first term where he (unsuccessfully) first tried to go tariff crazy. What does it add though? Nobody is freaking out saying "all tariffs are bad", they're saying "blanket tariffs for no/the stupidest reasons possible are bad".
There's no hypocrisy because deep down they never had any principles. Principles they did profess were just marketing. (This applies to Dems as well, while we're at it.)
> This applies to Dems as well, while we're at it.
I disagree with this both-sideism. Democrats are much more in following with norms, where MAGA-era FKA-republicans will through anything aside for their benefit (e.g. Merrick Garland).
One way to view the history of the Republican Party is a power struggle between Wall Street and regional/small business owners. Wall Street understands that the U.S. consumer economy depends on international trade to provide cheap, abundant goods and so supports free trade, immigration of skilled workers, and foreign aid/interventions to further U.S. business interests. For them, the culture war and nationalist rhetoric is a way to get Republican voters riled up but they don't really believe any of it.
The regional/small business owners are always threatened by competition from larger international firms and benefit less from international trade. They believe in the nationalist rhetoric and are opposed to free trade because it undercuts their businesses with cheaper products. They think the U.S. can remain the world's superpower without running a trade deficit and doesn't need to build alliances to maintain its power. This is Trump's base, and their misunderstanding of U.S. power is why they love the idea of tariffs. (good for local producers!) They want to get all the benefits of being a superpower without any of the costs.
They also wouldn't have tried using a holstered weapon as pretense for a public execution which the president doubled down on, until he didn't. They wouldn't be treading on state's rights so openly either. We might be seeing parties flipping, in very short order.
If the Dems pick up on some of the issues the Republicans are neglecting, while maintaining principles* about healthcare access and reproductive rights I expect they'd be the dominant political force in America for some time...if they just had somebody who could man the helm.
Every tax ever implemented by government has been initially sold as a tax on the rich. The people voting for it assume they will never be taxed because they aren't currently rich. But, there is never enough of other peoples money to spend. So, taxes expand and/or increase to include more people.
The original income tax was sold as 1% on mid income and 2% on high income. At the time more than half the country was not going to pay any tax.
For the wealthy, or for high earners? I have never seen a proposal for an income tax that grades with your net worth. They only grade with your income.
There are just so many misconceptions about how taxes, finance, economics, etc. works that it can be exhausting. And it's worse when people in positions of power make no effort, or even make an effort in the opposite direction, to educate people on how things work in reality.
It might shock you to ask around your social circle and discover how many people would read a hypothetical headline like, "Tax Rate for Top Income Bracket Increases to 55%", and interpret it as, "Wow, so if my income was as high as that, more than half of what I made would go to the government. Crazy!"
The point of tariffs is that domestic products are more appealing isn't it? It's expected that foreign selelrs just add the tariff to the cost of their product so..
1. 90% instead of 100% is pretty good
2. kind of irrelevant, a better question is how much more money went to domestic companies rather than foreign?
The public needs to understand that tariffs aren't meant to punish other countries (which is what is being sold) - they are meant to change domestic behavior.
If they're supposed to encourage industrial development at home, they've failed on that front. Building new factories requires years of commitment and billions of dollars, but the current administration has shown no interest in actually investing in that development. Meanwhile, the raw materials that would be necessary for a factory are more expensive precisely because of the tariffs, making new industry even less likely. Finally, the very dubious legal ground on which the tariffs are based means that no one is sure they'll be around to the end of this administration, much less into the next, so there's little interest in adapting long-term plans to a temporary state of affairs.
If they're supposed to encourage consumers to buy domestic, they've failed on that count too. Many goods simply are not available manufactured in the US (see above). If the tariffs were applied gradually and incrementally, maybe people would adapt, but from the consumer's mount of view, everything just gets more expensive, so what are they supposed to do? Again, applying tariffs to raw materials means that it's impossible for American businesses to undercut foreign imports even if they wanted to.
Like everything from this administration, the tariff are an impulsive decision based on poor economic understanding and incompetent execution.
For today, sure. People act like 365 days is long enough to change consumer spending habits, and onshore production facilities that took years to offshore.
If tariffs are held strong, there will be two possible outcomes:
1) Domestic production will be increased (via American businesses as well as onshoring foreign businesses), providing jobs and ultimately lower-cost products
2) International tariffs will be decreased across the board - resulting in a more level field for American businesses to compete in foreign nations
Few realize American goods have been tariffed internationally for decades, resulting in a difficult-or-impossible business climate for American businesses.
The situation is akin to Wall Street's infamous short-term outcome favorability. Tariffs are a long-term game, and people have to be willing to trade some short-term outcomes for the long-term economic health of America and it's businesses (and jobs, wages, etc).
Sure, they work via changing domestic behavior. But the purpose of that change is what's important. They can be used to gently (as compared to sanctions) shift demand away from a particular country, or alternatively to apply pressure to a sector to bring it on shore.
> They can be used to gently (as compared to sanctions) shift demand away from a particular country
That works when those countries are selectively tariffed while others are let off. Blindly applying tariffs to whatever satisfies the mood is not the way.
> or alternatively to apply pressure to a sector to bring it on shore.
For this to work, the cost of onshore production must be lower than the tariffed price. The inputs must be made cheaper and not tariffed. Again the US administration is not doing any of these strategically.
"Sure, they work via changing domestic behavior. But the purpose of that change is what's important. They can be used to gently (as compared to sanctions) shift demand away from a particular country, or alternatively to apply pressure to a sector to bring it on shore"
I have talked to some purchasing people at my company and it seems it's going exactly the other way. The company is moving as much production as possible away from the US to serve the international market without paying for tariffs.
I bought some 30 dollar beer glasses from Belgium. Got a 60 dollar tariff bill from FedEx after the fact. Edit: apparently fedex fees were most of this?
Sure, Fedex/UPS's brokerage fees are legendary for small shipments. The problem is better stated as the removal of the de minimis threshold.
So in this case an American is still paying for the misguided close-the-barn-door-after-the-horse-ran-out policy, just with most going directly to the corporate interests that helped install this corrupt administration.
(but the joke is on them - Aliexpress Choice doesn't charge brokerage fees)
Brokerage fees are a business decision. USPS only charges about $5 for dutiable international parcels - and with 15 years in logistics I can confidently say they often don't even charge that fee at all.
Tariffs are designed to change consumer spending habits, and force international businesses to create on-shore operations. To that end, they are effective - but it takes longer than 365 days for those patterns to shift.
I dare say your opinion, here, has nothing to do with the efficacy of tariffs. Tariffs have long been studied, and both major political parties have called for tariffs like we're seeing right now at various points in recent history. The only difference is nobody desired to rock the status quo, so the lopsided economic policies of the past persisted.
Nearly every other nation tariffs American goods in some way. American businesses attempting to sell products into Brazil, the UK, Germany and more are - and have been - at a significant disadvantage for decades due to high import taxes and duties. For the first time those international businesses are feeling the same consequences as their own nation's weaponized economic policies. Perhaps that will put pressure on their governments, achieving the ultimate goal of the USA's policy - reduce and/or remove tariffs across the board. ie. Fair Trade vs. Free Trade.
I didn't say they aren't, rather I focused on the higher-level context which seems more relevant.
> the efficacy of tariffs
I'm not arguing against tariffs in general. I'm taking issue with applying them twenty years too late (after entire industries have wholesale moved away), in an arbitrary, capricious, and illegal manner (dubious for encouraging long-term investment), while expecting them to create well-paying domestic jobs - the only ways to compete with Chinese labor prices are creating domestic "lights out" factories (which given the regime's continued rolling out the red carpet for cross-border capital, likely won't even be American owned), or devaluing our currency to turn our country into an impoverished manual-labor work camp of the type that China worked desperately to move beyond.
As I alluded to with my last parenthetical, I expect the main outcome to be further erosion of what domestic industry we have left (eg Amazon [0] is less competitive, but also any last-step value-add manufacturing / productization) in favor of an international just in time supply chain where this new national sales tax is only paid after a consumer has bought the product.
[0] I could see Amazon just moving most operations to customs-bonded warehouses though.
The best time to take action was yesterday. The second best time is today.
Tariffs are a long-term economic policy. It will take longer than 365 days to change consumer spending habits and onshore foreign businesses/production and rebuild domestic businesses/production.
Most countries have tariffed US goods for decades. The US tariffs on foreign goods will, over the long term, convince foreign nations to reduce or eliminate their tariffs on US goods (creating a more fair business climate for US businesses), and/or increase domestic production (creating jobs, salaries, taxes, etc).
We can't act like it's just too late to do anything about the lop-sided economic policies of decades-past, and we can't act like changing those policies today is nothing but doom. There will be a restructuring - a period of time to adjust - and then things will be fine over the long term. It just takes time and the political will-power to do so.
The best time to close the barn door was before the horses ran off. The second best time is today.
Does this make sense? Especially as a plan for getting the horses back?
Markets are not computationally smooth, rather they have structure. China recognized this, which is why they've been using government policy to keep their prices low to make industries get over the activation energy of moving there. Once those industries are there, that structure then gives them leverage which "we" (ie our leadership class) are only now waking up to.
> We can't act like it's just too late to do anything about the lop-sided economic policies of decades-past
I'm not. There is another comment of mine in this thread pointing out how Americans have been getting fleeced for decades by not spending the proceeds of having the world reserve currency on mitigating the problems of having the world reserve currency. What I am saying is that tariffs, especially as being championed right now, are more like hopium rather than actually confronting the problem.
> we can't act like changing those policies today is nothing but
The doom part comes from having an incompetent dictator-wannabe President who is at best applying a cookie-cutter approach that is decades out of date, but more seemingly just using these levers as threats to personally enrich himself. Which is why he is also using tariffs against longstanding allies, thus prompting them to revisit why they are harming their own economies by tariffing China.
> the political will-power to do so.
What I see is the political willpower on this topic (and other longstanding problems) being abused to not actually address those problems, but rather just to facilitate the next con job on the American people.
Exactly. You make it more attractive to do business with someone domestically by increasing the cost of doing business with nations that subsidize their exports or undercut your companies with slave labour or lax environmental regulations. Over the long term, domestic capacity either grows or emerges to take advantage of business models that were unprofitable due to impossibly cheap imports before.
> by increasing the cost of doing business with nations that subsidize their exports or undercut your companies with slave labour or lax environmental regulations
This is why the ”overregulated” EU got hit with a 30% tariff?
Those are exactly the groups that are meant to pay for the tariffs.
A factor in this that is not mentioned is that companies selling
goods to the US may have made an effort to lower prices,
altering production to lessen tariffs or in other way tried to
offset the extra amount US consumers have to pay.
In most free trade agreements many products are without tariffs, some have quotas and others yet have tariff. For example, under CUSMA Canada have no tariffs on US made apparel and footwear, diary is under quota and steel has 25-50% tariffs. But then if you hear someone who lies a lot and has an agenda they will only tell you about steel tariffs and make you think that all US made products are under tariff.
