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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

#231

Post by ryandrake »

TheJoeMan wrote: post #139
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.

If rent or business taxes go up, the business may either eat the cost or eventually raise the main price, they don’t tack a “rent offset fee” on the final bill. But with tariffs, up to a point the business dgaf because they just pass it through as a separate “junk fee” line item.

> If rent or business taxes go up, the business may either eat the cost or eventually raise the main price, they don’t tack a “rent offset fee” on the final bill. But with tariffs, up to a point the business dgaf because they just pass it through as a separate “junk fee” line item.

It's always kind of enlightening to see exactly what things businesses choose to explicitly pass on to the customer, and what things they just eat as a cost of doing business. It's often very political and performative.

Some restaurants in California have taken to adding a "Living Wage Fee" to restaurant bills as a way to protest having to pay their employees proper wages. They could have just eaten the cost and raised their food prices slightly, but instead they chose the passive-aggressive route, complaining about it via the bill, which the customer sees. Presumably to try to convince the customer that "Living Wage" politics are bad and that they visibly raise the price the customer pays.

But, when the county raises their property taxes, the same restaurants just eat the cost. They don't add an "Unfair Property Taxes" line item to their diners' bills.

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

#232

Post by bobthepanda »

SoftTalker wrote: post #110
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.

Pretty much every tax is ultimately paid by the consumer, because all the suppliers have to make a profit or they won't stay in business. The point of an import tariff isn't to make anything cheaper, it's to level the market in the presence of a foreign supplier who has much lower costs (e.g. sweatshop labor, state-supported industry, etc.) that are not available to domestic suppliers.

The problem is that the tariffs are so broad in ways that don’t help US industry; and there are few supply chains wholly within the US so you end up hurting US manufacturing as well.

It doesn’t really make sense, for example, that we slapped tariffs on Madagascar, when the primary reason we run a trade deficit with them is that they grow vanilla which cannot be grown in the US.

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

#234

Post by throw0101a »

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…

> 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?

There are valid reason and particular instances for when tariffs are good/useful:

* https://www.noahpinion.blog/p/when-are-tariffs-good

It's just that the those instances are not applicable for what Trump is currently doing.

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

#235

Post by vkou »

martin8412 wrote: post #221
munk-a wrote: post #207

Earlier quoted context omitted.

There's a case in process that'll likely resolve in the next two months. Quite a few companies have filed suite banking on getting their fees reimbursed. In the current political climate nothing is certain - but this will likely come to a resolution in the near term.

Okay, so if they lose that case, Trump will just pass a new executive order that once again takes months to resolve.

The solution, of course, is to never vote R again, for any office.

You have to punish anyone supporting this insanity.

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

#236

Post by iaaan »

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.

My spouse and I regularly import vintage toys and collectables from Asian countries. We've paid hundreds of dollars in tariffs on items that this point about manufacturing doesn't apply to at all

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

#237

Post by fmobus »

SoftTalker wrote: post #110
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.

Pretty much every tax is ultimately paid by the consumer, because all the suppliers have to make a profit or they won't stay in business. The point of an import tariff isn't to make anything cheaper, it's to level the market in the presence of a foreign supplier who has much lower costs (e.g. sweatshop labor, state-supported industry, etc.) that are not available to domestic suppliers.

If the supplier is forced to leave the business, that is a form of paying. They are losing a source of income and will have to pick a different activity that they are not efficient at. In the case of tariffs on international trade, the supplier loses a chunk of market - in the case of the US, one that was wealthy - and that always means a loss for the business.

The burden of ALL taxes falls on both sides of the transaction. The proportion of the burden varies with market conditions, the most important being elasticity.

That's why studies like the OP are necessary, to determine how much the proportions are. Honestly I am not surprised with the result, tariffs are objectively bad. Curbing trade is bad by default.

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

#239

Post by Alupis »

mindslight wrote: post #58
Alupis wrote: post #44

Earlier quoted context omitted.

FedEx has always charged a brokerage fee, that is and has always been ridiculous. The brokerage fee in some cases exceeds the actual taxes and duties. That is to say there is no 200% tariff on cups. [1] - https://www.fedex.com/en-us/ancillary-clearance-service.html

Sure, Fedex/UPS's brokerage fees are legendary for small shipments. The problem is better stated as the removal of the de minimis threshold. So in this case an American is still paying for the misguided close-the-barn-door-after-the-horse-ran-out policy, just with most going directly to the corporate interests that helped install this corrupt administration. (but the joke is on them - Aliexpress Choice doesn't charge…

Brokerage fees are a business decision. USPS only charges about $5 for dutiable international parcels - and with 15 years in logistics I can confidently say they often don't even charge that fee at all.

Tariffs are designed to change consumer spending habits, and force international businesses to create on-shore operations. To that end, they are effective - but it takes longer than 365 days for those patterns to shift.

> misguided close-the-barn-door-after-the-horse-ran-out policy

> helped install this corrupt administration

I dare say your opinion, here, has nothing to do with the efficacy of tariffs. Tariffs have long been studied, and both major political parties have called for tariffs like we're seeing right now at various points in recent history. The only difference is nobody desired to rock the status quo, so the lopsided economic policies of the past persisted.

Nearly every other nation tariffs American goods in some way. American businesses attempting to sell products into Brazil, the UK, Germany and more are - and have been - at a significant disadvantage for decades due to high import taxes and duties. For the first time those international businesses are feeling the same consequences as their own nation's weaponized economic policies. Perhaps that will put pressure on their governments, achieving the ultimate goal of the USA's policy - reduce and/or remove tariffs across the board. ie. Fair Trade vs. Free Trade.

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

#240

Post by steveBK123 »

nucleardog wrote: post #200
steveBK123 wrote: post #137

Earlier quoted context omitted.

The whole thing could get reversed on a daily basis as this admin commits massive graft, carving out loopholes & rollbacks for their buddies companies/industries/etc.. Not to mention the incoherence that one day its a tool to bring jobs back, the next day its just a negotiation tactic so they get reduced/dropped on a country by country basis over and over.

> Not to mention the incoherence that one day its a tool to bring jobs back, the next day its just a negotiation tactic so they get reduced/dropped on a country by country basis over and over. I thought it was retaliation for Canada not doing enough to stop their 20-odd kilogram contribution to the 4 tons of fentanyl smuggled in every year? [0] (Which is to say I agree with you. Just trying to support your point that…

Yes, it's all kayfabe.

The "smart MAGA" guys always crack me up because by the time they craft an intellectual justification for his previous moves, he has pivoted/reversed and pantsed them once again.

Frequently we get the "he's been poor advised" fallback as well.. Good Czar, Bad Boyars.

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