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How Tariffs Actually Work

  

Category:  Sports

By:  bob-nelson  •  one week ago  •  50 comments

How Tariffs Actually Work



Trade wars are bad.


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Bob Nelson
Professor Guide
1  author  Bob Nelson    one week ago

'Course... MAGAs tell us not to believe anything he says....

 
 
 
Split Personality
Professor Guide
1.1  Split Personality  replied to  Bob Nelson @1    one week ago

But when Gavin Newsome says he "might" replace the federal EV rebates "if" Trump eliminates them and all EV models "might" not be eligible based on popularity, Elon Musk and Donald Trump lose their shit on their private social media sites as if Newsome already signed the nonexistent legislation.

The hypocrisy is priceless.

 
 
 
Bob Nelson
Professor Guide
1.1.1  author  Bob Nelson  replied to  Split Personality @1.1    one week ago

When one knows that their own word is worthless, it's logical to assume that others' word is equally worthless.

Makes communication difficult.

 
 
 
Buzz of the Orient
Professor Expert
1.2  Buzz of the Orient  replied to  Bob Nelson @1    one week ago

I'd really like to comment on this topic, so can you describe what the youtube you posted said?

 
 
 
Buzz of the Orient
Professor Expert
1.2.1  Buzz of the Orient  replied to  Buzz of the Orient @1.2    one week ago

Okay, I was sent the script and got about halfway through it when I nodded off, almost fell asleep reading the same old same old shit.   I'm beginning to get so bored about the tariff crap so never mind, I'll leave with an acronym - CUL8R.  Those who voted for him and/or support him are going to well deserve what it's going to cost them, and as for those who didn't, bear with it, and it's bound to be over 4 years down the road when voters wake up to realize how fucking stupid they were. 

 
 
 
TᵢG
Professor Principal
1.2.2  TᵢG  replied to  Buzz of the Orient @1.2.1    one week ago
Those who voted for him and/or support him are going to well deserve what it's going to cost them, and as for those who didn't, bear with it, and it's bound to be over 4 years down the road when voters wake up to realize how fucking stupid they were. 

I am concerned that this will be much easier said than done.   Remember that this arrogant, loose-cannon buffoon is still only president-elect.

And I have my doubts that Trump supporters will ever "realize how fucking stupid they were" because Trump gave them all sorts of opportunities to realize how unfit he is for office and they voted for the scoundrel nonetheless.

 
 
 
Vic Eldred
Professor Principal
1.3  Vic Eldred  replied to  Bob Nelson @1    one week ago

Now we are watching you tube videos.

What is the word in France, Bob?

Here is what I'm hearing:

BRUSSELS, Nov 6 (Reuters) - The European Union is considering options to appease  Donald Trump  on his return to the White House as it braces for a resumption of U.S. tariffs and other trade threats plus tough exchanges on how to treat China.

Trump warned shortly before his  U.S. presidential victory  that the 27-nation bloc will have to  "pay a big price"  for not buying enough American exports.

Brussels recognizes that threats of 10% tariffs on all U.S. imports and 60% on those from China are credible, not just campaign rhetoric, EU officials say.

The EU will seek to contact the future Trump administration before his inauguration and is already mulling future areas of cooperation that could ease or even remove the tariff threat.

One possible field is liquefied natural gas (LNG), which the EU could import more of from the U.S. to ease the trade deficit that preoccupies Trump.

Facing tariff threat, Europe eyes options to appease Trump | Reuters


They apparently got the message.
 
 
 
Bob Nelson
Professor Guide
1.3.1  author  Bob Nelson  replied to  Vic Eldred @1.3    one week ago

A President-elect says he will apply tariffs. Trade partners listen.

Gosh.

 
 
 
Vic Eldred
Professor Principal
1.3.2  Vic Eldred  replied to  Bob Nelson @1.3.1    one week ago

As I showed you, they heard him.

 
 
 
TᵢG
Professor Principal
1.3.3  TᵢG  replied to  Vic Eldred @1.3.2    one week ago

Yeah, this is working just fine ...

Britain will aim to convince Donald Trump its services-dominated trade with the United States should escape the worst of tariffs even as it cautiously repairs ties with the European Union and nurtures commercial links with China .    
 