Well that's the big question. Do they? Like, why was a 15% tariff imposed to products from here in the EU? And why was Trump toying with the idea of imposing extra tariffs on my homeland of Finland alongside Denmark, Norway, Sweden, France, the UK, Germany, and the Netherlands for sending troops onto Greenland -- after having insulted the whole lot of us -- and of course also to France for daring to not join Trump's little "Board of Peace".
Even if there were massive tariffs towards the US, these are clearly politically motivated economic attacks, not motivated by economics. And that's not a thing an ally would do, regardless.
> If tariffs are bad, why does every country tariff US-made products so heavily?
That's an easy question. The answer is "they don't."
USMCA/NAFTA guaranteed free trade with Mexico and Canada.
Pre-2025, there was no blanket tariff on US goods in Europe. They tariffed some agricultural goods at 11%. Industrial goods were in single digits.
The tariff numbers that Trump purports (e.g. blanket 30% tariffs on Switzerland) are in no way proportional to their tariffs on US goods. It's just false.
The lie that other countries had massive blanket tariffs on all US goods is being sold to the American public to justify massive so-called "reciprocal" tariffs that (a) violate existing trade agreements, (b) make things expense for the American consumer, (c) don't necessary encourage new businesses in the US.
I just want to point out that this "reciprocal" nonsense was in no way calculated or strategic. The chart/table they showed was literally LLM-generated and no one could explain how they got those numbers. It's a complete circus and we're sitting here refuting bullshit everyday.
They didn't. Not until Trump started tariffing them. (I don't have time to find references, but Paul Krugman has you covered for data and analysis.)
All Trump's policies assume he's playing a single-move game where his is the only move. It turns out it's an infinite game and the other side actually has free will and competent decision makers. He can't just wish people into the cornfield as he promised.
I’m honestly surprised it’s that low. I fully expected it to be over 100% as companies used it as a chance to line their pockets just a little more and blame it on someone else.
Whether a policy decision creates effects that "harm" consumers isn't the only facet of international trade policy that has to be considered. In fact, it may be one of the least important depending on what exactly that harm is.
The tariffs are just another variation of the Republican dream of replacing income tax with sales tax and so reducing the tax burden of higher incomes. Nothing new here.
Many carriers also effectively stopped honouring DAP Incoterm. If consumer doesn't pay the tariff within 2 months or so, they charge the shipper.
See FedEx for instance:
14.6 Regardless of any payment instructions to the contrary, the Sender is ultimately responsible for payment of duties and taxes and all fees and surcharges related to FedEx’s disbursement of duties and taxes if payment is not received. If a Recipient or a third party from which reimbursement confirmation is required refuses to pay the duties and taxes upon request, FedEx may contact the Sender, for the same. If the Sender refuses to make satisfactory arrangements to reimburse FedEx, the Shipment may be returned to the Sender (in which case, Sender will be responsible both for original and return charges) or placed into a temporary storage, general order warehouse or a customs-bonded warehouse or considered undeliverable. If Transportation Charges for a Shipment are billed to a credit card, FedEx reserves the right to also settle uncollected duties and taxes charges associated with that Shipment to the credit card account.
I just got a DHL shipment from the UK. They indicated I (the receiver) needed to pay the tariff or the shipment would be returned to the sender within 1 week.
It sure sounds like they aren't going to charge the shipper. And I can't blame them for not wanting to be left empty-handed.
Not exactly. The most significant change in the 2025 language is the explicit right for FedEx to automatically settle uncollected duties and taxes against the credit card used for the initial transportation charges. Previously, FedEx would typically issue a separate invoice for duties and taxes and attempt to collect it via standard billing cycles.
In short, they now often release shipments without attempting to collect payment from the recipient and charge the shipper.
The US has needed to raise taxes for decades given the level of spending the federal government does and constant "relief" packages that everyone now expects the minute there's a downturn.
The runaway deficit is a massive problem now given the age of 0 interest rates is over.
So what's astonishing is, whether you like him or not, the Orange man actually got the American public to accept what is defacto the largest tax increase in decades.
Unfortunately, they immediately spent that money too on the promise of persistently high growth in the world's richest economy. I find that unlikely over time, but time will tell.
Seems every large Western country is currently hell bent on finding out what level of deficit spending results in societal collapse.
He successfully raised taxes on poorer Americans while providing an even larger tax cut to the richest Americans. He also gutted the enforcement arm for said tax collection.
Netting it out, it’s a loss in revenue that disproportionately helps the richest and taxes the poor while making the government revenue decline. While also making the US dollar decline, multiplying the losses.
> What's astonishing is, whether you like him or not, the Orange man actually got the American public to accept what is defacto the largest tax increase in decades.
What does it mean "got the public to accept it?" The public had no say and these are probably illegal. On top of that, he probably literally does not know that these are effectively taxes on consumers (i.e. he believe his own bullshit).
This was a huge part of the platform that the US overwhelmingly voted for in the last election. People wanted this.
Yes, I'm sure he believes his own bullshit, but ironically, its bullshit that the US actually needed to pull (tax increases). Modern democracy has proven totally incapable of not stealing the future from its children.
“They wanted this” but the people who voted for this did not have the mental capacity to sort fact from fiction with respect to tariffs. So this falls flat.
The different between taxes (you -must- pay (unless X loopholes applies to you))
whereas tariffs are voluntary and even more so then sales tax.
You may chose not to buy any products or goods that requires you
to pay tariffs.
Which is the primarily goal to begin with.
Influence consumer behaviour.
I realize that for some products and goods there may not be a
an alternative choice of products or goods that do have tariffs.
In theory, over time, these will be increasingly replaced by
products and services that have the competitive advantage of
not having to tariffs applied to them.
Once tariffs are in place for a year or two it is possible
that, domestic producers have expand capacity, have created jobs
have caused supply chains shift and new production is based on
the tariff based price structure
This however takes time.
And to what extent it happens is not easy to predict.
Some may think that the next president will remove all tariffs
the moment he or she takes office, so it is a short term problem.
The problem with removing them all, is if the above has happened,
and removing them will destroy American jobs.
There's certainly a case to be made for targetted tarrifs, legally enacted, to support specific industries.
The problem with broad tarrifs by executive order under emergency powers to address longstanding issues are numerous.
Longevity and stability of the tarrifs is questionable because a new executive is likely to cancel them, the executive that issued them is likely to cancel them, and they may also be cancelled by the courts because their basis isn't solid. For some goods where production is easy to shift, it still makes sense to move it ... but then it's easy to shift out again when the winds change; goods where setting up production is a many years thing aren't likely to move with the winds.
The broad tarrifs mean that for goods that are manufactured from components of many origins, it may not make sense to pay tarrifs on the components in order to reduce tariffs on the finished goods. Or that it makes more sense to move manufacturing from one foreign country to another than to move to the US. I get it if you want to move both manufacturing and resource extraction to the US; but it would make more sense to do it one step at a time... first develop demand for the resources in the US, then push to onshore the resource extraction... OTOH a lot of americans prefer resource extraction to be out of sight, and some resources are simply not abundant here.
The other factor is that many countries respond to our broad tarrifs on their exports with their own tarrifs on our exports. This can easily hurt US producers more than it helps them. US products become more expensive in those countries due to their import tarrifs as well as US import tarrifs on the inputs and often there are many non-US suppliers to choose from; possible increases in US domestic demand may not materialize because costs will go up for US consumers as well due to tarrifs on input and potentially loss of economies of scale if the reduction in exports is significant.
I may be a free trade maximalist, but IMHO, the current admin's tariff policy is a recipie for economic slowdown. Which does help their goal of reducing immigration: the best way to reduce economic immigration is to have a deeper recession or depression than the world at large; it also helps with traffic. Big inflation numbers also push stock indexes up and reduce the cost of servicing old debt, but increase the cost of revolving and issuing new debt.
Once tariffs are in place for a year or two it is possible that, domestic producers have expand capacity
Once tariffs are in place for a year or two it is possible that consumers will be paying higher prices for inferior goods from providers that can't compete elsewhere.
In other words, there are both positive and negative effects --- and no clear way to predict which will prevail.
It's 19 century economics applied in the 21st century --- it's direct government interference in the marketplace --- the opposite of what Republicans spent decades railing against.
> Once tariffs are in place for a year or two it is possible that, domestic producers have expand capacity
That's how tariffs would work if wielded for the right reasons. But now domestic producers have to pay tariffs on the very machines and inputs needed to expand capacity.
I don’t support tariff but it being used as a negotiating technique is the only choice here to reduce trade deficit.
US can’t keep up the trade deficit it currently has. It requires endless fiscal deficit and sell paper money to others that sends their cheap stuff to US. With growing deficit, the interest payment now is soon to be higher than defence budget. Something has to give.
When will we see the lower interest payments as a result of the tariffs, and how much lower will they be? The initial signals are in the opposite direction as your comment indicates. Maybe it’s a short term pain for long term gain: but when, and how much, and what is the evidence that will be true?
Because it seems more likely to me that we have a greedy moron in charge who doesn’t mind his “business” (aka our society) loses trillions as long as his family and friends make billions.
Oh so now government data from the institution under massive pressure from the administration for politicizing interest rates is believable because it reinforces your preconceived notions?
Typical. 1) No, tariffs are not always paid by the end consumer, producer margins collapse also. 2) If the end consumer can pay increased prices then the previous price wasn't properly efficient. 3) Short term vs Long term matters most in the actual outcome of prices as domestic competition takes time to build. 4) Interest rates are being kept high to produce a reportable outcome.
End the Fed, then lets see where we are. Otherwise, stop trusting banks because you hate the used car salesman.
Everyone has been getting sold that these tariffs are on "China" or fill-in-the-blank on what country we're "getting" with them.
The reality is that's a fundamental misunderstanding of what a tariff is.
There is a reason you will find tariffs drop off after the great depression. They make everything more expensive for businesses and in turn, the end consumer.
https://en.wikipedia.org/wiki/History_of_tariffs_in_the_Unit...
"Fighting" China with tariffs is like fighting your neighbor who's dog keeps peeing in your yard by lighting your own couch on fire.
It is baffling to me, as it is no different than thinking that "sugar taxes" are taxes that soda companies pay. There is even a straight forward analysis that shows it does impact the soda companies rather heavily. But it is objectively paid by the consumers. And nobody is really confused by that.
Right, and sugar taxes are an example of a tax where there's a clear objective. To avoid the tax, don't put sugar in things if you can help it. Result: Products which had sugar because it was cheaper don't any more because of the tax, it's not cheaper now.
These tariffs have a huge red flag because there's no objective. Onshoring? No, wait, we got a new deal the tariffs are removed. New trade deals? No, wait, somebody wrote a mean Tweet about Donald so the tariffs are back and the deal is off.
