3 ms·
Tariffs can be paid by the seller/exporter. If a very significant part of a company's business is done in the US, and the tariff is sufficiently high, they will
by kspacewalk2 8mo ago
Tariffs can be paid by the seller/exporter. If a very significant part of a company's business is done in the US, and the tariff is sufficiently high, they will lose market share if the customer eats the entire cost of the tariff (which is the whole point of the exercise in the first place). So they may decide to socialize this cost a little bit, by increasing prices in all countries, by a lot less than the tariff, and making customers in other markets in effect subsidize the Americans. Everyone except Americans .pays a bit more, prices don't rise as much for Americans.
It's interesting to see how little of that is going on, empirically, by looking at these kinds of quantitative studies.
- jleyank 8mo agoWithout coercion today, why would anybody try to give the US a break at the cost of its other trading partners...?
- charcircuit 8mo agoBecause the US has the strongest economy in the world.
- leptons 8mo agoOr, it's the biggest house of cards.
- kspacewalk2 8mo agoBecause a corporation doesn't have trading partners, it has a mission to sell to customers. If customers are disproportionately in the US, which happens quite often, then you can entirely rationally decide that pissing them off with a big price hike is worse for the bottom line than pissing everyone off a little. https://www.reuters.com/business/retail-consumer/global-retailers-tariff-strategy-risks-spreading-pain-beyond-us-consumer-2025-05-20/ https://www.reuters.com/business/retail-consumer/global-reta...
- nullocator 8mo agoWhy would they be pissed off at the business for not absorbing the tariff? The business didn't arbitrarily enact them, Donald Trump and ipso facto his supports did.