 
 
Vic Eldred
Professor Principal
1.3.4  Vic Eldred  replied to  TᵢG @1.3.3    one week ago

I think it best to wait and see.

 
 
 
TᵢG
Professor Principal
1.3.5  TᵢG  replied to  Vic Eldred @1.3.4    one week ago

I think it is best to take information as it comes and process it appropriately.    That means to not leap to conspiracy theories but rather to shore up the most likely scenarios and plan for them.

 
 
 
Vic Eldred
Professor Principal
1.3.6  Vic Eldred  replied to  TᵢG @1.3.5    one week ago

I'm glad to hear you agree.

 
 
 
TᵢG
Professor Principal
1.3.7  TᵢG  replied to  Vic Eldred @1.3.6    one week ago

This is obvious Vic.   What is unusual is when people do not follow that basic method.

 
 
 
Split Personality
Professor Guide
1.3.8  Split Personality  replied to  Vic Eldred @1.3    one week ago
Now we are watching you tube videos.

Is that any different than using Twitter/X opinions to support a position?

 
 
 
Split Personality
Professor Guide
2  Split Personality    one week ago

Raising tariffs raises prices. Raising prices are measured by rising inflation.

Maybe we're all missing the point that Trump was going lower costs and inflation???

 
 
 
Bob Nelson
Professor Guide
2.1  author  Bob Nelson  replied to  Split Personality @2    one week ago

Hey! That's Econ102. Beyond MAGA.

 
 
 
GregTx
Professor Guide
2.2  GregTx  replied to  Split Personality @2    one week ago
Maybe we're all missing the point that Trump was going lower costs and inflation???

What's the date?

Raising prices are measured by rising inflation.

Technicality, that's incorrect.

 
 
 
Kavika
Professor Principal
2.2.1  Kavika   replied to  GregTx @2.2    one week ago
WASHINGTON (AP) — With characteristic bravado, Donald Trump has vowed that if voters return him to the White House, “inflation will vanish completely.”

Prices will come down and come down dramatically and come down fast,” he said.

Trump vowed to slash not just the price of gasoline, cooling bills and electricity, but predicted this would happen across the economy.  CNN August 24, 2024

 
 
 
TᵢG
Professor Principal
2.2.2  TᵢG  replied to  GregTx @2.2    one week ago
Technicality, that's incorrect.

The inflation rate is based on aggregate price increases across multiple sectors in the economy.   Thus it is indeed rising prices (in aggregate, sustained, over a large domain) that are reflected by the inflation rate.

Now let's hear your 'technicality' explanation.

 
 
 
Split Personality
Professor Guide
2.2.3  Split Personality  replied to  GregTx @2.2    one week ago
What's the date?

11/27/2024

Technicality, that's incorrect.

Ok Mr Bush, whatever that means...

 
 
 
GregTx
Professor Guide
2.2.4  GregTx  replied to  TᵢG @2.2.2    one week ago

So supply and demand are irrelevant? Isn't that the reason?.. supply dropped while demand remained, cause Covid?..

 
 
 
TᵢG
Professor Principal
2.2.5  TᵢG  replied to  GregTx @2.2.4    one week ago

Non sequitur gibberish.    

 
 
 
GregTx
Professor Guide
2.2.6  GregTx  replied to  TᵢG @2.2.5    one week ago

Sure...

 
 
 
Kavika
Professor Principal
3  Kavika     one week ago

Wait, what!!! Tariffs are the cure all for all of the US ills, cuz Trump said so. 

Never forget his first term when he slapped China with tariffs and they responded by not buying US ag products, mostly soy and we, the tax payer had to bail out the farmers to the tune of $23 billion dollars. Yea, that’s the way to stick it to China.

 
 
 
Sparty On
Professor Principal
4  Sparty On    one week ago

Trade is not always fair.

- Sparty On

 
 
 
TᵢG
Professor Principal
4.1  TᵢG  replied to  Sparty On @4    one week ago

Correct.   Maintaining a trade balance with a nation does not mean that our trade policies are great.    Sometimes it makes sense for us to import much more than we export to a particular country to satisfy consumer demand at better prices.  There is nothing wrong with that.   If we did not want to buy their goods at their prices, we would not import as much.   Basic economics.

