Tariffs will affect you

Tariffs are a type of tax imposed by a government on imported goods. While the importer is the one who legally pays the tax to the government’s customs authority, the economic burden of tariffs is often distributed more broadly among importers, foreign exporters, and domestic consumers.

Nobody is a net winner. There is always an economic burden. Sooner or later importers and exporters, some domestic producers will reach their limit on absorbing the extra cost.

Reduced profits anywhere along the supply chain can affect middle class American investors – including those saving for retirement.

Here is a breakdown of how tariffs affect different parties:

Importers: These are the domestic businesses that purchase goods from foreign countries. They are legally responsible for paying the tariff to their government. To manage this increased cost, they may try to negotiate a lower price with their foreign suppliers.

Consumers: The cost of the tariff is often passed on to the consumer in the form of higher prices for imported goods. This is especially true if there are few domestic alternatives or if the demand for the imported product is inelastic. That is the case for clothes and shoes in the U.S.

Foreign Exporters: Exporters in the foreign country may have to lower their prices to remain competitive in the market where the tariff has been imposed. This means they absorb some of the cost, which can lead to reduced profits.

Domestic Producers: Tariffs are often implemented to protect domestic industries by making imported goods more expensive. This can lead to increased demand for locally produced goods, but it can also raise the cost of production for domestic industries that rely on imported parts or materials.