Tariffs to produce market effects (like onshoring) only work if those tariffs are observed to be durable (in four years all these tariffs will evaporate) and are strengthened by being paired with other encouragement (i.e. industry development subsidies).
These tariffs are arbitrary and capricious and no business would rationally respond to them with any kind of long term investment. People just want to weather the storm of the mad king and international partners are developing alternative relationships to seek more stability.
And if tariffs don't work, he'll just defund whatever aid you're receiving or project you're building or life saving research you're doing or critical job you're performing.
And if the cost if lives or dollars or reputation is enormous, he'll still sleep like a baby.
It's cool though, you can probably get a few billion in funding if you "lobby" a few million to the right people. The tariffs exist, imo, primarily as a threat to induce bribes for loopholes (e.g. the smartphone loophole).
I think you sum up exactly why they will be found illegal.
Found to be illegal when? 3 decades after they've done their damage?
There's a case in process that'll likely resolve in the next two months. Quite a few companies have filed suite banking on getting their fees reimbursed.
In the current political climate nothing is certain - but this will likely come to a resolution in the near term.
Okay, so if they lose that case, Trump will just pass a new executive order that once again takes months to resolve.
The solution, of course, is to never vote R again, for any office.
You have to punish anyone supporting this insanity.
Phew, good thing this regime is super into following the law and listening to courts.
Pretty much every tax is ultimately paid by the consumer, because all the suppliers have to make a profit or they won't stay in business. The point of an import tariff isn't to make anything cheaper, it's to level the market in the presence of a foreign supplier who has much lower costs (e.g. sweatshop labor, state-supported industry, etc.) that are not available to domestic suppliers.
The problem is that the tariffs are so broad in ways that don’t help US industry; and there are few supply chains wholly within the US so you end up hurting US manufacturing as well.
It doesn’t really make sense, for example, that we slapped tariffs on Madagascar, when the primary reason we run a trade deficit with them is that they grow vanilla which cannot be grown in the US.
If the supplier is forced to leave the business, that is a form of paying. They are losing a source of income and will have to pick a different activity that they are not efficient at. In the case of tariffs on international trade, the supplier loses a chunk of market - in the case of the US, one that was wealthy - and that always means a loss for the business.
The burden of ALL taxes falls on both sides of the transaction. The proportion of the burden varies with market conditions, the most important being elasticity.
That's why studies like the OP are necessary, to determine how much the proportions are. Honestly I am not surprised with the result, tariffs are objectively bad. Curbing trade is bad by default.
I would love to see joint tarrifs, together with US allies, to fight against things like sweatshop labor, state-supported industry, etc. That would really send a signal that those things are unacceptable, and lead to change.
That's not what we have here, and that's not what the Trump tarrifs are perceived as internationally.
The trouble with sugar taxes is it does drive soda-company behaviour. A. G. Barr killed the real Irn Bru in 2018 to avoid the Scottish sugar tax.
It could've passed on the tax to the consumer, but it didn't. It has ceased making its iconic beverage and now only sells a variant that tastes crap. No amount of money can bring the good stuff back. The sugar tax killed it. The world is now a slightly worse place, thanks to government interference.
(I'm sure there's a way to extrapolate this anecdote back to tariffs)
The sibling point that talks about the goal of the tax hits the idea you are talking about, I think. And this is what I meant saying you can show they can impact the soda companies. But regardless of any downstream effects of the tax existing, the tax is paid by the consumer.
Destroying demand for sugary drinks was exactly the intent, though.
> It is baffling to me, as it is no different than thinking that "sugar taxes" are taxes that soda companies pay. There is even a straight forward analysis that shows it does impact the soda companies rather heavily. But it is objectively paid by the consumers. And nobody is really confused by that.
Businesses like to say that, to get consumers to back them politically, but it's not at all true:
When input costs increase, a seller must decide whether to take the extra expense out of their profit or to increase the price (or some mix of the two).
Taking the extra cost out of their profit obviously decreases profit.
Raising the price decreases sales (consumers won't buy as much at a higher price), which decreases profit. The change is not linear (look up demand curves). The seller, if they are smart, already found the price that maximizes revenue. Therefore changing the price will reduce revenue.
In reality, it's not such a science and there are other factors. Another fundamental factor is price elasticity of demand, which is how much a change in price affects demand. For sugary drinks, quite a bit - people can forgo them. For lifesaving healthcare, elasticity is less, for obvious reasons.
If rent or business taxes go up, the business may either eat the cost or eventually raise the main price, they don’t tack a “rent offset fee” on the final bill. But with tariffs, up to a point the business dgaf because they just pass it through as a separate “junk fee” line item.
> If rent or business taxes go up, the business may either eat the cost or eventually raise the main price, they don’t tack a “rent offset fee” on the final bill. But with tariffs, up to a point the business dgaf because they just pass it through as a separate “junk fee” line item.
It's always kind of enlightening to see exactly what things businesses choose to explicitly pass on to the customer, and what things they just eat as a cost of doing business. It's often very political and performative.
Some restaurants in California have taken to adding a "Living Wage Fee" to restaurant bills as a way to protest having to pay their employees proper wages. They could have just eaten the cost and raised their food prices slightly, but instead they chose the passive-aggressive route, complaining about it via the bill, which the customer sees. Presumably to try to convince the customer that "Living Wage" politics are bad and that they visibly raise the price the customer pays.
But, when the county raises their property taxes, the same restaurants just eat the cost. They don't add an "Unfair Property Taxes" line item to their diners' bills.
Yeah, it's like VAT or state taxes.
And nobody is really confused by that.
Yet that's not what the administration says about the subject. They're either confused or they're lying (and the people who support them and regurgitate their talking points are confused).
> They're either confused or they're lying
The belief that they are confused is a generosity that we should really be disabused of at this point.
I don't think I can beat the drum of "they are liars" heavily enough. It remains frustrating to see so much accidental carrying of water for them as people look for a hint of legitimacy.
I don't think they're confused or lying. I think they're ideologically driven buffoons, the preferred recruits of all fascist administrations. They don't care about American manufacturing, and they don't understand economics. They want to advance their agenda.
Like, even the propaganda by fascists claiming fascism makes for good policies is bad. Germany under the Reich, completely setting aside the human atrocities, was a fucking SHIT SHOW of a nation state.
> Everyone has been getting sold that these tariffs are on "China"
Everyone? No, only the willfully ignorant.
well it's a cult, after all.
Right. They're on goods from China. The intent is to make that stuff more expensive so we can compete.
That’s not the intent. It could be a more defensible intent if it was paired with a Biden-style program to develop domestic manufacturing capabilities, but that never happened and if it did it would be targeted. Raising taxes on chocolate, vanilla, and coffee, for example, doesn’t affect China and doesn’t change the fact that those don’t grow well in the continental United States (and Hawaii / Puerto Rico don’t have the capacity).
What’s worse, this often raises domestic prices: unless we have robust competition, taxing imports just raises the ceiling for what an existing manufacturer can charge while the uncertainty discourages investment in new capacity: moving entire supply chains takes years and the tariffs changing frequently means that anyone financing it has to price in their competitive edge disappearing if the right cryptocurrency purchase gets the tariff rescinded.
> The intent is to make that stuff more expensive so we can compete.
This would seem to be an admission that the domestic product is inferior, otherwise why would it be necessary to burden the import with tariffs?
In any case, if that's the intent, it's not working out for fairly predictable reasons. Lots of imported goods have no domestic equivalent. The factories required to make them require years of investment, which is not forthcoming, because the longevity of these tariffs is highly dubious and the government is doing nothing to encourage business development. And even if there were new factories, they would have to import machines and raw materials, which are of course tariffed, driving up the cost of domestic goods, and defeating the alleged purpose of the tariffs.
There's no just explanation that can make the tariffs look useful to anyone. Like everything from this administration, it's about the appearance of action.
There’s plenty of action. Actions have amply demonstrated that the purpose of the tariffs is to extort other concessions from countries, or simply to punish them for perceived insults against our leader. This is pretty obvious based on how they are set at arbitrary levels, deadlines are set and deferred, amounts are set and changed unrelated to any economic explanation (“I didn’t like the way she talked to us”), etc.
They’re just an easy cudgel to use against an entire country at whim, at least until the rest of the government delegitimizes the “emergency” excuse being used to impose them.
Essentially the President regards everything as either a zero-sum no-holds-barred negotiation with him as the primary beneficiary, or as some kind of real-estate deal (see his Davos speech about how we’re “leasing” Greenland). Tariffs are just a great general-purpose stick he found a way to wield.
> This would seem to be an admission that the domestic product is inferior, otherwise why would it be necessary to burden the import with tariffs?
There are valid reason and particular instances for when tariffs are good/useful:
* https://www.noahpinion.blog/p/when-are-tariffs-good
It's just that the those instances are not applicable for what Trump is currently doing.
Their argument is so fundamentlaly false though. If the idea is to make American businesses more competitive, why tariff raw materials? That raises the cost of American goods. It makes us less competitive. They are either very bad at this, or the purpose of the tax is different than advertised.
If one country has labor protection and pollution regulations, and another country has near-slave labor and dumps chemicals into rivers, would you consider the former inferior? Unable to compete?
It’s fairly funny to a european that it isn’t immediately clear which half of the comparison is intended to apply to the US, and which half is supposed to apply to China.
It's funny as an American that Europeans are either this ignorant or think this kind of comment is clever.
If you think that labor in the USA and China are treated similarly, you really need to pull your head out of the sand.
Most consumers don't care about the conditions under which a product is made. Whining about labor practices is just an excuse for making an inferior product.
>"Like everything from this administration, it's about the appearance of action."
Actually people are being murdered for real, lots of other real stuff as well
> Actually people are being murdered for real, lots of other real stuff as well
They are. My point is not that the administration isn't having a real impact, but rather that they the administration doesn't care about the real impact, positive or negative. They care only that they get the headline.
"They're on goods from China".
And at least 60 other countries
"The intent is to make that stuff more expensive so we can compete."
Who is the 'we' in that sentence? If it's US citizens, then how is making US citizens pay more money helping US citizens compete?
Why tariff former European allies then? Why tariff Canada?
> Right. They're on goods from China.
And Afghanistan, Botswana, Cameroon, Fiji, Indonesia, Malaysia, Nauru, Serbia, …
* https://en.wikipedia.org/wiki/Tariffs_in_the_second_Trump_ad...
Also, let's not forget about 'penguin island':
* https://www.bbc.com/news/articles/cly8xlj0485o
No. The point is to make foreign goods more expensive in order to bring production back to the US. People who don't realize this point out who is actually paying and claim its a problem.
Will this bring manufacturing back? It seems to be working to some extent, but its a risk to manufacturers because the whole thing could get reversed after an election.