If we believe that a trade imbalance is related to a weakness in our system then we should fix that weakness.   The trade imbalance (if it was bad) will be fixed over time by the market.  So if a trade imbalance indicates that we are over-reliant on a particular nation, we should work to secure more suppliers and especially cultivate more domestic suppliers (if possible).    Or if we have a struggling industry we should work on improving that industry.

What is generally not good is an overall trade deficit.   A nation naturally would prefer to export more than it imports in aggregate.   But, as noted, because the USA is such a powerful consumer base, we tolerate a deficit ... we import more than we export in aggregate.

Trump seems to view trade with childlike thinking.   He seems to not go further in his thinking than deficit=bad, surplus=good.   We have a serious problem on our hands.

 
 
 
Bob Nelson
Professor Guide
4.1.1  author  Bob Nelson  replied to  TᵢG @4.1    one week ago

Good post.

World trade is not a zero-sum game. America doesn't lose because Canada wins. Both can and do win.

 
 
 
Sparty On
Professor Principal
4.1.2  Sparty On  replied to  Bob Nelson @4.1.1    one week ago

lol ….when both countries think they are winning, there is no need to talk tariffs.    Tariffs usually come into play when one or the other think they are being wronged or unfairly traded with.

Surprising there is confuse here on this World Trade 101 concept.

 
 
 
TᵢG
Professor Principal
4.1.3  TᵢG  replied to  Sparty On @4.1.2    one week ago
Tariffs usually come into play when one or the other think they are being wronged or unfairly traded with.

Even when the trading partner is viewed as being fair, tariffs might be used to provide temporary protection for select domestic industries.

There are constructive uses for tariffs.   

Trump's gratuitous 25%/10% across-the-board tariff threats are a fine example of a destructive (stupidly so) use of tariffs.   Do you understand why this is so?

 
 
 
Sparty On
Professor Principal
4.1.4  Sparty On  replied to  TᵢG @4.1.3    one week ago

[]

 
 
 
TᵢG
Professor Principal
4.1.5  TᵢG  replied to  Sparty On @4.1.4    one week ago
removed for context
 
 
 
Thomas
Masters Guide
4.1.6  Thomas  replied to  TᵢG @4.1    one week ago
Trump seems to view trade with childlike thinking. 

That is what almost got him to 50%

 
 
 
Bob Nelson
Professor Guide
4.1.7  author  Bob Nelson  replied to  Thomas @4.1.6    one week ago

Americans don't understand international trade. But lots of them think they do.

Just follow NT. Depressing or hilarious.

 
 
 
Sparty On
Professor Principal
4.1.8  Sparty On  replied to  TᵢG @4.1.5    one week ago

[]

 
 
 
Sparty On
Professor Principal
4.1.9  Sparty On  replied to  Thomas @4.1.6    one week ago

lol …. Almost ….. hilarious

 
 
 
Sparty On
Professor Principal
4.1.10  Sparty On  replied to  Sparty On @4.1.8    one week ago

[]

 
 
 
Sparty On
Professor Principal
4.1.11  Sparty On  replied to  Sparty On @4.1.10    4 days ago

[removed] [] I made it over a month this time.

 
 
 
Greg Jones
Professor Participates
5  Greg Jones    one week ago

Tariffs are bad if companies pass on their added costs of doing business to their customers on down the line. Which is usually what happens.

But the same thing happens if they forced into pay higher taxes and fees. 

 
 
 
TᵢG
Professor Principal
5.1  TᵢG  replied to  Greg Jones @5    one week ago
Tariffs are bad if companies pass on their added costs of doing business to their customers on down the line. Which is usually what happens.

If?   A very small tariff is something an importer could eat.   Generally, however, importers pass the costs along because the excuse is obvious - the federal government just taxed your goods.    In other words, a new tax line-item appears on your receipt entitled 'tariff tax'.

But the same thing happens if they forced into pay higher taxes and fees. 

Indeed!   The very same.

So, do you agree that imposing tariffs increases consumer prices?

Now, do you recognize that Trump's threat of a 25% across-the-board tariff on Mexico and Canada would not only trigger trade wars with long-term negative consequences for the USA but would seriously raise the cost of living in the USA?    And then add the 10% additional across-the-board tariff on China.

How, exactly, would this be good for the USA?

