When I heard Trump say China will pay for tariffs on that country’s goods imported into the US, I was shocked. Did he really believe that or was it just more propaganda. Given he has repeated that claim I am not sure even now.
Trump has promised to increase tariffs on imports from China by 60 percentage points and on all other imports by 10 to 20 percentage points. His insistence that this would not make American consumers and businesses pay higher prices reflects a basic misunderstanding of how tariffs work in practice.
When an importer brings a good into the United States, it pays a tariff to the U.S. government equal to a percentage (for example, 10 or 20 percent) of the price paid to the foreign exporter. Importers have essentially three choices in this situation: (1) pass the tariff along to their customer, (2) eat the tariff and suffer lower profits, or (3) renegotiate contracts with suppliers or find and then switch to suppliers with lower prices (a costly process).
- Experience shows and economists agree that tariffs lead to persistently higher prices for customers.
- Wendy Edelberg and Maurice Obstfeld highlight a less visible cost of tariffs: near-term chaos as U.S. businesses scramble to renegotiate contracts, reconfigure supply chains, and lobby for exemptions.
A key point
“Prices will rise, production will be depressed, and employment will likely fall, particularly in sectors exposed to higher input prices or foreign retaliation.”
– Wendy Edelberg and Maurice Obstfeld
Source: the Bookings Institute
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the question was simple–Biden tariffs are good??? Reagan tariffs?? if these tariffs are so bad how come the economy, in many respects, is so good?
maybe a good argument would be the magnitude of the Trump tariffs.
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That’s what the article was about greatly increasing tariffs above current levels.
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I may have a glitch in the memory but I believe I read some time back that Biden upped the tariff on Chinese EVs to protect domestic producers and I think it was to something like 100%.
The reason was China is building a capable EV at much lower cost than all the producers here. Since China is excluded here, that affects my bottom line as a consumer. I have to pay more to get what’s available, plus China slaps an increased tariff on whatever they import to make up the loss of forgone revenue.
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so a simple question–the Trump administration imposed tariffs on many foreign exporters, mostly Chinese, over the 4-years of that presidency. The Biden folks kept almost all of them and I believe added a few more. If the folks on the left think they are so onerous why haven’t we heard about it for the past 3.75 years.
Reagan imposed tariffs on Japanese auto makers and what was the result? They built plants here in non-union states and you are probably heading to Mass in your “foreign” car. I’m heading to Stop & Shop in mine in just a few minutes.
Importers are not stupid–they will lower their prices if they want to do business here or maybe move the plants to the U.S. like Toyota and Honda–have the Biden tariffs harmed our consumers–created more unemployment–created economic dislocation?
As a free trader I would like to see no tariffs on our imports or our exports but as a realist I know how the world works–there ain’t no free trade!
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Every credible economist I can find says high tariffs are counter productive and cost consumers and businesses especially exporters are retaliation occurs. In any case, contrary to what Trump says China will not be paying the tariffs, the American people will.
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Actually my car was made in Stuttgart, I doubled checked before I bought.
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