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Just a real quick question for Americans - no angst or fighting.

When a product from overseas - let’s use China as an example - has a tariff on it, you know it’s the American public who pays the higher expense to cover the tariffs, not the exporter right?

I’m just asking because a Texan friend of mine thought tariffs on Chinese products was paid by the Chinese government. But it’s not. It’s the American consume who pays the higher cost.

I know it’s obvious but I just thought if check everyone understood the tariff costs the consumer, not the exporter.

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Northwest · M

Yes, you're right. Any third grader in the rest of world, or any US State that did not vote for Trump gets it.

Our President, 52 of our Senators, half of our House Members, the entire cabinet, and DOGE don't seem to get it. Your friend is from Texas, so good luck getting him to understand the basic stuff.

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mehmeh · 26-30, F

@Northwest it was an attempt to lighten the mood. happy valentines day.😊

ffony · M

@Toofargone Ignore her. She's already too far gone; way, way too far.

ffony · M

@mehmeh Haha; Worth a try I suppose.

WintaTheAngle · 41-45, M

Thanks for the level headed responses. I just wanted to check what people understood.

I have a friend I met when my Squadron went on detachment at Nellis AFB, he now lives in Corpus Christi - he thought tariffs made countries like China and Canada pay money to export to the US, and frankly when I told him what tariffs do he got rather upset that he was potentially footing the bill and not Beijing.

MethDozer · M

@WintaTheAngle what gets me jmis even if tariffs were imposed on the exporter. Why would anyone believe they wouldn't add the extra expense to the markup before exporting?

WintaTheAngle · 41-45, M

@MethDozer Honestly? I’m not sure.

My friend is very academically competent. He was a senior tech on an Air National Guard unit when I met him nearly 15 years ago.

Some people just don’t understand how money behaves I guess.

Arnoldjrmmer · 56-60, M

Yes consumers face the brunt of tariffs.
The purpose is not to make other countries pay more but to discourage purchasing products where trade is unfair.

China as an example has many factors at work that are ignored in the discussion. Namely that the way China does business is grossly unfair trade practices.
They peg their money to the US dollar to keep the Yuan artificially low.
Their labor force are paid wages far below what any western country would accept, not to mention work conditions.
Theft of intellectual property means they can cut out the cost of research to produce an item. An example is if you wanted to produce a product in china, you are required by Comunist party rules to make your data available. There is a reason why new year model Chinese autos tend to be reskinned Ford or GM designs.

The US spent way too long letting every business run to china in the name of cheap production.
Honestly i would not bother with Tariffs, i would just remove most favored trade status from China and block almost all imports from there over a phased rollout.

If it was workable, I would declare certain industries as "strategic" and penalize those who dont have a base level of US production, pharmaceutical, metal working, shipbuilding, mining, heavy manufacturing and tech. It would take a bit of doing but has precident.

FreddieUK · 70-79, M

@Arnoldjrmmer There's a lot of truth here in the analysis of what's going on. However, since Trumps richest supporters have a lot of their product made in China for all the reasons you state, I can't see there's going to be any meaningful sanction, only posturing.

Arnoldjrmmer · 56-60, M

@FreddieUK i agree, thats why the push is on the minor players like Mexico and Canada. The west enabled the monster that is the CCP and now has to wrangle the bit players out of the orbit of China.
US industries went for short term profit and have no loyalties to anyone other than themselves.
I am also absolutly opposed to any taxpayer money going to "helping" industries if they go broke because of investing in China.

dakotaviper · 56-60, M

@Arnoldjrmmer I agree with what you have stated here. I live in the US South, namely Eastern NC. There used to be Hundreds of Textile Mills here and they're all GONE. Those Mills are now in Southeast Asia. Huge swaths of buildings lying dormant and empty. Many are way too expensive to tear down.

dancingtongue · 80-89, M

Understand that. Also understand that the targeted country's retaliatory tariff gets added on to our exports, making it more expensive for foreigners to buy our products, and negatively impacting our balance of trade. And since a large portion of those exports are agriculturally-based -- and countries are saying specifically targeted to products from MAGA red states -- biting us in the behind from that direction as well. Apparently they never taught this is at the Wharton School of Economics. At least to the legacy students/

ElwoodBlues · M

Most of us understand this; apparently the cult does not.

People with a bit of memory recall that tRump imposed these same steel & aluminum tariffs in March 2018, but soon exempted Canada & Mexico.

China imposed retaliatory tariffs on agricultural goods, and so tRump used taxpayer money to pay farmers directly for their lost income (see below). In the end, the tariffs did almost nothing to alter our total trade deficit.

In July 2018, the Trump administration announced it would use a Great Depression-era program, the Commodity Credit Corporation (CCC), to pay farmers up to $12 billion, increasing the transfers to farmers to $28 billion in May 2019.[13] The USDA estimated that aid payments constituted more than one-third of total farm income in 2019 and 2020.[14][15]

JimboSaturn · 56-60, M

I understand that the idea is to move industry back to the country in question, but can the country really make this product at the same cost as the foreign country?