The whole thing could get reversed on a daily basis as this admin commits massive graft, carving out loopholes & rollbacks for their buddies companies/industries/etc..
Not to mention the incoherence that one day its a tool to bring jobs back, the next day its just a negotiation tactic so they get reduced/dropped on a country by country basis over and over.
> Not to mention the incoherence that one day its a tool to bring jobs back, the next day its just a negotiation tactic so they get reduced/dropped on a country by country basis over and over.
I thought it was retaliation for Canada not doing enough to stop their 20-odd kilogram contribution to the 4 tons of fentanyl smuggled in every year? [0]
(Which is to say I agree with you. Just trying to support your point that the reasoning has been so completely all over the map that anybody trying to assign any real meaning seems delusional. At this point I think most people have entirely forgotten half the reasons that have been made up along the way.)
[0] https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-pr...
Yes, it's all kayfabe.
The "smart MAGA" guys always crack me up because by the time they craft an intellectual justification for his previous moves, he has pivoted/reversed and pantsed them once again.
Frequently we get the "he's been poor advised" fallback as well.. Good Czar, Bad Boyars.
Manufacturing jobs are down. [1]
[1] https://www.koco.com/article/manufacturing-jobs-us-tariffs/7...
That doesn’t mean manufacturing is down, if new output is automated.
The trade deficit is shrinking, and which necessarily means there is more domestic flow as foreign hoards of dollars are liquidated. That flow has to go somewhere.
Could be straight to the tax cuts of course.
> That doesn’t mean manufacturing is down, if new output is automated.
You are correct. Of course, if new output is automated, then the purported goal of the tariffs (more manufacturing jobs!) is defeated.
The fact that any new manufacturing will of course be automated shows how little thought went into designing these tariffs and how transparently false the administration's promises are.
> The trade deficit is shrinking
This is totally irrelevant. The size of the trade deficit does is a red herring.
The trade deficit is shrinking because fewer goods are being imported. Producing countries are finding alternate markets that are outside of the US' punitive tariffing.
Perhaps because the inputs to domestic manufacturing are currently more expensive. Actually increasing manufacturing capacity first requires construction and capital expenditure. I'm not sure how those metrics are doing.
> domestic manufacturing are currently more expensive
Because factory machines and raw materials are being tariffed. Also because a source of cheap labor (immigrants) is being excised.
> Actually increasing manufacturing capacity first requires construction and capital expenditure.
It certainly does. And companies are rightfully hesitant to invest, because the legally dubious basis for the tariffs may not survive this month, much less into the next administration.
There are a lot of people in this thread that sound certain there will be a meaningful next administration.
Yet history teaches us that the sort of people this administration consists of never relinquish power without a fight.
That is one of the given reasons, but as with everything else about these tariffs, it's nonsensical:
1. It isn't now, nor has it ever been, the role of the federal government to dictate what types of jobs exist in the private sector. 2. Even if this was the end goal, making it easier and more affordable to manufacture in the US would be far better for all parties involved rather than brute forcing it through arbitrary taxes.
My spouse and I regularly import vintage toys and collectables from Asian countries. We've paid hundreds of dollars in tariffs on items that this point about manufacturing doesn't apply to at all
> No. The point is to make foreign goods more expensive in order to bring production back to the US.
Nikon (for one) had to raise US prices on their digital cameras to handle tariffs:
* https://www.dpreview.com/news/7688376775/tariff-watch-nikon-...
Is the US administration hoping to increase (digital) camera production in the US? Camera lenses? Is there a moribund American camera industry that could thrive if given a chance?
During Trump 1.0 he raised tariffs on steel and got 1k job in steel manufacturing… but lost 75k jobs in manufacturing that used steel as an input:
* https://www.investopedia.com/metal-tariffs-cost-at-least-75-...
> It seems to be working to some extent […]
US manufacturing job numbers are down:
* https://www.reuters.com/world/us/us-factory-headcount-fallin...
* https://www.wsj.com/economy/u-s-manufacturing-is-in-retreat-...
> It seems to be working to some extent
To what specific extent is it working? Not that I don't believe you, just curious how much it's changed already and in what way.
I work at a manufacturing supplier (packaging and logistics) and our business has been on fire since the trade war kicked off. Pre-COVID we were at ~$25MM yearly and now we are $150MM+ and growing steadily.
We just bought a million sq ft building (that was an old RCA plant) and millions in new machinery to keep up.
We are only a regional player, too.
It’s not entirely clear to me why tariffs would help your local logistics businesses? Doesn’t the same amount of stuff get moved around , just changes origin? I believe you I just would like to understand
Because it made it possible for domestic production to increase.
I was shocked when I last visited the USA (from Europe) and saw things like Walmart paper bags labelled "Made in Germany".
Perhaps some of that has been replaced by "Made in USA".
(Day-to-day, I generally don't buy things not made in the EU — packaging, for example, will typically be from Sweden, France or Poland.)
What has been the impact on the distribution in the firm. Have more staff been hired, have more supply contracts been handed out, have worker bonuses increases or has it all flowed to the bottom line?
This is the other side of tariffs that few discuss. It may put import prices up, but it also increases the domestic flow of income.
Which means that those who rely solely on imports pay the cost and those who make the domestic supply get an increase in income as an offset.
We've doubled (or more) in headcount. Mostly in the 'special projects' area (complex shippers, partitions, pallets, parts movers, etc) and truck drivers (we have our own trucking company)
Our prices are primarily pegged to what brown paper is (used to make corrugated) which ebbs and flows. Our prices were affected a little because a lot of pulp and raw material comes from Canada (they sell soft wood incredibly cheap... it's actually been a point of contention in our treaty for decades) but the cost change has been fairly slight (close to inflation).
Labor prices have gone up a decent amount and so has health care. We've found savings in increased efficiency due to scaling up production (there are some big fixed costs wrt machinery that becomes a smaller piece of the pie with increased production).
Nobody imports boxes... cost of transport is more than the product which is why almost all box makers have regional plants.
> Pre-COVID we were at ~$25MM yearly and now we are $150MM+ and growing steadily.
And you think this is due to tariffs? If so, please provide some details.
Manufacturing is booming in the Midwest which is the region we service. They have more business, we have more business.
Of course, with the on/off again nature of these tariffs, the Supreme Court challenge and the fact that practically every country is being tariffed, uncertainty in the business world is epic right now. This uncertainty makes it difficult for manufacturers to see out 6 months, nevermind years down the road. Besides, it would take years to re-shore most manufacturing operations, some supply chains are very complex and the result of years of tuning and adjustments. This is not an overnight migration, as is being intimated. Frankly, I wonder if this is just a money-grab at the expense of the American consumer.
That’s not the way they are presented at all. And making foreign goods much more expensive when we don’t currently produce enough of those products domestically to offer actual alternatives is a clear harm to consumers, not a boon to domestic manufacturing.
There are a few problems with how Trump is going about this:
1. The tariffs are too broad, they don't target a single or a few industries.
2. Trump has gone back and forth many times on them, using them as negotiating leverage, not as long term incentives.
3. They are on very shaky legal grounds and will likely end up getting reversed by either the Supreme Court or the next president.
If you want to use tariffs to encourage on-shoring you make them targeted and pass them with bipartisan support through congress. Companies need stability and long term guarantees for the kind of capital expenditure that is needed. Even better if you use a mix of carrot and stick, rather than all stick
Very well put.
And with China a key target in the Trump Tariff debacle, China is punching holes in these punitive tariffs. Besides shipping goods to intermediary countries that are not as heavily tariffed then exporting to the U.S., China is taking ownership stakes in American businesses, thus circumventing the whole tariff thing. And the beauty of this is, they can take advantage of U.S. taxpayer benefits, such as an R&D tax credit, to sweeten the deal.
I'll use China as an example.
If China and the US were producing the same things but the US version was just a bit more expensive, then sure, consumers might switch yo the US version if the Chinese version overnight became the more expensive one.
But that isn't what's happening generally. China is producing stuff that the US simply doesn't produce, and so consumers just need to pay the increase out of their own pockets for the same Chinese product. It takes multiple years lead time to set up a manufacturing operation for anything of note, and I doubt many people are convinced of the stability of the tariffs to make that leap.
I think the issue is that the people implementing the tariffs continue to deny what you’re saying so people feel the need to point it out.
Tariffs can be used to support domestic production. But not with how Trump is implementing them. Pointing out that tariffs can be used this way is ignoring what's actually happening.
> its a risk to manufacturers because the whole thing could get reversed after an election.
It's a risk to manufacturers when Trump might wildly change tariffs for a country / set of goods / whatever, up or down, at any time, because someone said something he didn't like somewhere, or some other non-economic rationalization.
The instability and lack of cohesive direction mean it's impossible for manufacturers to respond to tariffs with investment even within Trump's term.
I have definitely had to pay tariffs on goods I have ordered from the UK. They arrive as a separate bill, and with the threat that if I don't pay them in within a certain time (usually a week) that the good will be returned to the seller.
US Tariffs only hurt US citizens. Anything else is simply the stuttering of a simpleton.
Even if it isn't as clearly separately billed - the market works the way it does and that cost is going to be passed onto the consumer unless the seller just decides to eat the cost (and I am aware of several small businesses that are eating the costs to try and avoid any PR backlash with the hope that this is a temporary situation).
And if the tariffs are ruled invalid you're free to speculate whether target is going to send you a check for what you effectively paid or just pocket the difference.
A tariff can only cost as much to the consumer as an embargo.
So practically infinite downside?
It could work if you put the couch in your neighbor's yard first.
I'd prefer to not give JD Vance any reason to visit my neighbor.
True but you still lose your couch! >:(
Yes, but it's the optics that matters.
The fighting part isn't just us tariffing China, it's bullying other countries to do the same.
That's how the US won the first trade war under trump 1 (and continued by Biden). Now Trump 2 tried to ramp it up and this time its backfired because other countries have refused to go along. Many have even been pushed to collaborate more closely with China. China's exports have only grown to record highs
> other countries have refused to go along
Trump failed to convince other countries to continue going along because he's a simplistic zero-sum bully who barks orders, expects others to fall in line, and then throws a tantrum when they don't - rather than a tactful leader capable of maintaining the trust of a voluntary positive-sum coalition. That he's also been overtly attacking allies at the same time doesn't help convince anyone either - the new regime was attacking Canada straight out of the gate, and it's hard to explain attacking Greenland any other way than a Putin-favored plan to drive a wedge between us and our traditional allies.
Very, very few people believe that. This is how it works: Republicans willfully lie to their supporters, who know it is lie, and they then knowingly pass on the lie to you. This could be your conservative friends, family, co-workers. They are all knowingly lying to you. This is a pretty simple form of debasement and a loyalty test - will you repeat this lie for me? The bigger the lie, the more loyal.
you don't actually believe that is a one sided thing do you?
What's the other side, do you think?
