I really like watching his videos. He’s got an amazing memory, including recall of scripture. I think he could have been a hell of a sleazy televangelist if that is how he chose to use his talents.
Does Trump still not understand that the money from the tariffs does not come from the exporting country and is instead paid for by the importing company in the US that then passes it on to us? Or does he think YOU dont understand that?
Given his past statements that he thinks the countries will “eat the tariffs” I can only assume he thinks you all dont understand it.
So just in case you are one of those people he thinks doesnt understand it… Tariffs do not cause billions to flow in from other countries, it causes American companies and consumers to pay further billions for those same products. Other countries do not pay the tariffs Trump is putting on products, Americans do.
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https://www.congress.gov/crs-product/IF11030
[quote]
How Is U.S. Tariff Policy Administered?
The Secretary of the Treasury is charged with establishing regulations on the collection of tariffs and U.S. Customs and Border Protection (CBP) administers those regulations at U.S. ports of entry.
When a good enters a U.S. port of entry, merchandise is classified and tariffs are assessed using the Harmonized Tariff Schedule of the United States (HTSUS), a compendium of tariff rates based on a globally standardized nomenclature. Today, importers self-classify and declare the value or quantity of their goods. CBP reviews the paperwork, performs occasional audits, and then collects any applicable tariffs or penalties as well as any administrative fees. Finally, CBP deposits any revenue from tariffs or other penalties into the General Fund of the United States.
[/quote]
. Read it yourself.
Have you considered the possibility that you may not understand economics and international trade?
Americans only pay for tariffs if we choose to buy the imported item, and we only choose to buy the imported item if it is rational to do so. Generally-speaking, foreign exporters will still want to sell their product in the USA, so to remain competitive, they will lower their sale price with the tariff in mind to remain as competitive as possible. A 15 percent tariff could, after it all shakes out, only result in a 5 percent price increase, with the rest being absorbed by the previous profit margin.
Your explanation assumes that there is some kind of mandate to buy the imported item. There isn’t. People were buying it because it was the best option for them. Domestic buyers may agree to eat the entire tariff and continue to import at the previous sale price, but the importer may also do a little thing called negotiation.
You are right that tariffs get built into international purchase agreements, but the sale price is also negotiated in the same agreement. Your view is overly-simplistic, typical of most anti-Trump arguments, leaving out other important factors to consider.
If tariffs were dumb and destructive, why do so many countries have them on our products? Were these countries all ignorant Trump worshippers decades and centuries before Trump was born?
In actual practice the additional cost of tariffs, like all costs of importing, is negotiated between buyer and seller in the purchase agreement. This is where incoterms can come in, and in certain cases, the exporter is responsible for paying the tariffs, along with other import fees.
It all gets built into the total price in some shape or form, but it is not true that a 15 percent tariff automatically involves a 15 percent increase in total price.
Further reading:
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I don’t think anything you wrote addresses anything I said at all
for example I never called them dumb or destructive, I only asked if trump understands who pays it. Because he is outright stating that the country the product comes from is paying the tariffs
Why the cynicism? Mexico built us a wall, didn’t they?
Pay attention!
As I suspected, you don’t understand how international trade works. I have negotiated many international purchase contracts and purchase orders. They don’t work the way you describe.
Money is fungible and purchase agreements are negotiable. The question of “who pays?” will vary depending on the item and agreement when you compare it to a pre-tariff purchase agreement for the same product.
In many cases the seller will eat the entire tariff to continue doing business as usual. In some cases they may not. It all depends on who has the leverage in that situation. If I’m buying specialized machinery only manufactured by one company in Germany for a very specific engineering application, the seller will have more leverage and the buyer is more likely to eat the tariff, generally-speaking.
If the buyer is in a long-term partnership and a valued customer of the exporter, with other options for supply domestically or internationally, the seller is more likely to reduce the sale price to remain competitive, generally-speaking. In that case the seller does, in fact, “eat” the tariff cost.
The situation can change even more over time, as exporters to the USA are now artificially incentivized to develop a supply source here in the USA or in another country that’s not subjected to the same tariffs.
Trump may be partially incorrect if, as you say, he has said that foreign countries pay 100 percent of the tariffs. Your explanation of how they work is not correct at all, either.
Did you know that Milton Friedman thought tariffs were bullshit? A tool to benefit few instead of many.
Tariffs are complex topics for sure, but costs will go up, at least in Europe. Long term effects are yet to be seen. Might be that Europe starts bying more stuff from China, which is something I’d rather not see.
They also might speed up inflation, but that’s term that we don’t agree on, so let’s leave it out.
What if our economy is far and away the biggest and best in the world, Specifically because we don’t have tariffs?
Like, if we’re the best, with no tariffs, why would we look to worse countries for examples to follow?
Yeah, they are bullshit strictly from a perspective of keeping costs as low as possible, but so are a lot of other trade practices. When you compete with bullshit like de facto slave labor, massive government subsidies designed to strategically weaken American supply chains, Somalian pirates hijacking cargo vessels, bribes to customs agents, and other forms of bullshit, some bullshit of your own can have useful applications.
IMO tariffs are best seen as a tool of international diplomacy, which is how Trump seems to be wielding them.
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It is cool that Pres Trump is planning to use tariffs to smack India and China into line and get them to stop buying Rusdian oil. Pres Biden seemed to have no answers and no way to pressure Putin effectively.
It’s unfortunate that US producers are Raising their prices to match the increased prices of foriegn goods that have been subjected to tariffs. It’s not supposed to work that way!
I don’t disagree. I actually think Friedman as a utopistic liberal thinker. He had a lot of economic ideas which were great on paper, but in real life stuff like global economy will never be fair.
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What good is a cheap toaster if you don’t have a job!?
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Yeah. The fly supplies co. I worked at (small, 4 of us) imported a good bit of product.
It just becomes part of the base cost, pre mark up. After that, a lot more money is made on sale and resale than what ever was paid on tariff.
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If we truly embraced a global free market, American steel producers wouldn’t be in business anymore. Sure, we’d have cheap steel as long as China, Brazil, et al continue to supply us with it, but what if they decide not to for some reason like, I don’t know, a war?
The cost of that lack of supply is potentially FAR greater than the cost of tariffs or regulations like DFARS. DFARS is why American defense contractors pay higher prices for things like specialty metals, which must be sourced from NATO members. That way, if a war breaks out, we can still get the specialty metals we need for the economy to function because we have the supply chain intact already.
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Surely. EU has also limited it’s trade towards these countries.
I’m all for trans-atlantic (US-EU) trade though, besides other forms of co-op. Interesting to see how these will turn out ik the future.
When has that ever happened since we became a nation?
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Yeah. A complete utopia. Like I said, Friedman was an utopist. Instead of a communist utopia, he had a capitalist utopia.
PS. I just brought him up, since twojars referred to him when there was talk about inflation earlier.
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