US businesses and consumers pay 90% of tariff costs, New York Fed says • Hacker News Board

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#181

Post by rubyfan » Thu, Feb 12, 2026, 6:07 PM UTC

tialaramex wrote: post #141

taeric wrote: post #40

Earlier quoted context omitted.

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.

Right, and sugar taxes are an example of a tax where there's a clear objective. To avoid the tax, don't put sugar in things if you can help it. Result: Products which had sugar because it was cheaper don't any more because of the tax, it's not cheaper now. These tariffs have a huge red flag because there's no objective. Onshoring? No, wait, we got a new deal the tariffs are removed. New trade deals? No, wait, somebod…

I think you sum up exactly why they will be found illegal.

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#182

Post by spacechild1 » Thu, Feb 12, 2026, 6:08 PM UTC

temp8830 wrote: post #157

jleyank wrote: post #86

Earlier quoted context omitted.

The end result is still higher prices for the end-consumer... If the local businesses were unable to compete with a foreign supplier w/o the tariff, they'll be unable to do it with the tariff. So the consumer will end up paying less than (foreign + tariff) but higher than (foreign).

Yes, and the gamble is that the positives from boosting domestic industry will outweigh the negatives from higher prices. The only people confused about this are NPR-constructed strawmen.

Except Trump himself repeatedly claimed that the exporting country is paying the tariffs and that the US is earning billions of dollars. And many of his followers seem to believe this.

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#183

Post by newfriend » Thu, Feb 12, 2026, 6:08 PM UTC

hackyhacky wrote: post #135

phkahler wrote: post #119

Earlier quoted context omitted.

Right. They're on goods from China. The intent is to make that stuff more expensive so we can compete.

> The intent is to make that stuff more expensive so we can compete. This would seem to be an admission that the domestic product is inferior, otherwise why would it be necessary to burden the import with tariffs? In any case, if that's the intent, it's not working out for fairly predictable reasons. Lots of imported goods have no domestic equivalent. The factories required to make them require years of investment, w…

If one country has labor protection and pollution regulations, and another country has near-slave labor and dumps chemicals into rivers, would you consider the former inferior? Unable to compete?

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#184

Post by K0nserv » Thu, Feb 12, 2026, 6:09 PM UTC

phkahler wrote: post #112

SunshineTheCat wrote: post #13

Everyone 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…

No. The point is to make foreign goods more expensive in order to bring production back to the US. People who don't realize this point out who is actually paying and claim its a problem. Will this bring manufacturing back? It seems to be working to some extent, but its a risk to manufacturers because the whole thing could get reversed after an election.

There are a few problems with how Trump is going about this:

1. The tariffs are too broad, they don't target a single or a few industries.

2. Trump has gone back and forth many times on them, using them as negotiating leverage, not as long term incentives.

3. They are on very shaky legal grounds and will likely end up getting reversed by either the Supreme Court or the next president.

If you want to use tariffs to encourage on-shoring you make them targeted and pass them with bipartisan support through congress. Companies need stability and long term guarantees for the kind of capital expenditure that is needed. Even better if you use a mix of carrot and stick, rather than all stick

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#185

Post by SunshineTheCat » Thu, Feb 12, 2026, 6:09 PM UTC

temp8830 wrote: post #103

SunshineTheCat wrote: post #60

Earlier quoted context omitted.

I know of a 10-12 employee business in my town who custom-designs kids products that are manufactured in China because they want to keep their products affordable for parents. Getting them manufactured in the US (even though they wanted to) was way too expensive and would require them to charge way above retail just to stay open. Once the tariffs dropped, their cost of goods more than doubled. Their business in that…

OK, so the custom-designed kids product becomes a luxury item and the business has to charge above retail. The kids learn that adults time is too valuable to be spent on manufacturing trinkets that get thrown away. They take better care of the few toys they do own. There is less plastic crap in landfills. Seems like a win all around?

These products were specifically designed to help care for kids with special needs. And the goal was to keep the items as affordable as possible because their customers were often on a shoestring budget for one reason or another.

Genius, though. Just have them pay more for their "luxury" items! Why didn't they think of that! They would be glad to know helping kids with special needs is a "luxury."

