3 ms·

Tariffs are an additional sales tax. That's it. That's all you need to do to explain this to people. It's amazing to me how many have fallen for this ridiculou

by jmyeet 2y ago

Tariffs are an additional sales tax. That's it. That's all you need to do to explain this to people. It's amazing to me how many have fallen for this ridiculous lie that the other country somehow pays the tariff AND there will be no increase in cost to the consumer. I used to think these lies were cynical, like how Mexico was going to pay for the border wall. But I'm not convinced now. I think there's a not-insgificant chance the president doesn't know this is how tariffs work. And that's terrifying. I would respect a cycnical lie way more. You buy $1000 in t-shirts from China. The government places a 30% import duty on them. The importer pays $300 to the government. Those t-shirts now cost you $1300. Whoever sells them retail will be charging up to 30% extra to recoup that. It blows my mind that this even requires explanation.

deleted 2y ago
[deleted]
relaxing 2y ago
The best explanation I’ve seen is that tariffs are a stick that can be used to enforce compliance with other policies, and selectively lifted when companies bend the knee.
- rsynnott 2y ago
  That isn’t really how they’re supposed to work, and in a normally functioning country the state could expect to be sued by the injured parties (that is, the competitors of the specially favoured companies) if they tried it. Of course, in 2025 the US is hardly a normally functioning country, but it’s also not clear that its court system is _totally_ compromised, and any company who went along with this would certainly be taking a risk.
  - relaxing 2y ago
    Sue and risk further sanctions? We’re already seeing how little backbone there is for standing up to such actions.
kbelder 2y ago
It's never purely on the buyer or the seller. The price goes up 30%; fewer customers buy them and the ones that do pay more. The business makes less money; they cut some prices to recoup some sales.... maybe to $900. The lot of shirts now sell for $1200. Basically, market distortions like that are never paid exclusively by one party or the other; instead, it moves the equilibrium point. Both the buyer and the seller are worse off. Granted, that does take some time.

by jmyeet 2y ago

deleted 2y ago

[deleted]

relaxing 2y ago

The best explanation I’ve seen is that tariffs are a stick that can be used to enforce compliance with other policies, and selectively lifted when companies bend the knee.

rsynnott 2y ago
That isn’t really how they’re supposed to work, and in a normally functioning country the state could expect to be sued by the injured parties (that is, the competitors of the specially favoured companies) if they tried it. Of course, in 2025 the US is hardly a normally functioning country, but it’s also not clear that its court system is _totally_ compromised, and any company who went along with this would certainly be taking a risk.
- relaxing 2y ago
  Sue and risk further sanctions? We’re already seeing how little backbone there is for standing up to such actions.

kbelder 2y ago

It's never purely on the buyer or the seller. The price goes up 30%; fewer customers buy them and the ones that do pay more. The business makes less money; they cut some prices to recoup some sales.... maybe to $900. The lot of shirts now sell for $1200. Basically, market distortions like that are never paid exclusively by one party or the other; instead, it moves the equilibrium point. Both the buyer and the seller are worse off. Granted, that does take some time.