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Comment on Trump’s tariffs might actually be working as he intended

MapleEngineer@lemmy.world ⁨2⁩ ⁨days⁩ ago

Profits are down because prices are up because of the tax and American consumers who pay the tax can’t afford to buy the products. In the absence of less expensive foreign products American companies will raise their prices.

This propaganda rag has no idea how tariffs work. Foreign companies aren’t paying the tariffs. Foreign governments aren’t paying the tariffs. American companies and consumers are paying the tariffs.

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Lovstuhagen@hilariouschaos.com ⁨2⁩ ⁨days⁩ ago

This propaganda rag has no idea how tariffs work. Foreign companies aren’t paying the tariffs. Foreign governments aren’t paying the tariffs. American companies and consumers are paying the tariffs.

Well, they do cite infrmation about this:

The Harvard Business School tariff tracker, which has been monitoring price changes across affected sectors, estimates a “pass-through” rate of approximately 20%, meaning that only one-fifth of the tariff costs are actually showing up in consumer prices. Even that figure may be generous as it includes some one-off adjustments that are unlikely to persist.

According to the Harvard’s Pricing Lab, prices of imported goods rose by 5.4% from March to September as tariffs were imposed, compared with 3% for domestic goods, so some of the tariffs were passed on but far from the full cost. In other words, the market has adjusted, just not in the way the textbooks predicted.

I think it adjusted in a way that is relatively predictable. Sure, consumers will shoulder some of the burden, and perhaps even a greater share in the short-term, but businesses have to adjust their prices to be competitive, and in the long-term they have to consider that the tariffs on their goods will incentivize local, cheaper versions of their products to show up in the market since they will now be profitable.

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