> In reality because demand is neither 100% elastic nor 100% inelastic, what tends to happen is that the cost of the tariff is split in some ratio between the b

> In reality because demand is neither 100% elastic nor 100% inelastic, what tends to happen is that the cost of the tariff is split in some ratio between the buyer and seller. That is the argument of the Administration: >> Kevin Hassett's theory of tariffs: "China has got to sell a lot of stuff to us to maintain political stability. And so if we put a tariff on their stuff, then they cut the price so that our consumer is basically still able to demand as much stuff as they need to sell to be politically stable." > If he were right, the import price index (which measures pre-tariff prices) would have fallen by enough to offset the sharp tariff hike. It didn't. > [graph of said index] * https://twitter.com/JustinWolfers/status/1981928861547041162#m https://twitter.com/JustinWolfers/status/1981928861547041162...