Of course they will, it becomes a cost of doing business and it hits everyone equally. People also love to talk about raising taxes on business, but that still gets passed on through.
The difference between a tariff and a tax is that a tariff can make the business rethink where it's sourcing is goods from and possibly change, the tax is just the tax.
Sure, but the fact "tax" isn't part of the term, as opposed to "sales tax" or "property tax" or "income tax" I think its use during the campaign mislead the American people. I don't think most people voted for 20% across the board higher taxes on goods and services.
I think you're framing this in an "I don't like this candidate" way rather than the electorate en masse is generally pretty ignorant. Each party always talks in terms that will largely be poorly understood by most. The idea of taxing businesses because they don't pay enough or taxing the "rich" because they don't pay enough is simply another way of passing that tax down to those who are consuming these services.
You don't raise Walmart's corporate tax rate without Walmart raising prices and affecting everyone who shops there. At least with the tariff there is options.
But that's the point. They generate revenue for the government, allowing the government to lower other taxes with the result that people aren't actually paying anything more on net but you've created a penalty for goods imported from adversarial countries that domestic manufacturers can avoid.
If they're being used as a major revenue generator, and not simply as a strategic way to negotiate with countries, then tariffs should be determined by Congress.
This is a huge power grab by the Presidency. Extreme across-the-board tariffs that Trump is talking about are unprecedented in American politics, outside of wartime perhaps. We are in uncharted territory and it's nothing good imo. If massive tariffs are so great, get a bill through the House and Senate.
Negotiating with other countries is traditionally done by the executive branch and tariffs are a significant lever in those negotiations. The President has the authority to do that because Congress passed a law that said so. They could pass a different law, if they want to, but what if they like the tariffs? Then all they have to do is lower other taxes as the tariff revenue allows them to do.
Also, just because tariffs generate a lot of revenue doesn't mean that's their purpose. Their purpose is to put pressure on specific countries or promote domestic manufacturing. The revenue is just what allows other taxes to be lowered to balance out the impact on US consumers.
The explicit goal of tarrifs is yo raise prices. This is not a bug, it's the whole reason for tarrifs to exist.
The argument is that if the going rate for something is high enough, it makes sense to manufacture it locally. And of course local manufacturing has major knock-on benefits.
This logic falls down though when you bring the capital cost, and life-span of a factory into account.
I'm only building a factory if I expect prices to -remain high-. And tarifs are set (unilaterally) by the president without congress (which I why Trump likes them) but they can be removed just as quickly.
Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions.
It also assumes that countries don't respond with tit-for-tat tarifs which harm factories already in the US. That certainly happened last time he used tarifs as a weapon.
This is not rocket science. It's not even economics. Its what anyone who has ever imported anything can figure out for themselves.
I agree, they are a powerful tool if used correctly. There are some benefits to the "make it locally" but it's also dependent on the specific goods. There are some tariff that have been in place for decades to simply prop up industries that should have died of years ago in favor of imports.
I'm convinced the entire reason Trump is so obsessed with tariffs is he doesn't need congressional support. It's just a power grab. Hopefully someone knocks some sense into him before he follows through, but if not, I'll enjoy seeing leopards eating people's faces at least.
Of course, people always like to turn the knob they have the most control over. It's also the easiest way to pass yourself off as being a protectionist.
Right now I think everyone is in speculation mode. I think everyone has forgotten 2016-2020 Trump speaks in massive exaggerations and hyperbole. The reality of what happens is likely to be much different than all this anticipation. The fact is the only one making a profit off of all of this talk is the news outlets that everyone is consuming incessantly.
> Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions.
With NAFTA/NAFTA 2, it doesn't make sense to manufacture in the USA anyway when they have cheaper labor in Mexico. China knows this too.
> I'm only building a factory if I expect prices to -remain high-. And tarifs are set (unilaterally) by the president without congress (which I why Trump likes them) but they can be removed just as quickly.
But they're often not, e.g. Biden kept many of the tariffs Trump imposed and even increased some of them.
> Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions.