And how long will this take? Some industries require huge amounts of entrance capital, who will invest the capital if they can't make it as cost effective as the foreign manufacturer. I suppose it's different for every industry of course.

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JimboSaturn · 56-60, M

@WintaTheAngle I remember economics 101, where it was taught that tariffs and taxes cause "deadweight losses" and cause inefficiency in a free market if you are a hard core free market economist, this is bad for everyone.

dakotaviper · 56-60, M

@JimboSaturn what everyone has to understand is that Tariff's are a bargaining chip. You and many other speak of free markets or free trade. But when it's so one sided, it's not FREE. Now is it.

Or let's look at it this way.
There was a Major US Fish Processor that was shut down last year because it was unfairly competing with China. Now is that Free Trade. Because according to the Political Left here in the USA, yes it was justified. Course this was in an area for the past 100 years has Voted at least 85% Democrat, but in the last election voted almost 98% Republican.

JimboSaturn · 56-60, M

@dakotaviper The U S and Canada already had a free trade agreement that Trump touted as a success. A tariff war is completely unnecessary

DDonde · 31-35, M

Yep.
I think the rationale is supposed to be that it would incentivize/force domestic companies to purchase domestically produced materials, rather than from abroad. But at the end of the day it will still result in an increase in cost for the end consumer, which will manifest as more inflation. Which the president has actually warned the US public about. But there's also the aspect of the tariff where the threat of imposing it is also just being used as a political weapon, rather than for a supposed economic benefit to the US.

dakotaviper · 56-60, M

Yes, what you are saying is True and Trump, 52 Senators, Over Half of the Representatives, Trump's Cabinet, Musk, and the DOGE understand it too.

Problem that You and Your 'I Hate America' brethren don't understand is that BUYING cheaper Chinese Goods doesn't Help the USA. It 100% BENEFITS China.

But the majority of us know that people like YOU would prefer that US Citizens be reliant on the Government Welfare Check.

ffony · M

@dakotaviper WHO TF do you think you're talking to? 😂

This comment is hidden. Show Comment

CountScrofula · 41-45, M

Well it's not specifically the American consumer but it ends up that way.

China ships a good to the US.

The American company which buys the good then pays a tariff to the government to purchase the good.

Because they are now basically paying more taxes to buy stuff, they increase prices to cover the loss in revenue.

gregloa · 61-69, M

What a bunch of panicking freaks. Even if the total extra cost of the tariffs is passed on to consumers it’s chicken feed. 100 dollars spent will cost you an extra 10 bucks on products coming from china. A twelve pack of beer costs more than that. Who here doesn’t waste a heck of a lot more money than that every single day?? I’ll gladly pay a heck of a lot more than that for products made in the USA and my conscious will be at peace knowing my hard earned money didn’t support slave labor from China. We should have never been in this position. What do you think will happen to the USA if war with China ever breaks out?? We are screwed that’s what! It is high time someone did something about it! High time! It’s a disgrace that we are dependent on China! That is a very dangerous thing and it’s been that way for far too long. American companies are making record billions in profits because of this and still charging American consumers outrageous marked up prices purely from greed. Laws need to be implemented forcing companies to stop and not allow price gouging because of tariffs. Common freaking sense.

ArishMell · 70-79, M

@gregloa I thing you raise a very serious point going far beyond America and her immediate internal politics.

Whter China uses "slve labour, I cannot say, but she has played a very sly game.

After Mao's death, Premier Chou En-Lai opened up the country to look all cuddly and friendly to "The West", and modified her own internal system, to such an extent many countries have become heavily in thrall to it. Then having obtained much of what it wants on its way to its ultimate World's Top Dog aim, is making itself far less cuddly and friendly.

The problems are not just the extra 10% on the shop prices in the USA.

China has also carefully manipulated herself and others to take over most of the main supplies of the world's more important metals apart from iron. Not only will you be taxing your own industries for importing raw materials the USA itself does not have, but America and many other countries are at risk of those metals being unavailable anyway.

Also, if the exporters find their sales fall they would not waste time searching for alternative buyers.

I see another potential problem with so many American, UK and other countries having let their manufacturing go to China. Supposedly private companies there are not entirely free. If China really wants to cut up rough what is there to stop it nationalising them thereby taking all the intellectual-property along with the physical assets and profits?. It's probably already done that with significant products like electronics, not for things like washing-machines.

I believe the phrase is "Sleep-walking into...."

justbob · 61-69, M

The point of tariffs like Trump's is that the imported product will be more expensive than similar products made elsewhere so fewer will be sold and the foreign manufacturer will make less money and pay less tax to the foreign government.