Predominately, yes. It has been weaponized by the current Republican party. I'm not saying Democrats never ever do it, just that it isn't part of their MO like it is in the current Republican party.
Let me propose a game. You name a bald-face lie told by the last administration. A bald-face lie is one where the person telling the lie knows its a lie, and knows that the people they saying the lie to knows that it is a lie. Got it? Bald face lies are generally only told by sociopaths. So, you do that, and I will give you 5 told by this admin. I will include at least one from the last month. We'll keep going back and forth and keep a tally. With you getting a 5x handicap.
Now, do you think you will win that game? Do you think it will even be close? Be honest with your answer.
What, on Earth, do you mean? lmfao.
I can’t help wondering if the biggest problem in the US right now is that a majority of people having a “fundamental misunderstanding” about many, many very important things.
Maybe it’s because of propaganda, mis information, social media, education or because they’re too busy and tired trying to make ends meet so they don’t have time to research issues for themselves.
It feels like it will be very difficult to course correct when so much money and power wants it this way.
Reminds me of the staggering number of people who don't get marginal tax rates, even thinking they should pass up certain raises so they don't get pushed into a higher tax bracket and pay a higher rate on their whole salary.
Most people here in the US that I talk to understand that the additional tariffs imposed by the Trump administration are an attempt to get domestic US industries to produce the items that are now being imported subject to the tariff. In some cases that has been successful. In many cases not. Many industries are virtually impossible to de-globalize.
Step 1: put tariffs on coffee and bananas. Step 2: pump out CO2 until climate is appropriate for growing coffee and bananas. … Step n: Load profits onto your scavenged freight boat and try to find Dryland.
The end result is still higher prices for the end-consumer... If the local businesses were unable to compete with a foreign supplier w/o the tariff, they'll be unable to do it with the tariff. So the consumer will end up paying less than (foreign + tariff) but higher than (foreign).
Yes, and the gamble is that the positives from boosting domestic industry will outweigh the negatives from higher prices. The only people confused about this are NPR-constructed strawmen.
Except Trump himself repeatedly claimed that the exporting country is paying the tariffs and that the US is earning billions of dollars. And many of his followers seem to believe this.
Might be collecting lots of money as tariffs but they’re acting as a national sales tax. Defrays the cost of the tax cuts to some degree I guess.
Trillions, in fact
https://www.forbes.com/sites/tylerroush/2025/08/31/trump-say...
There is no domestic industry, it all moved overseas, and the existential risk to cessation of fiscally enabling tariffs within 4 years (assuming set and forget; note, business's ideal outcome), means most of the money will just find something else to chase for modest returns for 4 more years. Nevermind everything else going on poisoning goodwill toward the U.S. currently. The absolute, unmitigated stupidity on display currently is nothing less than I expected from a population without a Great Depression under their belt. We truly, truly, are too dumb as a society to have learned and internalized a goddamn thing.
...get domestic US industries to produce the items that are now being imported...
But, that's (corporate) socialism, and that group of people (mostly) claim to hate socialism.
There's a time and place for tariffs. Protecting "all" domestic industries via global trade war is (IMO) not it. Nor is wielding tariffs as a punishment simply because a foreign leader wasn't docile and subservient enough for Trump.
No, the tariffs are just a grift designed to force CEOs to pay tribute to Trump.
If the tariffs were "an attempt to get domestic US industries to produce items now being imported," they wouldn't be levied on manufacturing inputs.
I agree the administration tariffs "wouldn't be levied on manufacturing inputs" if they really wanted to help domestic industries. I'm not saying they're doing the right thing, I'm just saying that most Americans I talk to understand the INTENTION is ancient protectionist logic, but the Fed report is evidence that this logic is currently failing to produce the administration's intended "manufacturing miracle". It is so inconsistent, being successful in very specific niches (like some domestic textile or furniture segments), but the Fed notes that nearly half of all businesses reported a decrease in their bottom lines due to the policy.
Manufacturing miracles aren't instant: it takes a lot less effort to import something than to invest into manufacturing. The inconsistencies mirror this perfectly: the industries where startup costs are lowest see the boost.
> I'm just saying that most Americans I talk to understand the INTENTION is ancient protectionist logic,
Then their understanding is incorrect because that isn't even the INTENTION.
Flat out lies about how tariffs work from the leader of the country might be part of it.
Yes, but people have to have a modicum of awareness of how things work, even though the administration is lying.
Or take the easy way and just assume that everything the admin says is a lie and can't be trusted.
> Everyone has been getting sold that these tariffs are on "China" or fill-in-the-blank on what country we're "getting" with them.
I suspect very few believes the claims other countries are paying the tariffs anymore. People are just saying that's true to stick to the party line.
Unfortunately, saying plainly untrue things has become a major part of US politics.
> Everyone has been getting sold that these tariffs are on "China" or fill-in-the-blank on what country we're "getting" with them.
Just like Mexico will pay for the wall?
> The reality is that's a fundamental misunderstanding of what a tariff is.
Nope! It's a politician talk! People fall for lies whenever they are sold wrapped in a label of "cheap prices".
What’s obnoxious about them isn’t tariffs conceptually, it’s the implementation.
There’s an argument that some sort of tariffs are actually necessary. The world is changing and the US has become reliant on countries who increasingly have divergent interests from the US. Additionally, some countries have aging populations that will make them more and more unreliable places to manufacture stuff in the next couple decades. It’s entirely reasonable to believe that it’s pretty critical for the US to begin the process of re-industrializing as soon as possible and tariffs are a crucial lever to make that happen.
But…how you do that matters. Re-industrialization is a process that will take decades and the businesses doing that need to be fairly sure of the government’s policy for most of that period. If Trump had built a broad consensus with Democrats for the tariff policy so that businesses could have understood that a future Democratic president or congressional majority would continue the tariff policy, then businesses would be able to plan accordingly and begin the massive capital outlays that come with re-shoring manufacturing. And the tariffs would strategically exclude certain items like the steel that would be necessary to build factories. And, lastly, you wouldn’t pick now to go on a deportation spree when a sizable chunk of the nations construction workers are undocumented immigrants, since all those factories will need to be built by someone and there aren’t enough Americans to do it.
But instead of the sane and well-reasoned way to do it, we’ve got Trump’s shoot-from-the-hip chaos version. The tariff policy changes weekly, so businesses can’t predict it, let alone rely on it in the way they would need to to spend the collective trillions of dollars on manufacturing infrastructure that need to be spent. And he’s antagonizing Democrats to such and extent that any future Democratic administration will drop the tariffs on day one. The result of which is that businesses, understandably, are hunkering down until he’s out of office. Instead of spurring the massive investment we need, his policies have chilled spending on manufacturing. The only thing we’re really building at the moment are data centers.
So there’s this narrative that tariffs are awful now that’s really the result of someone incompetently deploying them. Some sort of tariff policy would actually be a necessary medicine for the country to help heal the damage from an over reliance on a globalized system that is going to crumble in the coming decades. It won’t be easy, but the earlier the country starts to address it, the better the outcome will be. But it needs to be done intentionally, in a bi-partisan way and through acts of Congress, not in a scattershot fashion where Congress is a bystander and a single deranged lunatic pulls tariff percentages out of ass whenever the mood strikes him.
Excellent points! But at the end of the day, Trump's tariffs seem more like an ego-driven money-grab rather than a sincere move to motivate re-shoring of manufacturing. I really suspect the whole manufacturing renaissance the administration cites as the key reason for this policy is really a ruse.
Plenty of Americans are ready and able to do the work if the conditions and wages are at the market rate. We're addicted to abusing the illegal immigrant underclass. Returning undocumented people to their homes is the moral issue of our time; Trump is ending a system of neo-slavery.
Trump denigrates immigrants daily and stuffs them in squalid camps or prisons. Wouldn't you say that undermines the idea that he's actually acting on a moral obligation to protect immigrants from exploitative labor?
See also his brief hesitation only when his farming and hospitality CEO buddies ask him to leave some illegals for their business needs.
> There is a reason you will find tariffs drop off after the great depression.
The reason is, the whole world's manufacturing base had been destroyed in the War and the USA was the only man left standing!
We didnt need tarriffs because we were already winning the trade balance. Tarriffs made it harder to repatriate overseas gains.
https://www.stlouisfed.org/on-the-economy/2019/may/historica...
Of course they increase the price of goods - that's the whole point!!!
> is like fighting your neighbor who's dog keeps peeing in your yard by lighting your own couch on fire.
it's more like buying your own dog to pee in your yard, and keep out the neighbor's
What is missing from the convo is where the tarriffs go - they go to fund the federal gov't, which spends on Goods and Services for the American People (you hope).
What you would want to see is a reduction on income taxes concomitant with the increased tarriff revenue. US Gov gets the same amount of money, US consumers pay the same in taxes + tarriffs, but American industries get protection from overseas competition, strengthening key sectors of the US economy.
Federal Gov't only spends its discretionary funds now on funding ICE with 70 billion dollars.
Generally, protective trade policies weaken rather than strengthen competitiveness in industrialized nations.
I guess you could argue that we’re so far behind in some sector like manufacturing that we need developing-nation-like trade barriers to nurture embryonic growth, but a look at real numbers would, I think, demonstrate that’s rubbish.
> Generally, protective trade policies weaken rather than strengthen competitiveness in industrialized nations.
Yes, that's historically been the argument used to pry open foreign markets
I think the misunderstanding is in a combination of wording + practical application.
Tariffs in the legal sense are technically paid by the importer who sells a product. It's their responsibility to pay it... always.
The importer could technically eat that cost, and the consumer wouldn't see a difference on their price tag.
But what happens in practice, the vast majority of the time, is the importer passes that extra cost on to the consumer by raising the price they're selling it for. This is technically a business decision made by every importer individually, it is not a requirement.
The people saying tariffs are paid by the importer, or tariffs are paid by the consumer, are both right, but within different perspectives and depending on how each importer chooses to handle their tariffs.
I know of a 10-12 employee business in my town who custom-designs kids products that are manufactured in China because they want to keep their products affordable for parents. Getting them manufactured in the US (even though they wanted to) was way too expensive and would require them to charge way above retail just to stay open.
Once the tariffs dropped, their cost of goods more than doubled.
Their business in that capacity, was gone overnight.
It's easy to think in some vacuum businesses can just "absorb" costs, but as many businesses know, this is rarely the case.
OK, so the custom-designed kids product becomes a luxury item and the business has to charge above retail. The kids learn that adults time is too valuable to be spent on manufacturing trinkets that get thrown away. They take better care of the few toys they do own. There is less plastic crap in landfills. Seems like a win all around?
> so the custom-designed kids product becomes a luxury item
No, it becomes a non-existent item.
> Seems like a win all around?
If you burn your neighbor's house down, it's possible that what will get built in its place will be nicer. That doesn't make it a "win all around".
