US companies, consumers are paying for tariffs, not foreign firms • Hacker News Board

Re: US companies, consumers are paying for tariffs, not foreign firms

#121

Post by throwawaymaths » Wed, Jul 23, 2025, 2:36 AM UTC

bdcravens wrote: post #77

throwawaymaths wrote: post #61

there are so many second order effects here who knows. for example (and im not saying this will always be the case) if a tariff pushes a foreign company's good out of the us marketplace and the customer is "forced" to pay 2x for something domestically manufactured that lasts 4x as long, did the american "pay for it"? how would this look in bulk economic data (spoiler it would look bad because consumption went down)

In this case, the economic data would indicate rising inflation. The quality of the goods purchased is mostly irrelevant, but it's quite an assumption to assume the good will last longer.

> and im not saying this will always be the case

Re: US companies, consumers are paying for tariffs, not foreign firms

#122

Post by usefulcat » Wed, Jul 23, 2025, 2:40 AM UTC

water9 wrote: post #40

linotype wrote: post #37

Earlier quoted context omitted.

That’s the point. It’s not crazy. Tariffs are regressive taxes. Rich people buy more stuff, sure, but as a percentage of their income they net out as beneficiaries of shifting taxes from income to spending. It’s totally rational if you want to increase taxes on the bottom 80% to subsidize the top 20% (and especially top 5%).

[flagged]

> A tariff as you might recall is punitive for the ultra rich people

If by 'ultra rich people' you mean the owners of capital, then no, not really. Those businesses hurt by tariffs will almost always raise prices until they are at least breaking even, otherwise they couldn't survive.

Yes, such business might lose some sales, so their 'ultra rich' owners might end up slightly less 'ultra rich', but don't forget that there will also be other businesses that will very much benefit from the tariffs (because market prices will go up when any part of the market is hit with tariffs), so their owners will become more wealthy.

So to sum up, with tariffs:

* some businesses may be hurt

* some businesses may be helped

* government gets more tax revenue

* consumers get higher prices

The 'ultra rich' don't care if food, clothing, cars, etc cost 5 or 10 or 20 percent more because they already have way more disposable income than they need. And even if they do take a hit, going from an annual income of $1M to $500k is not nearly as bad as going from $50k to $40k.

Apart from hurting some businesses and helping others, tariffs are no different than a regressive tax increase.

Re: US companies, consumers are paying for tariffs, not foreign firms

#123

Post by thewileyone » Wed, Jul 23, 2025, 2:43 AM UTC

linotype wrote: post #37

xnx wrote: post #28

Crazy that one of the major policy initiatives of the all Republican/Maga government is to impose a huge consumer tax increase. Maybe calling these "import taxes" instead of "tarrifs" would help emphasize that to the average voter?

That’s the point. It’s not crazy. Tariffs are regressive taxes. Rich people buy more stuff, sure, but as a percentage of their income they net out as beneficiaries of shifting taxes from income to spending. It’s totally rational if you want to increase taxes on the bottom 80% to subsidize the top 20% (and especially top 5%).

> It’s totally rational if you want to increase taxes on the bottom 80% to subsidize the top 20% (and especially top 5%).

Nothing rational about plutocracies or oligarchies.

Re: US companies, consumers are paying for tariffs, not foreign firms

#124

Post by minraws » Wed, Jul 23, 2025, 2:50 AM UTC

linotype wrote: post #37

xnx wrote: post #28

Crazy that one of the major policy initiatives of the all Republican/Maga government is to impose a huge consumer tax increase. Maybe calling these "import taxes" instead of "tarrifs" would help emphasize that to the average voter?

That’s the point. It’s not crazy. Tariffs are regressive taxes. Rich people buy more stuff, sure, but as a percentage of their income they net out as beneficiaries of shifting taxes from income to spending. It’s totally rational if you want to increase taxes on the bottom 80% to subsidize the top 20% (and especially top 5%).

Personally I can understand tariffs on high end goods but taxes on low-end goods or raw materials is insane. Any country doing it has hobbled it's industry for decades and some might prove that they don't work even if you keep these tariffs on for centuries...

But politicians will politic what can we do huh... Really feels like no side, opinion or thought of every day folks matters anywhere.