 
 
 
Greg Jones
Professor Participates
5.1.1  Greg Jones  replied to  TᵢG @5.1    one week ago

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TᵢG
Professor Principal
5.1.2  TᵢG  replied to  Greg Jones @5.1.1    one week ago

What is your point?   Is it your (profound) misunderstanding that Trump has stopped illegal immigration with a phone call?

Or are you telling everyone that you actually believe Trump's braggadocious claim?

 
 
 
Jeremy Retired in NC
Professor Expert
6  Jeremy Retired in NC    one week ago

We hear it all the time "Trumps tariffs will make everything more expensive and it'll make inflation run out of control".  Typical false chicken hawk BS from the TDS inflicted among us.  Reality, it will bring jobs back to the US and keep prices and inflation down.

Back in the 1980' we had so many vehicles being imported into the US that it became a problem.  A problem to such an extent that the WH put tariffs in place and limited the number of vehicles being brought into the US.  Toyota, a big name in the auto industry, their response was that they would partner with GM and started manufacturing within the US to avoid the tariffs and limitations. 

THAT is the point of tariffs.  Either the company pays to have their product brought into the country or they manufacture it IN the US.  The latter creates jobs, stimulates the economy and they create a good solid, affordable product IN THIS COUNTRY.  They can and will still make a profit shipping out of the US.

Not many people understand this (like the premise of this article).  All they really know about tariffs is what they've been told.  Many times that information they have been told is wrong and they won't do any kind of research.

 
 
 
Kavika
Professor Principal
6.1  Kavika   replied to  Jeremy Retired in NC @6    one week ago

There are other considerations that aren’t addressed. If the importer wants the product and the manufacturer does not want to build a facility in the US the importer will cover the costs of the tariff and pass it on to the customer, creating higher prices and adding to inflation. This would not be possible with farm products as they will always be imported.

The next would be if a manufacturer built a plant in the US and they would have to pay US wages and benefits which increases the price of the product resulting in higher prices for the products and adding to inflation. 

When it comes to autos there are no autos made in the US that are 100% US sourced parts, put tariffs on auto parts and again it will increase the cost of the car/suv/truck and add to inflation. 

The US would of course face the same problem if the other countries decided to put in their own tariffs to hit back against the US, and tell us if we wanted to sell in their country we would have to build a plant there. 

That is not to say that some use of tariffs isn’’t appropriate but if you do use them expect some blow back like when we 20% to all tariffs in the 1930s and 29 countries reacted with their own tariffs and the economy slowed down greatly.  The car agreements in the 80s were a joint agreement between the US and Japan to balance out the trade and it worked but that 40 to 50 years ago and most of the world economies have grown enormously and many new markets have opened that have changed the flow or money and products. At that time we were the largest auto market in the world and that is no longer true and I doubt if we ever will be again. 

Many of the major auto makers have plants in the US and it may be detrimental to them to build more when they also have factories in their home country and other nations as well the same would apply to American companies locating factories in other countries.

Proceed with caution and negotiating with cuntries not force feeding them is probably a much better way to address it. 

Remember in Trumps first term and the result of the tariffs on China when they retaliated with tariffs and stopped buying farm products, the tax payer has bailed farmers out to the tune of $23 billion. The same can happen again with different countries and products.

 
 
 
Jeremy Retired in NC
Professor Expert
6.1.1  Jeremy Retired in NC  replied to  Kavika @6.1    one week ago
If the importer wants the product and the manufacturer does not want to build a facility in the US the importer will cover the costs of the tariff and pass it on to the customer, creating higher prices and adding to inflation.

If a like product is manufactured domestically, then the inflation was going to happen tariff or no tariff.  

This would not be possible with farm products as they will always be imported.

Then that would be incentive to start local manufacturing.  

The next would be if a manufacturer built a plant in the US and they would have to pay US wages and benefits which increases the price of the product resulting in higher prices for the products and adding to inflation.  

Not necessarily.  The inflation rise would be temporarily and minimal.  It would then lower as those paid wages are used and the economy is stimulated.

The car agreements in the 80s were a joint agreement between the US and Japan to balance out the trade and it worked but that 40 to 50 years ago and most of the world economies have grown enormously and many new markets have opened that have changed the flow or money and products. 