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#186

Post by bubbadog77 » Thu, Feb 12, 2026, 6:09 PM UTC

hackyhacky wrote: post #174

neilwilson wrote: post #161

Earlier quoted context omitted.

That doesn’t mean manufacturing is down, if new output is automated. The trade deficit is shrinking, and which necessarily means there is more domestic flow as foreign hoards of dollars are liquidated. That flow has to go somewhere. Could be straight to the tax cuts of course.

> That doesn’t mean manufacturing is down, if new output is automated. You are correct. Of course, if new output is automated, then the purported goal of the tariffs (more manufacturing jobs!) is defeated. The fact that any new manufacturing will of course be automated shows how little thought went into designing these tariffs and how transparently false the administration's promises are. > The trade deficit is shrin…

The trade deficit is shrinking because fewer goods are being imported. Producing countries are finding alternate markets that are outside of the US' punitive tariffing.

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#187

Post by FpUser » Thu, Feb 12, 2026, 6:09 PM UTC

hackyhacky wrote: post #135

phkahler wrote: post #119

Earlier quoted context omitted.

Right. They're on goods from China. The intent is to make that stuff more expensive so we can compete.

> The intent is to make that stuff more expensive so we can compete. This would seem to be an admission that the domestic product is inferior, otherwise why would it be necessary to burden the import with tariffs? In any case, if that's the intent, it's not working out for fairly predictable reasons. Lots of imported goods have no domestic equivalent. The factories required to make them require years of investment, w…

>"Like everything from this administration, it's about the appearance of action."

Actually people are being murdered for real, lots of other real stuff as well

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#188

Post by kspacewalk2 » Thu, Feb 12, 2026, 6:09 PM UTC

jleyank wrote: post #81

kspacewalk2 wrote: post #66

Earlier 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 a corporation doesn't have trading partners, it has a mission to sell to customers. If customers are disproportionately in the US, which happens quite often, then you can entirely rationally decide that pissing them off with a big price hike is worse for the bottom line than pissing everyone off a little.

https://www.reuters.com/business/retail-consumer/global-reta...

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#189

Post by wrs » Thu, Feb 12, 2026, 6:09 PM UTC

hackyhacky wrote: post #135

phkahler wrote: post #119

Earlier quoted context omitted.

Right. They're on goods from China. The intent is to make that stuff more expensive so we can compete.

> The intent is to make that stuff more expensive so we can compete. This would seem to be an admission that the domestic product is inferior, otherwise why would it be necessary to burden the import with tariffs? In any case, if that's the intent, it's not working out for fairly predictable reasons. Lots of imported goods have no domestic equivalent. The factories required to make them require years of investment, w…

There’s plenty of action. Actions have amply demonstrated that the purpose of the tariffs is to extort other concessions from countries, or simply to punish them for perceived insults against our leader. This is pretty obvious based on how they are set at arbitrary levels, deadlines are set and deferred, amounts are set and changed unrelated to any economic explanation (“I didn’t like the way she talked to us”), etc.

They’re just an easy cudgel to use against an entire country at whim, at least until the rest of the government delegitimizes the “emergency” excuse being used to impose them.

Essentially the President regards everything as either a zero-sum no-holds-barred negotiation with him as the primary beneficiary, or as some kind of real-estate deal (see his Davos speech about how we’re “leasing” Greenland). Tariffs are just a great general-purpose stick he found a way to wield.

Re: US businesses and consumers pay 90% of tariff costs, New York Fed says

#190

Post by hackyhacky » Thu, Feb 12, 2026, 6:13 PM UTC

FpUser wrote: post #187

hackyhacky wrote: post #135

Earlier quoted context omitted.

> The intent is to make that stuff more expensive so we can compete. This would seem to be an admission that the domestic product is inferior, otherwise why would it be necessary to burden the import with tariffs? In any case, if that's the intent, it's not working out for fairly predictable reasons. Lots of imported goods have no domestic equivalent. The factories required to make them require years of investment, w…

>"Like everything from this administration, it's about the appearance of action." Actually people are being murdered for real, lots of other real stuff as well

> Actually people are being murdered for real, lots of other real stuff as well

They are. My point is not that the administration isn't having a real impact, but rather that they the administration doesn't care about the real impact, positive or negative. They care only that they get the headline.