r/politics • u/PoliticsModeratorBot 🤖 Bot • 1d ago

Discussion Discussion Thread: US Senate Debates and Considers the Republican Budget Resolution on April 4th, 2025

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u/SUNTAN_1 1d ago

The way he talks about tariffs as if they are an infinite money glitch --- "We are gonna charge THEM using these tariffs!" and is so consistent with that messaging as if he almost believes it, is almost just as psycho as "We're building a wall, and Mexico is gonna pay for it!"

Note that the "Mexico is gonna pay for it!" part was a distraction, designed to obfuscate confuse and bamboozle --- because his REAL goal was to be able to get Congress to cough up taxpayer funding for a 300 billion dollar construction project where HE would get to hand-pick and choose all the contractors and subcontractors.

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And now, tariffs. Let's simplify it, with washing machines.

(a) Five million Americans want to buy a washing machine for cleaning their clothes. They could "buy American" for $1200, or buy one imported from China for $600. EVERYONE buys the $600 washing machine.

(b) Trump announces 50 percent tariff on washing machines.

(c) HOME DEPOT, LOWES or whoever sells washing machines, keeps buying washing machines from China, but now sells them for $900 --- still cheaper than an American-made washing machine.

(d) The American Consumer ends up paying the higher price.

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u/sirbissel 1d ago

Or say there's the Chinese washing machine for $600, and the American one is for $750, tariffs hit, the Chinese machine is pushed up to $900 - so the American one decides they can slightly undercut the Chinese model but make a better profit and start selling them for $850.

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u/say_no_to_shrugs 1d ago

Except the American company can’t raise the price and make a higher profit, because these tariffs aren’t on just on manufactured goods like a normal tariff, they’re also on the commodities and sub manufactured parts, so the price of everything goes up, and the consumer pays nearly as much of a tariff on the American washer.

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u/sirbissel 1d ago

In truth, yes, but I was just making a simple illustration of why even things 100% manufactured here are likely to go up in price due to the tariffs on their competitors.

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u/share_my_filthywife 1d ago

I don’t see enough people talking about this, do folks really believe that if the cost of a European car rises by a few thousand dollars, the US made ones will stay the same price?

If you do, I’ve got a bridge to sell you!

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u/scoobysnackoutback 1d ago

40-50% of the parts used to manufacture American made cars are made outside of the US. By the way, 1 in 8 jobs are connected to the auto business.

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u/Ferelar New Jersey 23h ago

And even if we still only look at imported goods, a 50% tariff doesn't mean ONLY a 50% raise in price. There are a lot of pieces of the supply chain, and each little middle man tends to upcharge- often based on the value of the good. So if your tariff increases the price of the good at the import point, that percentage is borne through each of the middlemen who take their slightly higher cut each. So a 50% tariff could end up causing a 60% price hike or more very, very easily- even before we factor in the price gouging that could be done.

And then there's a whole 'nother angle aside from things getting pricier.... tariffs will cause a lot of companies to just stop exporting to the US because it's no longer economically viable. So you might not end up paying more for your favorite brand... because you might no longer SEE your favorite brand.

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u/RTPGiants North Carolina 1d ago

What actually happens is that some of those 5 million people now decide they don't need a washing machine after all. So only 4 million buy them. This cuts demand for washing machines which in turn means everyone involved in the manufacture, delivery, and sales of the washing machine feels a pinch. This leads to layoffs.

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u/Ferelar New Jersey 23h ago

Which causes any domestic washing machine companies to not expand, but contract as they don't see a viable demand for their good. They lay off their workers. Those workers stop spending quite as much money because now that they're laid off and prices are rising, every dollar is precious. All of the companies that were selling goods to these people now aren't making a sale, so they lose a lot of money and have to contract and lay off their work force....

This sort of deadly cycle is the kind of thing that economists absolutely dread. It's essentially the worst possible man-made disaster that can occur economically, a literal war would probably be less disastrous.

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u/catjuggler 1d ago

What will happen a lot of the time (and with pretty much everything I sell in my ecommerce business) is the China COGS are $3->$4, the US COGS don't exist but let's pretend they're $6, so now everything just costs a dollar more and nothing moves locations. The only way for a tariff to cause a move in manufacturing is if the tariff makes the American built cost less, and if it isn't high ENOUGH to do that, it won't do anything but raise costs. Maybe there are some niches where the COGS are close, it's jobs americans actually want, and where using actual strategy could have cause tariffs or incentives to move manufacturing. Or wait, wasn't that what we were doing with electric car batteries and that got cancelled? Hm