I used that as an example.  The same has happened in other areas and worked out the same way.  

Peole look at these tariffs and think they are permenant.  They're not.  Some may never be imposed, others may last a week others years.  Some may be reduced.  There are a lot of things tat are taken into consideration.  

 
 
 
TᵢG
Professor Principal
6.1.2  TᵢG  replied to  Jeremy Retired in NC @6.1.1    one week ago
If a like product is manufactured domestically, then the inflation was going to happen tariff or no tariff.  

How do you figure?   What would cause the price of the like product to rise given no imposed tariff?

Peole look at these tariffs and think they are permenant.  They're not. 

Not an argument I hear people using.   They typically do not complain (or even mention) permanence but rather two very clear consequences:

  • higher consumer prices
  • motivate for countermeasures (leading to trade wars)

The permanence factor that is mentioned is not that the tariffs are permanent but that the negative effects can be long-lasting.    If trading partners are dissuaded from trying to deal with the USA they will look elsewhere.

For example, the 2018 Trump tariff caused US agricultural exports to China to be cut in half.   We have recovered in the years since but are still below the export level we had prior to the Trump tariff.

And China can always repeat its resourcing of agricultural products from Argentina, Brazil, EU and Australia.   No doubt that since 2018, they have maintained a healthy set of contingency plans to deal with another rogue PotUS.   Now that they have Trump again (a known quantity) they are likely just waiting for the time when they again push the button and import from nations other than the USA for their agricultural needs.    (And agriculture is just one dimension of this.)

 
 
 
Kavika
Professor Principal
6.1.3  Kavika   replied to  Jeremy Retired in NC @6.1.1    one week ago
a like product is manufactured domestically, then the inflation was going to happen tariff or no tariff.

No, if there is a domestic mfg a foreign mfg would look long and hard about building here and the volume would have to be large to make financial sense. This is a situation that could go either way depending on the product being produced.

Then that would be incentive to start local manufacturing

We are talking food products, veggies melons, fish we are not going to manufacture that. With the last tariff set by trump the Chinese retaliated and the tax payer had to bail out the farmers to the tune of $23 billion.

Not necessarily.  The inflation rise would be temporarily and minimal.  It would then lower as those paid wages are used and the economy is stimulated.

Higher wages and price increases is inflation. 

used that as an example.  The same has happened in other areas and worked out the same way.  

It was a good example because it worked out for both sides which is the point.

People look at these tariffs and think they are permenant.  They're not.  Some may never be imposed, others may last a week others years.  Some may be reduced.  There are a lot of things tat are taken into consideration.  

They are not permanant they could be a day or a century and the rate can be changed any time. But if there is an tariff in the customs code it is enforced.

 
 
 
Thomas
Masters Guide
6.1.4  Thomas  replied to  Kavika @6.1    one week ago
At that time we were the largest auto market in the world and that is no longer true and I doubt if we ever will be again. 

Point, set and match. We live in different times. 

 
 
 
Nerm_L
Professor Expert
7  Nerm_L    one week ago

So, why are $20 Nikes sold for $80 in the US?  All the production costs are covered by the $20 that Nike charges importers.  What does the other $60 pay for?

Now these economic experts are telling us that a tariff adds $12 to the price of the Nikes and, by magic, that will require adding $96 to the base price.  For what?  Nike still only gets $20.  And a $12 tariff allows middlemen in the US to magically reach into your pocket and take another $36, on top of the $60, for doing absolutely nothing.

Obviously Democrats don't want to upset the apple cart.  Democrats like allowing the rich to skim 75 pct off the retail price of Nikes into their own pockets.  Democrats like that consumers must borrow money to pay for the skim going into rich pockets.  

These experts are unashamedly telling you that the economy has been deliberately rigged against you.  The rich importers are not adding any value to the economy.  Rich importers will pass any tax on to consumers and will use those taxes as an excuse to reach deeper into your pocket and make themselves richer.

This is what Ronald Reagan and Bill Clinton did to the US economy.  

 
 
 
freepress
Freshman Silent
8  freepress    one week ago

Since Trump goods are made overseas, that gives Trump an excuse to charge more profiting from the move. Trump goods are not made in Mexico or Canada and his voting base believes every word he says about anything however absurd the policy.

 
 

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