There is only a debate on this topic because propaganda works. It's a regressive tax, which disproportionately hits consumers.
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
#12Those are exactly the groups that are meant to pay for the tariffs.
A factor in this that is not mentioned is that companies selling goods to the US may have made an effort to lower prices, altering production to lessen tariffs or in other way tried to offset the extra amount US consumers have to pay.
An estimate of that would be quite interesting.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#13Everyone 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_Unit...
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"Fighting" China with tariffs is like fighting your neighbor who's dog keeps peeing in your yard by lighting your own couch on fire.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#14The public needs to understand that tariffs aren't meant to punish other countries (which is what is being sold) - they are meant to change domestic behavior.
Sure, they work via changing domestic behavior. But the purpose of that change is what's important. They can be used to gently (as compared to sanctions) shift demand away from a particular country, or alternatively to apply pressure to a sector to bring it on shore.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#15Those are exactly the groups that are meant to pay for the tariffs. A factor in this that is not mentioned is that companies selling goods to the US may have made an effort to lower prices, altering production to lessen tariffs or in other way tried to offset the extra amount US consumers have to pay. An estimate of that would be quite interesting.
> may have made an effort to lower prices,
Isn't that the 10% in the article? That's the mechanism by which "China pays the tariffs".
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#16Everyone 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…
Subsidies are also expensive for the tax payer. Warping the market costs money. (No comment on whether it's being warped in the "right" way right now.)
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#17Those are exactly the groups that are meant to pay for the tariffs. A factor in this that is not mentioned is that companies selling goods to the US may have made an effort to lower prices, altering production to lessen tariffs or in other way tried to offset the extra amount US consumers have to pay. An estimate of that would be quite interesting.
> may have made an effort to lower prices, Isn't that the 10% in the article? That's the mechanism by which "China pays the tariffs".
X "pays" the tariff by losing US business.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#18The US has needed to raise taxes for decades given the level of spending the federal government does and constant "relief" packages that everyone now expects the minute there's a downturn.
The runaway deficit is a massive problem now given the age of 0 interest rates is over.
So what's astonishing is, whether you like him or not, the Orange man actually got the American public to accept what is defacto the largest tax increase in decades.
Unfortunately, they immediately spent that money too on the promise of persistently high growth in the world's richest economy. I find that unlikely over time, but time will tell.
Seems every large Western country is currently hell bent on finding out what level of deficit spending results in societal collapse.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#19Everyone 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 could work if you put the couch in your neighbor's yard first.
Re: US businesses and consumers pay 90% of tariff costs, New York Fed says
#20The public needs to understand that tariffs aren't meant to punish other countries (which is what is being sold) - they are meant to change domestic behavior.
Sure, they work via changing domestic behavior. But the purpose of that change is what's important. They can be used to gently (as compared to sanctions) shift demand away from a particular country, or alternatively to apply pressure to a sector to bring it on shore.
> They can be used to gently (as compared to sanctions) shift demand away from a particular country
That works when those countries are selectively tariffed while others are let off. Blindly applying tariffs to whatever satisfies the mood is not the way.
> or alternatively to apply pressure to a sector to bring it on shore.
For this to work, the cost of onshore production must be lower than the tariffed price. The inputs must be made cheaper and not tariffed. Again the US administration is not doing any of these strategically.