US consumer inflation in 2025 was 2.7%, so clearly the impact on consumers from tariffs was minimal.
US businesses and consumers pay 90% of tariff costs, New York Fed says
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Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#92I think blanket tariffs are dumb don't get me wrong. But tariffs have been used in the car industry for decades. If you got rid of them completely within 5 years the American car companies would be closing plants. The whole reason Japanese auto manufacturers build plants in the US was to avoid tariffs. Shipping costs are actually incredibly minimal for a vehicle. So in my opinion, we've seen where they can work. If y…
I mean no shit though? People calmly said this in Trump's first term where he (unsuccessfully) first tried to go tariff crazy. What does it add though? Nobody is freaking out saying "all tariffs are bad", they're saying "blanket tariffs for no/the stupidest reasons possible are bad".
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#93Tariffs are import taxes. The pre-Maga republican party used to be against taxes.
There's no hypocrisy because deep down they never had any principles. Principles they did profess were just marketing. (This applies to Dems as well, while we're at it.)
> This applies to Dems as well, while we're at it.
I disagree with this both-sideism. Democrats are much more in following with norms, where MAGA-era FKA-republicans will through anything aside for their benefit (e.g. Merrick Garland).
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#94If tariffs are bad, why does every country tariff US-made products so heavily?
> If tariffs are bad, why does every country tariff US-made products so heavily?
That's an easy question. The answer is "they don't."
USMCA/NAFTA guaranteed free trade with Mexico and Canada.
Pre-2025, there was no blanket tariff on US goods in Europe. They tariffed some agricultural goods at 11%. Industrial goods were in single digits.
The tariff numbers that Trump purports (e.g. blanket 30% tariffs on Switzerland) are in no way proportional to their tariffs on US goods. It's just false.
The lie that other countries had massive blanket tariffs on all US goods is being sold to the American public to justify massive so-called "reciprocal" tariffs that (a) violate existing trade agreements, (b) make things expense for the American consumer, (c) don't necessary encourage new businesses in the US.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#95Any person minimally experienced in commerce (possibly in a less developed country) would know that they experienced this already
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#96Congratulations Trump fans --- you voted for a big new tax --- on yourself. Stupid is as stupid does.
The different between taxes (you -must- pay (unless X loopholes applies to you)) whereas tariffs are voluntary and even more so then sales tax. You may chose not to buy any products or goods that requires you to pay tariffs. Which is the primarily goal to begin with. Influence consumer behaviour. I realize that for some products and goods there may not be a an alternative choice of products or goods that do have tari…
There's certainly a case to be made for targetted tarrifs, legally enacted, to support specific industries.
The problem with broad tarrifs by executive order under emergency powers to address longstanding issues are numerous.
Longevity and stability of the tarrifs is questionable because a new executive is likely to cancel them, the executive that issued them is likely to cancel them, and they may also be cancelled by the courts because their basis isn't solid. For some goods where production is easy to shift, it still makes sense to move it ... but then it's easy to shift out again when the winds change; goods where setting up production is a many years thing aren't likely to move with the winds.
The broad tarrifs mean that for goods that are manufactured from components of many origins, it may not make sense to pay tarrifs on the components in order to reduce tariffs on the finished goods. Or that it makes more sense to move manufacturing from one foreign country to another than to move to the US. I get it if you want to move both manufacturing and resource extraction to the US; but it would make more sense to do it one step at a time... first develop demand for the resources in the US, then push to onshore the resource extraction... OTOH a lot of americans prefer resource extraction to be out of sight, and some resources are simply not abundant here.
The other factor is that many countries respond to our broad tarrifs on their exports with their own tarrifs on our exports. This can easily hurt US producers more than it helps them. US products become more expensive in those countries due to their import tarrifs as well as US import tarrifs on the inputs and often there are many non-US suppliers to choose from; possible increases in US domestic demand may not materialize because costs will go up for US consumers as well due to tarrifs on input and potentially loss of economies of scale if the reduction in exports is significant.
I may be a free trade maximalist, but IMHO, the current admin's tariff policy is a recipie for economic slowdown. Which does help their goal of reducing immigration: the best way to reduce economic immigration is to have a deeper recession or depression than the world at large; it also helps with traffic. Big inflation numbers also push stock indexes up and reduce the cost of servicing old debt, but increase the cost of revolving and issuing new debt.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#97Everyone has been getting sold that these tariffs are on "China" or fill-in-the-blank on what country we're "getting" with them. The reality is that's a fundamental misunderstanding of what a tariff is. There is a reason you will find tariffs drop off after the great depression. They make everything more expensive for businesses and in turn, the end consumer. https://en.wikipedia.org/wiki/History_of_tariffs_in_the_Un…
It is baffling to me, as it is no different than thinking that "sugar taxes" are taxes that soda companies pay. There is even a straight forward analysis that shows it does impact the soda companies rather heavily. But it is objectively paid by the consumers. And nobody is really confused by that.
And nobody is really confused by that.
Yet that's not what the administration says about the subject. They're either confused or they're lying (and the people who support them and regurgitate their talking points are confused).
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#98Everyone has been getting sold that these tariffs are on "China" or fill-in-the-blank on what country we're "getting" with them. The reality is that's a fundamental misunderstanding of what a tariff is. There is a reason you will find tariffs drop off after the great depression. They make everything more expensive for businesses and in turn, the end consumer. https://en.wikipedia.org/wiki/History_of_tariffs_in_the_Un…
Very, very few people believe that. This is how it works: Republicans willfully lie to their supporters, who know it is lie, and they then knowingly pass on the lie to you. This could be your conservative friends, family, co-workers. They are all knowingly lying to you. This is a pretty simple form of debasement and a loyalty test - will you repeat this lie for me? The bigger the lie, the more loyal.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#99Earlier quoted context omitted.
I think the misunderstanding is in a combination of wording + practical application. Tariffs in the legal sense are technically paid by the importer who sells a product. It's their responsibility to pay it... always. The importer could technically eat that cost, and the consumer wouldn't see a difference on their price tag. But what happens in practice, the vast majority of the time, is the importer passes that extra…
IMO the people claiming that "technically the importer pays the tariff" are deliberately using the letter of the law to confuse and distract the main thrust of the arguments. What we mean when we ask who is paying the tariff is this: when we increase tariffs, who becomes poorer? And the answer to that is obvious.
What’s obvious about it? Tariffs mean more money stays in the U.S.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#100Earlier quoted context omitted.
Tariffs can be paid by the seller/exporter. If a very significant part of a company's business is done in the US, and the tariff is sufficiently high, they will lose market share if the customer eats the entire cost of the tariff (which is the whole point of the exercise in the first place). So they may decide to socialize this cost a little bit, by increasing prices in all countries, by a lot less than the tariff, a…
Without coercion today, why would anybody try to give the US a break at the cost of its other trading partners...?
Because the US has the strongest economy in the world.