These products were specifically designed to help care for kids with special needs. And the goal was to keep the items as affordable as possible because their customers were often on a shoestring budget for one reason or another.
Genius, though. Just have them pay more for their "luxury" items! Why didn't they think of that! They would be glad to know helping kids with special needs is a "luxury."
Tariffs can be paid by the seller/exporter. If a very significant part of a company's business is done in the US, and the tariff is sufficiently high, they will lose market share if the customer eats the entire cost of the tariff (which is the whole point of the exercise in the first place). So they may decide to socialize this cost a little bit, by increasing prices in all countries, by a lot less than the tariff, and making customers in other markets in effect subsidize the Americans. Everyone except Americans .pays a bit more, prices don't rise as much for Americans.
It's interesting to see how little of that is going on, empirically, by looking at these kinds of quantitative studies.
Without coercion today, why would anybody try to give the US a break at the cost of its other trading partners...?
Because a corporation doesn't have trading partners, it has a mission to sell to customers. If customers are disproportionately in the US, which happens quite often, then you can entirely rationally decide that pissing them off with a big price hike is worse for the bottom line than pissing everyone off a little.
https://www.reuters.com/business/retail-consumer/global-reta...
Why would they be pissed off at the business for not absorbing the tariff? The business didn't arbitrarily enact them, Donald Trump and ipso facto his supports did.
Because the US has the strongest economy in the world.
Or, it's the biggest house of cards.
IMO the people claiming that "technically the importer pays the tariff" are deliberately using the letter of the law to confuse and distract the main thrust of the arguments.
What we mean when we ask who is paying the tariff is this: when we increase tariffs, who becomes poorer?
And the answer to that is obvious.
What’s obvious about it? Tariffs mean more money stays in the U.S.
Tariffs mean money is transferred from the consumer to the government.
A part costs what a part costs, and the consumer is always going to be the one who pay for that. If tariffs raise the price of the part, then the consumer pays more for the product the part is used in. The cost of the part goes up (because tariffs), the price of the product goes up too. It's really that simple.
No "importer" is going to eat the cost of the tariffs, and it is ridiculous that anyone would think that.
>There is a reason you will find tariffs drop off after the great depression.
Alternatively: You don't need tariffs when you're the only industrial nation not bombed into oblivion.
>They make everything more expensive for businesses and in turn, the end consumer.
Agreed
Sure I understand why you'd write "Everyone" on HN.
But no, some of us have had functional brains for a while. Thanks.
EDIT: to be fair, if you were even slighly more specific about the shit-eating morons that ate this illogical, stupid rhetoric, it would be too political and, at best, result in your comment getting clobbered so.... "everyone" it is. Can't make the dumb****s that led us here feel bad.
Subsidies are also expensive for the tax payer. Warping the market costs money. (No comment on whether it's being warped in the "right" way right now.)
Having the world reserve currency is an independent source of revenue for the US Government, as it allows for an amount of monetary inflation without corresponding price inflation. Through a combination of Federal Reserve policy and the political martingale of "balanced budgets", most of this revenue has been simply given away to asset holders in the form of low-interest loans. This money could/should instead be spent to purposefully mitigate the damage to domestic industry that comes from having the world reserve currency.
Wish this comment was higher up. A balanced, reasonable, non-partisan take
I think blanket tariffs are dumb don't get me wrong.
But tariffs have been used in the car industry for decades. If you got rid of them completely within 5 years the American car companies would be closing plants.
The whole reason Japanese auto manufacturers build plants in the US was to avoid tariffs. Shipping costs are actually incredibly minimal for a vehicle.
So in my opinion, we've seen where they can work. If you value American jobs anyways. It does get hard to math out when you have to weigh the money the average consumer would save over the 10 million auto jobs in the US.
What if, instead of all of us paying in order to have a car industry, we take that tax money and pay to an ecological restoration industry or functioning healthcare industry or whatever. Have you seen the map of superfund sites? Statistically speaking, you are almost certainly living within 10 miles of a superfund
https://epa.maps.arcgis.com/apps/webappviewer/index.html?id=...
There is a LOT of other work we could be doing if we stopped trying to uphold existing uncompetitive industries
Transportation is like farming and yielding ownership of critical industries gives foreign adversaries too much leverage.
I’m with you though. If humans could just get along we could build an amazing world.
Japan, India, Germany, Mexico, etc all have massive auto manufacturing industries. If we're at war with all of those countries at the same time then maybe we deserve what's coming
China only became an auto industry power house in the 00s.
I wonder if the argument turns on Michigan being a helpful state in presidential elections - many other parts of the Midwest have lost their former industry and fallen on hard times.
That sounds to me like spending money to fix broken windows, rather than building our own windows (and not buying the old windows that were always breaking)
> It does get hard to math out when you have to weigh the money the average consumer would save over the 10 million auto jobs in the US.
Not that hard to math out, the deadweight loss of tariffs is always non-zero. IIRC there was a pretty good paper that mathed out the impact of Obamas tire tariffs and concluded that it cost the economy significantly more jobs than it saved.
That's pretty much impossible. If it costs a company 1% less to make a widget that takes 1000 hours of labor to make it overseas instead, the company is incentivized to move overseas.
The thousand of hours labor, the material to source the widget, the real estate for the factory, the transportation now all occurs overseas.
At the very least, you can't spew something like that then not even bother to link a source.
https://www.piie.com/publications/policy-briefs/2016/us-tire...
Ratio of 3 jobs lost per tire job saved.
> The thousand of hours labor, the material to source the widget, the real estate for the factory, the transportation now all occurs overseas.
This frees up massive amounts of capital that is more effectively spent playing to Americas strengths, this isn’t a zero sum game.
Don't American cars have some of the lowest levels of reliability?
I'm not super educated on all the happenings in the car industry globally, but I've seen a few videos of Chinese EVs that put anything Ford, GM or other US brands have put out to absolute shame.
The purpose of the US auto industry is primarily a jobs program and secondarily a way to ensure the existence of supply chains for national security. The fact that it produces cars is tertiary at best and explains the quality of vehicles it produces.
I think American car companies are orthogonal to the question. The larger point is that _Japanese and German_ cars for the American market are largely themselves American by many important metrics.
Something something competition.
I am confused by your logic.
You start off with
> I think blanket tariffs are dumb don't get me wrong.
Then add a conjunction and use a single example to just make a point opposite to what you started with.
> So in my opinion, we've seen where they can work.
I can't help but think that you don't believe blanket tariffs are dumb because it worked for one industry and helps American jobs. Just start with that please.
I mean no shit though? People calmly said this in Trump's first term where he (unsuccessfully) first tried to go tariff crazy. What does it add though? Nobody is freaking out saying "all tariffs are bad", they're saying "blanket tariffs for no/the stupidest reasons possible are bad".
And "tariffs that are utterly unpredictable and can change after barely-concealed bribery" are unhelpful to plan a business around.
Tariffs are import taxes. The pre-Maga republican party used to be against taxes.
There's no hypocrisy because deep down they never had any principles. Principles they did profess were just marketing. (This applies to Dems as well, while we're at it.)
> This applies to Dems as well, while we're at it.
I disagree with this both-sideism. Democrats are much more in following with norms, where MAGA-era FKA-republicans will through anything aside for their benefit (e.g. Merrick Garland).
I think this is a misunderstanding the party used to be against taxes for wealthy people and corporations, they never cared about taxes on consumers.
One way to view the history of the Republican Party is a power struggle between Wall Street and regional/small business owners. Wall Street understands that the U.S. consumer economy depends on international trade to provide cheap, abundant goods and so supports free trade, immigration of skilled workers, and foreign aid/interventions to further U.S. business interests. For them, the culture war and nationalist rhetoric is a way to get Republican voters riled up but they don't really believe any of it.
The regional/small business owners are always threatened by competition from larger international firms and benefit less from international trade. They believe in the nationalist rhetoric and are opposed to free trade because it undercuts their businesses with cheaper products. They think the U.S. can remain the world's superpower without running a trade deficit and doesn't need to build alliances to maintain its power. This is Trump's base, and their misunderstanding of U.S. power is why they love the idea of tariffs. (good for local producers!) They want to get all the benefits of being a superpower without any of the costs.
Pre-maga republicans also used to be pro open borders! A lot has realigned in the past decade or so.
They also wouldn't have tried using a holstered weapon as pretense for a public execution which the president doubled down on, until he didn't. They wouldn't be treading on state's rights so openly either. We might be seeing parties flipping, in very short order.
If the Dems pick up on some of the issues the Republicans are neglecting, while maintaining principles* about healthcare access and reproductive rights I expect they'd be the dominant political force in America for some time...if they just had somebody who could man the helm.
* Hah. What principles?
calling everything that isn't hypermilitarized border control "open borders" is getting old
Taxing and spending is so much fun even the Republicans can't resist the temptation
They are only spending the money on domestic policing and pocketing the rest, most recently in a Qatari account...
Similarly, the people loudly protesting tariffs are traditionally for higher taxes.
Those people are generally for higher taxes on the rich. Tariff are a flat tax that dis-proportionally affects the poor.
Every tax ever implemented by government has been initially sold as a tax on the rich. The people voting for it assume they will never be taxed because they aren't currently rich. But, there is never enough of other peoples money to spend. So, taxes expand and/or increase to include more people.
The original income tax was sold as 1% on mid income and 2% on high income. At the time more than half the country was not going to pay any tax.
Maybe because the rich consistently lobby and weasel their way out of paying their fair share so the burden on everyone else continues to rise?
Which is why the current administration and their (very rich) backers prefer tariffs to income taxes...
I believe these loud people are mostly for taxes on wealth vs. direct taxes on consumption, as the latter affect lower classes more acutely.
The proven recipe for success is buy more, earn less
Well, typically for higher progressive taxes. Tariffs are typically a regressive tax.
> higher taxes
...for the wealthy. Tariffs are use taxes and overwhelmingly affect the 99%.
For the wealthy, or for high earners? I have never seen a proposal for an income tax that grades with your net worth. They only grade with your income.
There are just so many misconceptions about how taxes, finance, economics, etc. works that it can be exhausting. And it's worse when people in positions of power make no effort, or even make an effort in the opposite direction, to educate people on how things work in reality.
It might shock you to ask around your social circle and discover how many people would read a hypothetical headline like, "Tax Rate for Top Income Bracket Increases to 55%", and interpret it as, "Wow, so if my income was as high as that, more than half of what I made would go to the government. Crazy!"
The point of tariffs is that domestic products are more appealing isn't it? It's expected that foreign selelrs just add the tariff to the cost of their product so..
1. 90% instead of 100% is pretty good 2. kind of irrelevant, a better question is how much more money went to domestic companies rather than foreign?
The public needs to understand that tariffs aren't meant to punish other countries (which is what is being sold) - they are meant to change domestic behavior.
> they are meant to change domestic behavior.