Re: US companies, consumers are paying for tariffs, not foreign firms

#125

Post by boojums » Wed, Jul 23, 2025, 2:53 AM UTC

486sx33 wrote: post #68

As much as Bloomberg used to be a great business resource, it seems a bit bias now and the paywall is super annoying. However I’d still consider it a legitimate source. I can say from my supply chain experience, which I can’t really disclose, other than to say it’s substantial in my world, I directly negotiate purchases from Asia (various regions) of between $25 million to $75 million per year. If those statements ar…

Not sure why this comment was dead when it contains an interesting perspective.

Re: US companies, consumers are paying for tariffs, not foreign firms

#126

Post by MandieD » Wed, Jul 23, 2025, 2:56 AM UTC

klooney wrote: post #117

unclad5968 wrote: post #89

Earlier quoted context omitted.

Do you have any resources for other solutions for improving American manufacturing capability? I'm ignorant to most of this but I'm interested in what solutions people have proposed.

You generally need to subsidize too, and if you look at the real industrial powerhouses like China or Germany you'll see deep government involvement in things like "ensuring super cheap energy for industry" and "removing red tape" that we're not really tackling.

Germany… government… “removing red tape”…

Ich lach mich kaputt

(I love it here, but “removing red tape”?!)

Re: US companies, consumers are paying for tariffs, not foreign firms

#127

Post by [deleted] » Wed, Jul 23, 2025, 2:57 AM UTC

fsckboy wrote: post #108

yongjik wrote: post #104

Earlier quoted context omitted.

If you believe that any agreements with Trump provide certainty, I have a bridge to sell. The rest of the world now knows that any promise made by the US government is not worth the paper it's signed on, and is planning accordingly.

the rest of the world is complaining bitterly. they would not be doing that if their solution was as simple and painless as you like to think

[deleted]

Re: US companies, consumers are paying for tariffs, not foreign firms

#128

Post by Dig1t » Wed, Jul 23, 2025, 3:04 AM UTC

It is a tax on businesses who import things right? Basically exactly the same as corporate income tax, which Trump cut in his first term.

Now the tax is being raised on companies who import goods made overseas, but companies who make their product in the US don’t have to pay the tax.

If you are usually the type of person that supports taxing the rich and taxing large businesses, shouldn’t tariffs be something that you generally are in favor of?

Re: US companies, consumers are paying for tariffs, not foreign firms

#129

Post by K0balt » Wed, Jul 23, 2025, 3:31 AM UTC

minraws wrote: post #124

linotype wrote: post #37

Earlier quoted context omitted.

That’s the point. It’s not crazy. Tariffs are regressive taxes. Rich people buy more stuff, sure, but as a percentage of their income they net out as beneficiaries of shifting taxes from income to spending. It’s totally rational if you want to increase taxes on the bottom 80% to subsidize the top 20% (and especially top 5%).

Personally I can understand tariffs on high end goods but taxes on low-end goods or raw materials is insane. Any country doing it has hobbled it's industry for decades and some might prove that they don't work even if you keep these tariffs on for centuries... But politicians will politic what can we do huh... Really feels like no side, opinion or thought of every day folks matters anywhere.

I believe it was MIT that ran a study a couple of decades ago that proved that people were unable to influence policy through voting because the effectiveness of lobbying put the vote inputs below the noise floor?

Re: US companies, consumers are paying for tariffs, not foreign firms

#130

Post by fragmede » Wed, Jul 23, 2025, 3:39 AM UTC

snowwrestler wrote: post #118

CGMthrowaway wrote: post #87

Earlier quoted context omitted.

[flagged]

> The tariffs are paid by the foreign producers, not consumers. The tariffs are being paid by domestic companies, not foreign producers. There is literally no way for a foreign producer to pay a U.S. tariff as the tariff is charged to the importer before the good is released by Customs. The impacts of the tariffs are domestic. If consumer prices are not increased, then profits, investment, or expenses (including sala…

> The tariffs are being paid by domestic companies, not foreign producers.

I've had suppliers from China lower their prices in the face of the tarrifs so that the total amount I pay after the tarrifs is only slightly higher. Which is going to be even more harmful if/when the tarrifs get removed as they're now undercutting American manufacturers even more than they were before.