Trump knows this
Xi knows this

And it provides a motive to negotiate over various issues.

Toofargone · 26-30, F

@justbob just like sanctions in Russia most products became exact knock offs after the war. Theres a lot of people in russia who video current products in stores and explain which ones are identical and which ones are slightly different or completely off

BohemianBabe · M

One of the saddest things ever is that after the election, there was a spike in people googling things like "how do tariffs work?"

Yeah, a lot of people think that if there are tariffs on China or Mexico, those countries are paying the tariffs.

ArishMell · 70-79, M

You are right but the way these taxes were announced may have misled people into thinking the exporter pays.

GerOttman · 61-69, M

@ArishMell You know as it turns out, people today aren't all that difficult to mislead.

ArishMell · 70-79, M

@GerOttman Mmm. I am afraid so.....

SumKindaMunster · 51-55, M

Not exactly, the importer pays the tariff, but the expectation is that the cost is passed to the consumer. This encourages more domestic consumption as prices for domestic goods are more attractive than costly competitors from overseas.

Who pays for tariffs?

In a literal sense, companies that are importing goods from international trade partners pay the tariff fees to CBP at the port of entry within 10 days. But as an economic policy, tariffs have implications beyond the money exchanged at the border.

According to the Bureau of Labor Statistics (BLS), this indirectly raises domestic prices on goods as supply-and-demand forces often push the burden onto consumers in the importing country.

https://usafacts.org/articles/what-are-tariffs-and-how-do-they-work/

WintaTheAngle · 41-45, M

@SumKindaMunster That's right. We’re saying the same thing different ways.

The exporter pays the tariff and raises the cost to cover his expense.

My friend thought the foreign country paid the tariff at the point the export and the customer would still pay the lower original price.

TheShanachie · 61-69, M

Absolutely yes I know this and everyone I associate with knows this also.

deadgerbil · 26-30

I know that. It's unfortunate how many people here do not know that though. It's total ignorance of policies they blindly support

PicturesOfABetterTomorrow · 41-45, M

Based on Google trends. Most people who voted for Trump had no idea what a tariff was until after the election. Most decided to Google what they voted for after the fact.

Not a great start.

HobNoblin · 36-40, M

I don't care as long as it drives manufacturing back to the US and makes our country strong instead of dependent.

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WintaTheAngle · 41-45, M

@HobNoblin It won’t. The tariffs from his first term didn’t.

ffony · M

@HobNoblin

(tarriffs) makes our country strong instead of dependent.

... dependent on Canada no doubt? 🥳

HobNoblin · 36-40, M

@ArishMell We'll still do trade, probably with Russia. Between the US and Russia we should have everything we need just about.

JimboSaturn · 56-60, M

China does pay the tariff to the American government but the cost is passed to the final customer. So in essence, its a tax on the consumer from the government.

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Carla · 61-69, F

@WintaTheAngle and does so before he collects the goods.

WintaTheAngle · 41-45, M

@Carla Right

JimboSaturn · 56-60, M

@WintaTheAngle Yes I guess I meant the chinese product purchased from the importer.

Quetzalcoatlus · 46-50, M

The importer pays the tax to the government, but passes it on the customer via a higher price.

WintaTheAngle · 41-45, M

@Quetzalcoatlus Correct. I just want to check what people were being told because my friend was very confused and he got upset when I tried to tell him,

Quetzalcoatlus · 46-50, M

@WintaTheAngle The result will be higher prices on those goods. If he’s not careful, he’ll cause a recession.

WintaTheAngle · 41-45, M

@Quetzalcoatlus Possibly. Here in Britain we. All ours the Cost Of Living Crisis.

I understand it’s to force Americans to buy American. But if there’s no home industry for a particular product or commodity, people are being told they have to pay more or go without.

GerOttman · 61-69, M

that's only true if you buy the product. if you were to buy an American made product, assuming such were available, there would be no penalty.

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MethDozer · M

@GerOttman Toh can't raise the price of a raw material without raising the prices of the finished product. Corporations and big business will never, ever, ever absorb costs. They will always pass it down to keep investors happy.

Look at what the years of tariffs on Canadian lumber has done to inflate the housing market.

Besides, foreign companies didn't just come in and bulldoze American business. Nor did the "gubmint" send jobs overseas. American corporations and businesses sent the jobs and production overseas.the CEOs and investors sent them out of the country. Because they only care about extracting wealth and hording it.

GerOttman · 61-69, M

@MethDozer I understand what you have said, I disagree with pretty much all of it. What else can I say?

MethDozer · M

@GerOttman you don't agree that CEOs and Investors sent their production overseas because " Moore mUhkneee" Who sent it then?

thisguy20 · 41-45, M

Yes, the vast majority of us are aware of that. donOLD tRUMP and a portion of "his" supporters are the only ones who don't seem to understand that fact.