This is obviously going to depend on the nature of the industry, but even when it moves to other countries, this can still be of benefit to the US because then those countries develop an industry instead of US consumers relying on a single supplier country as a monopolist and single point of failure. That could even long-term reduce prices as those other countries then compete with each other once the tariffs allow them to develop their manufacturing base.
> It also assumes that countries don't respond with tit-for-tat tarifs which harm factories already in the US.
Tit-for-tat would require the country on the wrong end of the tariffs to be importing as much from the US as the US does from them.
It would also require that country to actually avoid buying US products. Maybe it's easier to move sneaker manufacturing to Vietnam than to replace high tech products from US companies.
It would also require that country to not already be disfavoring US imports, as might be implied from an imbalance of trade to begin with.
Soya bean farmers in the last round of tarifs got hit very hard by retaliatory tarifs.
Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US.
Yes Biden kept the tarifs, but didn't go on the news to announce it. He doesn't make it such a political football that others feel the need to politically respond.
The point is not that Biden did or did not. The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that.
Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed.
> Soya bean farmers in the last round of tarifs got hit very hard by retaliatory tarifs.
The premise of a trade war is that you're negotiating with the other country. It's not that it has zero impact, it's that the impact on them is larger than the impact on you, so you have more leverage.
> Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US.
Still implying that the other country can't use those things to retaliate even though the money is going to US companies.
> Yes Biden kept the tarifs, but didn't go on the news to announce it.
The premise was supposed to be that the tariffs would be unstable and companies wouldn't act, but companies looking at the past for guidance would now say that once the tariffs are there they stay for a while.
> The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that.
The alternative is that someone else does and you don't and then they can undercut you in the market because you're paying the tariffs and they don't.
Also, what's the alternative supposed to be? Even if the tariffs were put in place by Congress, every two years you have a new Congress and they could do something different, and the same with any other rules or regulations or taxes.
> Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed.
Which is also good for the US, because it gains a second supplier for things currently only made in China, and Mexico is geographically closer to the US which saves on shipping forever once that manufacturing base is self-sustainable, and likewise provides geographically closer production of lower tech products which are the inputs to higher tech products and facilitate production of higher tech products in the US.
> The explicit goal of tarrifs is yo raise prices. This is not a bug, it's the whole reason for tarrifs to exist.
There was an interview (in the Washington Post?) with a cattle rancher who wanted higher tariffs. This is because international competition forced him to sell at lower prices. The tariffs would increase international beef so he could then raise his prices (selling to his fellow Americans).
Of course in the interview the same rancher wanted Trump to lower inflation and reduce the prices on his inputs.
So inflation should be lower for him, but higher for his customers.
While tariffs may make people consider where they source their products, corporate income/profits tax has incentives too.
Things like hiring more people, research, development, capital improvements, etc all impact the companies tax bottom line. So in that sense, corporate taxes incentives companies to spend their money instead of hoarding it, using it for executive bonuses, or giving it back to the shareholders.
A vast majority of manufacturers don't source their materials from the US for good reason. Either the US is more expensive or the US supply is completely non-existant. Tariffs aren't going to fix that because domestic suppliers when given a monopoly are not going to magically lower costs and moving production here will take years and cost far more than just continuing to pay the tarrifs.
Tariffs increase cost. That is the bottom line. The intent of tariffs is to make it profitable for domestic production to compete with cut rate foreign producers. However, with out removing regulations domestic production will never ramp up and we get the worst of both worlds.
Tariffs and deregulation will reinvigorate the domestic economy.
I would be fine with all of those. The environmental regulations are the top of my list though. I have seen too many instances of EPA or NEPA completely blocking or slowing development to an untenable pace to support them. Workplace safety is important but I prefer it as recommendations not requirements. US labor is not competitive internationally. We expect more compensation for the same job people halfway around the world are doing to produce things for us. If you want domestic production you have to remove the chains that made us uncompetitive in the first place. Minimum wage and environmental protections are the top of the list.
The Hoover dam was built in 5 years, 2 years after the idea was approved. Skyscrapers of the same era were built by men walking on I-beams, untethered, hundreds of feet in the air. We have become too risk averse to compete internationally.
