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American importers and consumers bear the cost of 2025 tariffs: analysis

kielinstitut.de

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Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#531

Post by boringg »

lovlar wrote: post #323
bartread wrote: post #56

I'm glad they've done the work here and put a figure on it - the impact absolutely needed to be quantified - but I also have to say... to the surprise of absolutely no-one with even the most basic grasp of how economies function. People, lots of people, lots of people who have a really deep understanding of national and global economics (unlike me), have been warning about this since talk of tariffs became common cur…

One of the main reasons we end up with populist leaders who make decisions not in the interest of their population, but in service of their own pursuit of power, is social media and the attention economy. If people stopped spending hours each day scrolling through Instagram, TikTok, and Facebook feeds, media incentives would change. Journalism would become more thorough and responsible, rather than optimized for outr…

Last I checked populism is generally a route to power not actually enacting policy for the people.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#532

Post by NetMageSCW »

0xbadcafebee wrote: post #202
bartread wrote: post #56

I'm glad they've done the work here and put a figure on it - the impact absolutely needed to be quantified - but I also have to say... to the surprise of absolutely no-one with even the most basic grasp of how economies function. People, lots of people, lots of people who have a really deep understanding of national and global economics (unlike me), have been warning about this since talk of tariffs became common cur…

> What was going through your heads? The same thing as usual: people don't like how things are going, they demand change, but they're not specific, so the result is extreme, and then people demand change again, and on it goes. There's no great insight or rationale going on. People are just dumb animals in hats.

That reminds me, I should wear my hat more.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#533

Post by bee_rider »

j16sdiz wrote: post #259
dghlsakjg wrote: post #52

Earlier quoted context omitted.

Kind of. Econ 101 normally covers tax incidence (which side bears the burden of a tax). It has a lot to do with elasticity of both demand and supply. If foreign exporters can easily shift to other markets or adjust production (elastic supply), they'll pass most of the tariff cost to consumers through higher prices. If American consumers have few substitute products (inelastic demand), they'll end up absorbing most of…

For that to work, the tariff should be targeted and selective. A tariff on everything can hardly be justified

The granularity of the targeting seems like a separate issue (I could be wrong though). The tariff should shift people to buying from non-tariffed suppliers. Targeted means it could shift people to importing from other counties. Broad should shift people to buy domestic, right?

I mean, just to be clear, I think the tariffs are a bad plan. But targeted vs broad seems more like an implementation detail… the big picture plan is the bad part!

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#534

Post by Herring »

estearum wrote: post #256
kryogen1c wrote: post #242

Earlier quoted context omitted.

Im inclined to agree with most of what you say, although I dont follow economics or current events closely enough to have a strong opinion. My point is that your thoughtful response about reliable continuity, both inter- and intra- president, is not present in a lot of the comments.

Because it's a layer too rudimentary. You also don't see people commentating that "taxation is when the government takes a cut of a transaction or of property." The only people who need to back up to "industrial policy requires consistency and transparency" are those who are either incapable of or willfully deciding not to understand what's going on around them.

It's becoming a real problem how the human brain is wired to prioritize "group-loyalty" over "factual accuracy."

I'm sure it worked great when we were in small groups living in caves, but it is making the modern world a lot more dangerous.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#535

Post by LexiMax »

brightball wrote: post #325
BanAntiVaxxers wrote: post #121

Earlier quoted context omitted.

[flagged]

I don’t usually bother reacting strongly to anything on HN but that is a complete fabrication.

Is this a bot? Is this someone telling an unpopular truth on an alt account? Is this someone telling a fabrication on an alt account?

The best part about Hacker News is that you can't really know. It's a problem inherent to the kind of social space HN is trying to be; open registration, and lax control over abuse of user moderation tools.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#536

Post by whodidntante »

buckle8017 wrote: post #279

Then explain why anybody outside the US even cares?