What domestic behavior specifically?
If they're supposed to encourage industrial development at home, they've failed on that front. Building new factories requires years of commitment and billions of dollars, but the current administration has shown no interest in actually investing in that development. Meanwhile, the raw materials that would be necessary for a factory are more expensive precisely because of the tariffs, making new industry even less likely. Finally, the very dubious legal ground on which the tariffs are based means that no one is sure they'll be around to the end of this administration, much less into the next, so there's little interest in adapting long-term plans to a temporary state of affairs.
If they're supposed to encourage consumers to buy domestic, they've failed on that count too. Many goods simply are not available manufactured in the US (see above). If the tariffs were applied gradually and incrementally, maybe people would adapt, but from the consumer's mount of view, everything just gets more expensive, so what are they supposed to do? Again, applying tariffs to raw materials means that it's impossible for American businesses to undercut foreign imports even if they wanted to.
Like everything from this administration, the tariff are an impulsive decision based on poor economic understanding and incompetent execution.
They are meant to tax lower income people who spend a large percentage of their income on necessities.
In other words, they are a regressive tax --- pure and simple.
They are a little bit like a sales tax, except only for things not made in this country.
Like, at least 50% of the things you use every day, from phone and laptops to kitchen utensils.
For today, sure. People act like 365 days is long enough to change consumer spending habits, and onshore production facilities that took years to offshore.
If tariffs are held strong, there will be two possible outcomes:
1) Domestic production will be increased (via American businesses as well as onshoring foreign businesses), providing jobs and ultimately lower-cost products
2) International tariffs will be decreased across the board - resulting in a more level field for American businesses to compete in foreign nations
Few realize American goods have been tariffed internationally for decades, resulting in a difficult-or-impossible business climate for American businesses.
The situation is akin to Wall Street's infamous short-term outcome favorability. Tariffs are a long-term game, and people have to be willing to trade some short-term outcomes for the long-term economic health of America and it's businesses (and jobs, wages, etc).
Sure, they work via changing domestic behavior. But the purpose of that change is what's important. They can be used to gently (as compared to sanctions) shift demand away from a particular country, or alternatively to apply pressure to a sector to bring it on shore.
> They can be used to gently (as compared to sanctions) shift demand away from a particular country
That works when those countries are selectively tariffed while others are let off. Blindly applying tariffs to whatever satisfies the mood is not the way.
> or alternatively to apply pressure to a sector to bring it on shore.
For this to work, the cost of onshore production must be lower than the tariffed price. The inputs must be made cheaper and not tariffed. Again the US administration is not doing any of these strategically.
Agreed. I wasn't meaning to imply anything one way or the other about the current US tariff regime.
> The inputs must be made cheaper and not tariffed.
Not necessarily. It's presumably not as efficient, but you'd still expect the entire chain to head in the desired direction eventually.
"Sure, they work via changing domestic behavior. But the purpose of that change is what's important. They can be used to gently (as compared to sanctions) shift demand away from a particular country, or alternatively to apply pressure to a sector to bring it on shore"
I have talked to some purchasing people at my company and it seems it's going exactly the other way. The company is moving as much production as possible away from the US to serve the international market without paying for tariffs.
>aren't meant to punish other countries
The purpose of a thing is what is does. If a tariff can be used to stop a war, then tariffs are meant as a strategic bargaining chips.
That's the real intent of tariffs "in general". Trump's tariffs in particular, though, are specifically meant to punish / shake down other countries.
And the industry leaders in our own country.
I have a feeling we should blame English, the language
Tariff can hardly to connected to tax
In Chinese , tariff = 关 税 = port tax
Yeah it should just be called import tax.
I bought some 30 dollar beer glasses from Belgium. Got a 60 dollar tariff bill from FedEx after the fact. Edit: apparently fedex fees were most of this?
FedEx has always charged a brokerage fee, that is and has always been ridiculous. The brokerage fee in some cases exceeds the actual taxes and duties.
That is to say there is no 200% tariff on cups.
[1] - https://www.fedex.com/en-us/ancillary-clearance-service.html
That makes sense, I didn't even really consider it would be fedex charging me that much.
Sure, Fedex/UPS's brokerage fees are legendary for small shipments. The problem is better stated as the removal of the de minimis threshold.
So in this case an American is still paying for the misguided close-the-barn-door-after-the-horse-ran-out policy, just with most going directly to the corporate interests that helped install this corrupt administration.
(but the joke is on them - Aliexpress Choice doesn't charge brokerage fees)
Brokerage fees are a business decision. USPS only charges about $5 for dutiable international parcels - and with 15 years in logistics I can confidently say they often don't even charge that fee at all.
Tariffs are designed to change consumer spending habits, and force international businesses to create on-shore operations. To that end, they are effective - but it takes longer than 365 days for those patterns to shift.
> misguided close-the-barn-door-after-the-horse-ran-out policy
> helped install this corrupt administration
I dare say your opinion, here, has nothing to do with the efficacy of tariffs. Tariffs have long been studied, and both major political parties have called for tariffs like we're seeing right now at various points in recent history. The only difference is nobody desired to rock the status quo, so the lopsided economic policies of the past persisted.
Nearly every other nation tariffs American goods in some way. American businesses attempting to sell products into Brazil, the UK, Germany and more are - and have been - at a significant disadvantage for decades due to high import taxes and duties. For the first time those international businesses are feeling the same consequences as their own nation's weaponized economic policies. Perhaps that will put pressure on their governments, achieving the ultimate goal of the USA's policy - reduce and/or remove tariffs across the board. ie. Fair Trade vs. Free Trade.
> Brokerage fees are a business decision
I didn't say they aren't, rather I focused on the higher-level context which seems more relevant.
> the efficacy of tariffs
I'm not arguing against tariffs in general. I'm taking issue with applying them twenty years too late (after entire industries have wholesale moved away), in an arbitrary, capricious, and illegal manner (dubious for encouraging long-term investment), while expecting them to create well-paying domestic jobs - the only ways to compete with Chinese labor prices are creating domestic "lights out" factories (which given the regime's continued rolling out the red carpet for cross-border capital, likely won't even be American owned), or devaluing our currency to turn our country into an impoverished manual-labor work camp of the type that China worked desperately to move beyond.
As I alluded to with my last parenthetical, I expect the main outcome to be further erosion of what domestic industry we have left (eg Amazon [0] is less competitive, but also any last-step value-add manufacturing / productization) in favor of an international just in time supply chain where this new national sales tax is only paid after a consumer has bought the product.
[0] I could see Amazon just moving most operations to customs-bonded warehouses though.
There's an old saying:
The best time to take action was yesterday. The second best time is today.
Tariffs are a long-term economic policy. It will take longer than 365 days to change consumer spending habits and onshore foreign businesses/production and rebuild domestic businesses/production.
Most countries have tariffed US goods for decades. The US tariffs on foreign goods will, over the long term, convince foreign nations to reduce or eliminate their tariffs on US goods (creating a more fair business climate for US businesses), and/or increase domestic production (creating jobs, salaries, taxes, etc).
We can't act like it's just too late to do anything about the lop-sided economic policies of decades-past, and we can't act like changing those policies today is nothing but doom. There will be a restructuring - a period of time to adjust - and then things will be fine over the long term. It just takes time and the political will-power to do so.
So then,
The best time to close the barn door was before the horses ran off. The second best time is today.
Does this make sense? Especially as a plan for getting the horses back?
Markets are not computationally smooth, rather they have structure. China recognized this, which is why they've been using government policy to keep their prices low to make industries get over the activation energy of moving there. Once those industries are there, that structure then gives them leverage which "we" (ie our leadership class) are only now waking up to.
> We can't act like it's just too late to do anything about the lop-sided economic policies of decades-past
I'm not. There is another comment of mine in this thread pointing out how Americans have been getting fleeced for decades by not spending the proceeds of having the world reserve currency on mitigating the problems of having the world reserve currency. What I am saying is that tariffs, especially as being championed right now, are more like hopium rather than actually confronting the problem.
> we can't act like changing those policies today is nothing but
The doom part comes from having an incompetent dictator-wannabe President who is at best applying a cookie-cutter approach that is decades out of date, but more seemingly just using these levers as threats to personally enrich himself. Which is why he is also using tariffs against longstanding allies, thus prompting them to revisit why they are harming their own economies by tariffing China.
> the political will-power to do so.
What I see is the political willpower on this topic (and other longstanding problems) being abused to not actually address those problems, but rather just to facilitate the next con job on the American people.
Yes.
This is what a tariff is.
Exactly. You make it more attractive to do business with someone domestically by increasing the cost of doing business with nations that subsidize their exports or undercut your companies with slave labour or lax environmental regulations. Over the long term, domestic capacity either grows or emerges to take advantage of business models that were unprofitable due to impossibly cheap imports before.
> by increasing the cost of doing business with nations that subsidize their exports or undercut your companies with slave labour or lax environmental regulations
This is why the ”overregulated” EU got hit with a 30% tariff?
US consumer inflation in 2025 was 2.7%, so clearly the impact on consumers from tariffs was minimal.
Almost no change in economic policy has immediate effect, including tariffs.
Those are exactly the groups that are meant to pay for the tariffs.
A factor in this that is not mentioned is that companies selling goods to the US may have made an effort to lower prices, altering production to lessen tariffs or in other way tried to offset the extra amount US consumers have to pay.
An estimate of that would be quite interesting.
> may have made an effort to lower prices,
Isn't that the 10% in the article? That's the mechanism by which "China pays the tariffs".
X "pays" the tariff by losing US business.
Many carriers recoup the tariff from the shipper if recipient doesn't pay, rendering DAP Incoterm meaningless.
So this 10% might also simply represent de facto theft from foreign business.
Prices go down when overall demand is lower, but it also goes down for the rest of the world.
FED blog post: https://libertystreeteconomics.newyorkfed.org/2026/02/who-is...
If tariffs are bad, why does every country tariff US-made products so heavily?
Maybe you have been fed a lie?
In most free trade agreements many products are without tariffs, some have quotas and others yet have tariff. For example, under CUSMA Canada have no tariffs on US made apparel and footwear, diary is under quota and steel has 25-50% tariffs. But then if you hear someone who lies a lot and has an agenda they will only tell you about steel tariffs and make you think that all US made products are under tariff.
So why is there a 25-50% tariff on steel?
Well that's the big question. Do they? Like, why was a 15% tariff imposed to products from here in the EU? And why was Trump toying with the idea of imposing extra tariffs on my homeland of Finland alongside Denmark, Norway, Sweden, France, the UK, Germany, and the Netherlands for sending troops onto Greenland -- after having insulted the whole lot of us -- and of course also to France for daring to not join Trump's little "Board of Peace".
Even if there were massive tariffs towards the US, these are clearly politically motivated economic attacks, not motivated by economics. And that's not a thing an ally would do, regardless.