Just the NEPA paperwork for a new project can take 5 years. For NEPA in particular, we pay employees at the state level to file the paperwork and employees at the federal level to review it. There is no way that is an efficient use of public funds. All it does is slow down our development and put the power of controlling development in each state in the hands of the feds. We are essentially paying twice to ask for permission to build the things we want to build.
I wouldn't want one of my kids working in an unsafe environment. I don't think you would either. Just as I do not want the poor air quality of the 70s to come back. I don't want lead in my water. I blame government if they do not enforce restrictions, and I blame industry for not following them. We are not going to be competitive as long as China is willing to flush their environment down the toilet, and treat their workers like chattel slaves. And why would we want that for the American people?? Having said all that, I agree the paperwork is a nightmare. That needs changed ... instead of the attitude of 'you must have permission to do this', the approach should be 'go ahead and do what you want, but if something goes wrong and we find you did not verify environmental impacts or OSHA regs we will sue you for real $$$. That approach fits better with how we do things in this country. It's what we've been following for all things software, which is why we are quite able to develop and build great things quickly in this part of the market. It should be up to each company to be willing to take risks if they choose.
You contradicted yourself and offered a solution that works in all cases. "Do what you want but you will be sued if something goes wrong". The problem with almost all of our regulations is that you have to prove you are compliant by satisfying inspectors before you can even start.
We can just keep looking back. Those concerned about whether appointed department heads will need to pass even basic checks? How about Bret Kavanaugh, whose accusations of sexual assault/rape were intercepted by the Trump White House & suppressed? https://www.theguardian.com/us-news/2024/oct/08/trump-brett-...
There's nothing about what happens with these people that makes me think it deserves even the faintest whiff of credulity.
Of course they will, it’s a business. When a competitor moves its manufacturing somewhere with lower or no tariffs, and can undercut AutoZone’s prices, they will be pressured to move manufacturing too. That’s the point of the tariffs.
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[ 1.8 ms ] story [ 91.7 ms ] threadNo, say it ain't so.
The difference between a tariff and a tax is that a tariff can make the business rethink where it's sourcing is goods from and possibly change, the tax is just the tax.
Tariffs are taxes.
You don't raise Walmart's corporate tax rate without Walmart raising prices and affecting everyone who shops there. At least with the tariff there is options.
But that's the point. They generate revenue for the government, allowing the government to lower other taxes with the result that people aren't actually paying anything more on net but you've created a penalty for goods imported from adversarial countries that domestic manufacturers can avoid.
This is a huge power grab by the Presidency. Extreme across-the-board tariffs that Trump is talking about are unprecedented in American politics, outside of wartime perhaps. We are in uncharted territory and it's nothing good imo. If massive tariffs are so great, get a bill through the House and Senate.
Also, just because tariffs generate a lot of revenue doesn't mean that's their purpose. Their purpose is to put pressure on specific countries or promote domestic manufacturing. The revenue is just what allows other taxes to be lowered to balance out the impact on US consumers.
The argument is that if the going rate for something is high enough, it makes sense to manufacture it locally. And of course local manufacturing has major knock-on benefits.
This logic falls down though when you bring the capital cost, and life-span of a factory into account.
I'm only building a factory if I expect prices to -remain high-. And tarifs are set (unilaterally) by the president without congress (which I why Trump likes them) but they can be removed just as quickly.
Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions.
It also assumes that countries don't respond with tit-for-tat tarifs which harm factories already in the US. That certainly happened last time he used tarifs as a weapon.
This is not rocket science. It's not even economics. Its what anyone who has ever imported anything can figure out for themselves.
Right now I think everyone is in speculation mode. I think everyone has forgotten 2016-2020 Trump speaks in massive exaggerations and hyperbole. The reality of what happens is likely to be much different than all this anticipation. The fact is the only one making a profit off of all of this talk is the news outlets that everyone is consuming incessantly.
With NAFTA/NAFTA 2, it doesn't make sense to manufacture in the USA anyway when they have cheaper labor in Mexico. China knows this too.