The article was written by "Europe’s preeminent research institute for global economic affairs" which is based in Germany. Europe, and Germany, saw a significant drop in its trade to the US since the tariffs started. Seems like they care.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#537

Post by CGMthrowaway »

skippyboxedhero wrote: post #411
bartread wrote: post #56

I'm glad they've done the work here and put a figure on it - the impact absolutely needed to be quantified - but I also have to say... to the surprise of absolutely no-one with even the most basic grasp of how economies function. People, lots of people, lots of people who have a really deep understanding of national and global economics (unlike me), have been warning about this since talk of tariffs became common cur…

There are multiple research papers that indicate that this result (in terms of what you think the paper says) is not obvious. Indeed, to think this is the case, you need an extremely superficial understanding of economics based around "rules" that only exist in theory. And, if you read the paper, you will find that evidence. How these work depends on initial conditions that vary and exporters will not react in a cons…

Great points. This paper is a static, partial-equilibrium analysis that knows the price of everything and the value of nothing, which I suspect the NYT will happily run as gospel.

The most glaring, disqualifying omission is the disregard for FX adjustments. We have not seen the CNY/USD crash yet , but that is because of MASSIVE currency intervention from China to the tune of $200B+ per month: https://x.com/Brad_Setser/status/2012021712012145030

The other wonky thing is they call $200 billion in tariff revenue "a tax" and they also call it a "deadweight loss." Are the authors not the Keynesians I thought they were? At any rate, tariff revenue is not a new tax, but merely a shift in the tax base - since it is $200B that the government does not need to collect elsewhere.

Lastly the collapse of trade volumes from Brazil and India is not a bug it's a feature. Yes supply chains are sticky. The POINT of tariffs is to force supply chain decoupling and reshoring. To "unstuck" the supply chain. Does disruption come with temporary supply shocks? Of course.

The European export growth model is not working for Europe. They are not far behind the US in doing what we are attempting. Canada cozying up to China is not what they wanted for themselves, lol. Etc.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#538

Post by NetMageSCW »

RandomTisk wrote: post #320
bartread wrote: post #56

I'm glad they've done the work here and put a figure on it - the impact absolutely needed to be quantified - but I also have to say... to the surprise of absolutely no-one with even the most basic grasp of how economies function. People, lots of people, lots of people who have a really deep understanding of national and global economics (unlike me), have been warning about this since talk of tariffs became common cur…

Who ultimately pays the tariffs is missing the forest for the trees, their primary function is to tax, and taxation virtually always reduces spending. Don't want to pay tariffs? Buy domestic. Tariffs are the single reason (or one of very few) that the US isn't flooded with BYD electric cars from China. China's dirt cheap labor could decimate the US auto industry, but for tariffs and trade regulation, but I repeat mys…

That’s an incredibly naive position that assumes there are domestic options available for most things, and that they would be cheaper than tariffed items.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#539

Post by baxtr »

kryogen1c wrote: post #168

Almost all the comments acting like this is some truth bombshell, like people in trumpistan all thought raising tariffs magically made the us economy better. This is a straw man, no? Tariffs are a mid-long term strategy to encourage onshoring business, for reasons including military, national security, and political influence on foreign powers. This is a complicated topic involving the global economy and evolving int…

Maybe I’m wrong but I thought the administration was saying that tariffs will be paid by importing countries.

Whatever strategy you pursue I think it’s good to know who is actually paying for it.

Re: American importers and consumers bear the cost of 2025 tariffs: analysis

#540

Post by uselesswords »

notahacker wrote: post #404
rich_sasha wrote: post #281

Earlier quoted context omitted.

It's still a bit of a mystery to me TBH. Not that Americans are paying it, but where's the cash? The headline suggests it was all passed into consumers. So why is inflation still so low? If you add 10-30% to prices (granted, of imports, not of houses, domestic food etc), you'd expect more. If companies were eating it (which apparently they aren't) then their profitability should be down. But that doesn't seem to be t…

Imports seeing large tariff changes aren't a particularly large part of the CPI basket, and domestic substitutes exist. Expected responses from US manufacturers putting their own prices up are lagged, and tempered by some of the consumer response being simply buying less stuff. The Fed predicted it added 0.5 points to what inflation could have fallen to with the expected effects only partially visible. https://www.st…

How can it be possible that consumers are paying 96% of tariffs that range from 25-100%. Yet inflation has only risen by 0.5 points? Consumption would have to be less than a fifth of what it was a year ago. And why haven’t there been such equally drastic price changes on shelves if whats functionally the entire cost is being passed to consumer?
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