> If tariffs are bad, why does every country tariff US-made products so heavily?
That's an easy question. The answer is "they don't."
USMCA/NAFTA guaranteed free trade with Mexico and Canada.
Pre-2025, there was no blanket tariff on US goods in Europe. They tariffed some agricultural goods at 11%. Industrial goods were in single digits.
The tariff numbers that Trump purports (e.g. blanket 30% tariffs on Switzerland) are in no way proportional to their tariffs on US goods. It's just false.
The lie that other countries had massive blanket tariffs on all US goods is being sold to the American public to justify massive so-called "reciprocal" tariffs that (a) violate existing trade agreements, (b) make things expense for the American consumer, (c) don't necessary encourage new businesses in the US.
> justify massive so-called "reciprocal" tariffs
I just want to point out that this "reciprocal" nonsense was in no way calculated or strategic. The chart/table they showed was literally LLM-generated and no one could explain how they got those numbers. It's a complete circus and we're sitting here refuting bullshit everyday.
They didn't. Not until Trump started tariffing them. (I don't have time to find references, but Paul Krugman has you covered for data and analysis.)
All Trump's policies assume he's playing a single-move game where his is the only move. It turns out it's an infinite game and the other side actually has free will and competent decision makers. He can't just wish people into the cornfield as he promised.
I’m honestly surprised it’s that low. I fully expected it to be over 100% as companies used it as a chance to line their pockets just a little more and blame it on someone else.
Good. Secular declines in consumption from the US would be healthy.
Whether the money is coming out of US consumers and businesses or out of Chinese businesses, where is the money going? How is it being used?
It goes into the Treasury Department's general fund, where it's used as part of the federal government's overall budget
Source post: https://libertystreeteconomics.newyorkfed.org/2026/02/who-is...
Related previously:
American importers and consumers bear the cost of 2025 tariffs: analysis
https://news.ycombinator.com/item?id=46680212
There is only a debate on this topic because propaganda works. It's a regressive tax, which disproportionately hits consumers.
Whether a policy decision creates effects that "harm" consumers isn't the only facet of international trade policy that has to be considered. In fact, it may be one of the least important depending on what exactly that harm is.
Exactly, it is regressive. Lower income spends higher proportion of income, therefore higher percent of income is hit by tariffs.
You know what all the poor people are bitching about right now? Power bills.
Which is why pushback against datacenter builds has begun..
So if that's the case and the tariffs are high enough then manufacturers should rejoice and go all local but if they can't then the economy may tank
The tariffs are just another variation of the Republican dream of replacing income tax with sales tax and so reducing the tax burden of higher incomes. Nothing new here.
Many carriers also effectively stopped honouring DAP Incoterm. If consumer doesn't pay the tariff within 2 months or so, they charge the shipper.
See FedEx for instance:
14.6 Regardless of any payment instructions to the contrary, the Sender is ultimately responsible for payment of duties and taxes and all fees and surcharges related to FedEx’s disbursement of duties and taxes if payment is not received. If a Recipient or a third party from which reimbursement confirmation is required refuses to pay the duties and taxes upon request, FedEx may contact the Sender, for the same. If the Sender refuses to make satisfactory arrangements to reimburse FedEx, the Shipment may be returned to the Sender (in which case, Sender will be responsible both for original and return charges) or placed into a temporary storage, general order warehouse or a customs-bonded warehouse or considered undeliverable. If Transportation Charges for a Shipment are billed to a credit card, FedEx reserves the right to also settle uncollected duties and taxes charges associated with that Shipment to the credit card account.
I just got a DHL shipment from the UK. They indicated I (the receiver) needed to pay the tariff or the shipment would be returned to the sender within 1 week.
It sure sounds like they aren't going to charge the shipper. And I can't blame them for not wanting to be left empty-handed.
This has been in FedEx's terms for at least two decades.
Not exactly. The most significant change in the 2025 language is the explicit right for FedEx to automatically settle uncollected duties and taxes against the credit card used for the initial transportation charges. Previously, FedEx would typically issue a separate invoice for duties and taxes and attempt to collect it via standard billing cycles.
In short, they now often release shipments without attempting to collect payment from the recipient and charge the shipper.
Any person minimally experienced in commerce (possibly in a less developed country) would know that they experienced this already
Drop in quality, increase in prices across the board. Thanks Trump!
paywall: https://removepaywalls.com/https://www.ft.com/content/c4f886...
The US has needed to raise taxes for decades given the level of spending the federal government does and constant "relief" packages that everyone now expects the minute there's a downturn.
The runaway deficit is a massive problem now given the age of 0 interest rates is over.
So what's astonishing is, whether you like him or not, the Orange man actually got the American public to accept what is defacto the largest tax increase in decades.
Unfortunately, they immediately spent that money too on the promise of persistently high growth in the world's richest economy. I find that unlikely over time, but time will tell.
Seems every large Western country is currently hell bent on finding out what level of deficit spending results in societal collapse.
He successfully raised taxes on poorer Americans while providing an even larger tax cut to the richest Americans. He also gutted the enforcement arm for said tax collection.
Netting it out, it’s a loss in revenue that disproportionately helps the richest and taxes the poor while making the government revenue decline. While also making the US dollar decline, multiplying the losses.
> What's astonishing is, whether you like him or not, the Orange man actually got the American public to accept what is defacto the largest tax increase in decades.
What does it mean "got the public to accept it?" The public had no say and these are probably illegal. On top of that, he probably literally does not know that these are effectively taxes on consumers (i.e. he believe his own bullshit).
No credit is due here whatsoever.
This was a huge part of the platform that the US overwhelmingly voted for in the last election. People wanted this.
Yes, I'm sure he believes his own bullshit, but ironically, its bullshit that the US actually needed to pull (tax increases). Modern democracy has proven totally incapable of not stealing the future from its children.
“They wanted this” but the people who voted for this did not have the mental capacity to sort fact from fiction with respect to tariffs. So this falls flat.
> its bullshit that the US actually needed to pull (tax increases).
Did you forget that the Big Beautiful Bill included a massive tax cut?
Congratulations Trump fans --- you voted for a big new tax --- on yourself.
Stupid is as stupid does.
The different between taxes (you -must- pay (unless X loopholes applies to you)) whereas tariffs are voluntary and even more so then sales tax.
You may chose not to buy any products or goods that requires you to pay tariffs.
Which is the primarily goal to begin with. Influence consumer behaviour.
I realize that for some products and goods there may not be a an alternative choice of products or goods that do have tariffs.
In theory, over time, these will be increasingly replaced by products and services that have the competitive advantage of not having to tariffs applied to them.
Once tariffs are in place for a year or two it is possible that, domestic producers have expand capacity, have created jobs have caused supply chains shift and new production is based on the tariff based price structure
This however takes time. And to what extent it happens is not easy to predict.
Some may think that the next president will remove all tariffs the moment he or she takes office, so it is a short term problem. The problem with removing them all, is if the above has happened, and removing them will destroy American jobs.
There's certainly a case to be made for targetted tarrifs, legally enacted, to support specific industries.
The problem with broad tarrifs by executive order under emergency powers to address longstanding issues are numerous.
Longevity and stability of the tarrifs is questionable because a new executive is likely to cancel them, the executive that issued them is likely to cancel them, and they may also be cancelled by the courts because their basis isn't solid. For some goods where production is easy to shift, it still makes sense to move it ... but then it's easy to shift out again when the winds change; goods where setting up production is a many years thing aren't likely to move with the winds.
The broad tarrifs mean that for goods that are manufactured from components of many origins, it may not make sense to pay tarrifs on the components in order to reduce tariffs on the finished goods. Or that it makes more sense to move manufacturing from one foreign country to another than to move to the US. I get it if you want to move both manufacturing and resource extraction to the US; but it would make more sense to do it one step at a time... first develop demand for the resources in the US, then push to onshore the resource extraction... OTOH a lot of americans prefer resource extraction to be out of sight, and some resources are simply not abundant here.
The other factor is that many countries respond to our broad tarrifs on their exports with their own tarrifs on our exports. This can easily hurt US producers more than it helps them. US products become more expensive in those countries due to their import tarrifs as well as US import tarrifs on the inputs and often there are many non-US suppliers to choose from; possible increases in US domestic demand may not materialize because costs will go up for US consumers as well due to tarrifs on input and potentially loss of economies of scale if the reduction in exports is significant.
I may be a free trade maximalist, but IMHO, the current admin's tariff policy is a recipie for economic slowdown. Which does help their goal of reducing immigration: the best way to reduce economic immigration is to have a deeper recession or depression than the world at large; it also helps with traffic. Big inflation numbers also push stock indexes up and reduce the cost of servicing old debt, but increase the cost of revolving and issuing new debt.
Once tariffs are in place for a year or two it is possible that, domestic producers have expand capacity
Once tariffs are in place for a year or two it is possible that consumers will be paying higher prices for inferior goods from providers that can't compete elsewhere.
In other words, there are both positive and negative effects --- and no clear way to predict which will prevail.
It's 19 century economics applied in the 21st century --- it's direct government interference in the marketplace --- the opposite of what Republicans spent decades railing against.
> Once tariffs are in place for a year or two it is possible that, domestic producers have expand capacity
That's how tariffs would work if wielded for the right reasons. But now domestic producers have to pay tariffs on the very machines and inputs needed to expand capacity.
So in theory, domestic suppliers of those machines and inputs should eventually be viable.
Oh yeah totally. Easy peasy
Industrial jobs are down since tariffs went in
The problem is, the rest of us who vehemently opposed him (and still do) get to pay the idiocy tax too.
"A big beautiful tax."
FT is a globalist mouthpiece.
I don’t support tariff but it being used as a negotiating technique is the only choice here to reduce trade deficit.
US can’t keep up the trade deficit it currently has. It requires endless fiscal deficit and sell paper money to others that sends their cheap stuff to US. With growing deficit, the interest payment now is soon to be higher than defence budget. Something has to give.
When will we see the lower interest payments as a result of the tariffs, and how much lower will they be? The initial signals are in the opposite direction as your comment indicates. Maybe it’s a short term pain for long term gain: but when, and how much, and what is the evidence that will be true?
Because it seems more likely to me that we have a greedy moron in charge who doesn’t mind his “business” (aka our society) loses trillions as long as his family and friends make billions.
Oh so now government data from the institution under massive pressure from the administration for politicizing interest rates is believable because it reinforces your preconceived notions?
Typical. 1) No, tariffs are not always paid by the end consumer, producer margins collapse also. 2) If the end consumer can pay increased prices then the previous price wasn't properly efficient. 3) Short term vs Long term matters most in the actual outcome of prices as domestic competition takes time to build. 4) Interest rates are being kept high to produce a reportable outcome.
End the Fed, then lets see where we are. Otherwise, stop trusting banks because you hate the used car salesman.