It will never cease to amaze me how stupid people are. How in the everliving goddamn fuck could a tex on imports ever lower prices?
If you want to have domestic products you'll need to end outsourcing and do industrial policy. These things don't spring up over night and this just proves that Trump has no fucking clue about business, economy or trade. He's running this like a mob boss and is just trying to force countries to bend the knee and kiss the ring so that he'll make the tariff go away. He will destroy the US economy to give himself an ego boost.
A LOT of trump supporters think the country the import is coming from pays the tax. Rather than the consumer here. They just don't understand how anything works.
I get that. But even if it worked as they think, the outcome is the same. Whether it's the importer, the manufacturer or the Chinese government, the extra money is, ultimately, baked into the retail price.
Now I'm curious. Let's say there existed a mechanism by which the U.S. Treasury would be remitted tariffs by the Chinese government. How would that be passed onto the consumer?
Temu has an item that costs $100 to manufacture and ship to the U.S., which tariffs it at 54% (about where we are) and the Treasury bills the Chinese government for $54 in tariffs. My assumption is that the Chinese government is not going to simply start cutting checks for tariffs it paid; they're going to go after exporters to recoup them.
Temu needs to get at least $100 out of the sold item to cover its manufacturing and shipping costs plus $54 more to reimburse the government. That money doesn't come out of thin air, so they raise the retail price of the item enough that they get their $100 and the government gets the $54 they're owed. There is a vicious circle in that, because raising the retail price to $154 would result in $83 in tariffs instead of $54. Lather, rinse repeat. This is why importers usually get hit with tariffs instead of exporters.
My assumption is that the Chinese government is not going to simply start cutting checks for tariffs it paid; they're going to go after exporters to recoup them.
That's an assumption. But there is a fundamental difference here: If you apply a new tax to a private entity, it can only absorb so much before it is no longer profitable and must go out of business. That is why taxes are, at least in part, passed on to the consumer. This would not apply if the "tax" was an intergovernmental transfer.
In any case, it's very much a hypothetical discussion as the U.S. government obviously has no such authority.
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u/embiors 1d ago
It will never cease to amaze me how stupid people are. How in the everliving goddamn fuck could a tex on imports ever lower prices?
If you want to have domestic products you'll need to end outsourcing and do industrial policy. These things don't spring up over night and this just proves that Trump has no fucking clue about business, economy or trade. He's running this like a mob boss and is just trying to force countries to bend the knee and kiss the ring so that he'll make the tariff go away. He will destroy the US economy to give himself an ego boost.