But they're often not, e.g. Biden kept many of the tariffs Trump imposed and even increased some of them.
> Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions.
This is obviously going to depend on the nature of the industry, but even when it moves to other countries, this can still be of benefit to the US because then those countries develop an industry instead of US consumers relying on a single supplier country as a monopolist and single point of failure. That could even long-term reduce prices as those other countries then compete with each other once the tariffs allow them to develop their manufacturing base.
> It also assumes that countries don't respond with tit-for-tat tarifs which harm factories already in the US.
Tit-for-tat would require the country on the wrong end of the tariffs to be importing as much from the US as the US does from them.
It would also require that country to actually avoid buying US products. Maybe it's easier to move sneaker manufacturing to Vietnam than to replace high tech products from US companies.
It would also require that country to not already be disfavoring US imports, as might be implied from an imbalance of trade to begin with.
Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US.
Yes Biden kept the tarifs, but didn't go on the news to announce it. He doesn't make it such a political football that others feel the need to politically respond.
The point is not that Biden did or did not. The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that.
Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed.
The premise of a trade war is that you're negotiating with the other country. It's not that it has zero impact, it's that the impact on them is larger than the impact on you, so you have more leverage.
> Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US.
Still implying that the other country can't use those things to retaliate even though the money is going to US companies.
> Yes Biden kept the tarifs, but didn't go on the news to announce it.
The premise was supposed to be that the tariffs would be unstable and companies wouldn't act, but companies looking at the past for guidance would now say that once the tariffs are there they stay for a while.
> The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that.
The alternative is that someone else does and you don't and then they can undercut you in the market because you're paying the tariffs and they don't.
Also, what's the alternative supposed to be? Even if the tariffs were put in place by Congress, every two years you have a new Congress and they could do something different, and the same with any other rules or regulations or taxes.
> Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed.
Which is also good for the US, because it gains a second supplier for things currently only made in China, and Mexico is geographically closer to the US which saves on shipping forever once that manufacturing base is self-sustainable, and likewise provides geographically closer production of lower tech products which are the inputs to higher tech products and facilitate production of higher tech products in the US.
There was an interview (in the Washington Post?) with a cattle rancher who wanted higher tariffs. This is because international competition forced him to sell at lower prices. The tariffs would increase international beef so he could then raise his prices (selling to his fellow Americans).
Of course in the interview the same rancher wanted Trump to lower inflation and reduce the prices on his inputs.
So inflation should be lower for him, but higher for his customers.
Things like hiring more people, research, development, capital improvements, etc all impact the companies tax bottom line. So in that sense, corporate taxes incentives companies to spend their money instead of hoarding it, using it for executive bonuses, or giving it back to the shareholders.
A vast majority of manufacturers don't source their materials from the US for good reason. Either the US is more expensive or the US supply is completely non-existant. Tariffs aren't going to fix that because domestic suppliers when given a monopoly are not going to magically lower costs and moving production here will take years and cost far more than just continuing to pay the tarrifs.
Tariffs and deregulation will reinvigorate the domestic economy.
The Hoover dam was built in 5 years, 2 years after the idea was approved. Skyscrapers of the same era were built by men walking on I-beams, untethered, hundreds of feet in the air. We have become too risk averse to compete internationally.
Just the NEPA paperwork for a new project can take 5 years. For NEPA in particular, we pay employees at the state level to file the paperwork and employees at the federal level to review it. There is no way that is an efficient use of public funds. All it does is slow down our development and put the power of controlling development in each state in the hands of the feds. We are essentially paying twice to ask for permission to build the things we want to build.
We can just keep looking back. Those concerned about whether appointed department heads will need to pass even basic checks? How about Bret Kavanaugh, whose accusations of sexual assault/rape were intercepted by the Trump White House & suppressed? https://www.theguardian.com/us-news/2024/oct/08/trump-brett-...
There's nothing about what happens with these people that makes me think it deserves even the faintest whiff of credulity.
Prices will go up.
Consumers will start to look for alternatives that don't carry the tariff.
That's what tariffs are designed to do.
But in any case, where there's an incentive, there's a way. Alternative inputs will be sought.