US businesses and consumers pay 90% of tariff costs, New York Fed says (opens in new tab)

Will this bring manufacturing back? It seems to be working to some extent, but its a risk to manufacturers because the whole thing could get reversed after an election.

Everyone? No, only the willfully ignorant.

Maybe it’s because of propaganda, mis information, social media, education or because they’re too busy and tired trying to make ends meet so they don’t have time to research issues for themselves.

It feels like it will be very difficult to course correct when so much money and power wants it this way.

US Tariffs only hurt US citizens. Anything else is simply the stuttering of a simpleton.

Tariffs in the legal sense are technically paid by the importer who sells a product. It's their responsibility to pay it... always.

The importer could technically eat that cost, and the consumer wouldn't see a difference on their price tag.

But what happens in practice, the vast majority of the time, is the importer passes that extra cost on to the consumer by raising the price they're selling it for. This is technically a business decision made by every importer individually, it is not a requirement.

The people saying tariffs are paid by the importer, or tariffs are paid by the consumer, are both right, but within different perspectives and depending on how each importer chooses to handle their tariffs.

The reason is, the whole world's manufacturing base had been destroyed in the War and the USA was the only man left standing!

We didnt need tarriffs because we were already winning the trade balance. Tarriffs made it harder to repatriate overseas gains.

https://www.stlouisfed.org/on-the-economy/2019/may/historica...

Alternatively: You don't need tariffs when you're the only industrial nation not bombed into oblivion.

>They make everything more expensive for businesses and in turn, the end consumer.

Agreed

That's how the US won the first trade war under trump 1 (and continued by Biden). Now Trump 2 tried to ramp it up and this time its backfired because other countries have refused to go along. Many have even been pushed to collaborate more closely with China. China's exports have only grown to record highs

There’s an argument that some sort of tariffs are actually necessary. The world is changing and the US has become reliant on countries who increasingly have divergent interests from the US. Additionally, some countries have aging populations that will make them more and more unreliable places to manufacture stuff in the next couple decades. It’s entirely reasonable to believe that it’s pretty critical for the US to begin the process of re-industrializing as soon as possible and tariffs are a crucial lever to make that happen.

But…how you do that matters. Re-industrialization is a process that will take decades and the businesses doing that need to be fairly sure of the government’s policy for most of that period. If Trump had built a broad consensus with Democrats for the tariff policy so that businesses could have understood that a future Democratic president or congressional majority would continue the tariff policy, then businesses would be able to plan accordingly and begin the massive capital outlays that come with re-shoring manufacturing. And the tariffs would strategically exclude certain items like the steel that would be necessary to build factories. And, lastly, you wouldn’t pick now to go on a deportation spree when a sizable chunk of the nations construction workers are undocumented immigrants, since all those factories will need to be built by someone and there aren’t enough Americans to do it.

But instead of the sane and well-reasoned way to do it, we’ve got Trump’s shoot-from-the-hip chaos version. The tariff policy changes weekly, so businesses can’t predict it, let alone rely on it in the way they would need to to spend the collective trillions of dollars on manufacturing infrastructure that need to be spent. And he’s antagonizing Democrats to such and extent that any future Democratic administration will drop the tariffs on day one. The result of which is that businesses, understandably, are hunkering down until he’s out of office. Instead of spurring the massive investment we need, his policies have chilled spending on manufacturing. The only thing we’re really building at the moment are data centers.

So there’s this narrative that tariffs are awful now that’s really the result of someone incompetently deploying them. Some sort of tariff policy would actually be a necessary medicine for the country to help heal the damage from an over reliance on a globalized system that is going to crumble in the coming decades. It won’t be easy, but the earlier the country starts to address it, the better the outcome will be. But it needs to be done intentionally, in a bi-partisan way and through acts of Congress, not in a scattershot fashion where Congress is a bystander and a single deranged lunatic pulls tariff percentages out of ass whenever the mood strikes him.

But no, some of us have had functional brains for a while. Thanks.

EDIT: to be fair, if you were even slighly more specific about the shit-eating morons that ate this illogical, stupid rhetoric, it would be too political and, at best, result in your comment getting clobbered so.... "everyone" it is. Can't make the dumb****s that led us here feel bad.

I suspect very few believes the claims other countries are paying the tariffs anymore. People are just saying that's true to stick to the party line.

Unfortunately, saying plainly untrue things has become a major part of US politics.

Just like Mexico will pay for the wall?

> The reality is that's a fundamental misunderstanding of what a tariff is.

Nope! It's a politician talk! People fall for lies whenever they are sold wrapped in a label of "cheap prices".

> is like fighting your neighbor who's dog keeps peeing in your yard by lighting your own couch on fire.

it's more like buying your own dog to pee in your yard, and keep out the neighbor's

What is missing from the convo is where the tarriffs go - they go to fund the federal gov't, which spends on Goods and Services for the American People (you hope).

What you would want to see is a reduction on income taxes concomitant with the increased tarriff revenue. US Gov gets the same amount of money, US consumers pay the same in taxes + tarriffs, but American industries get protection from overseas competition, strengthening key sectors of the US economy.

https://epa.maps.arcgis.com/apps/webappviewer/index.html?id=...

There is a LOT of other work we could be doing if we stopped trying to uphold existing uncompetitive industries

Not that hard to math out, the deadweight loss of tariffs is always non-zero. IIRC there was a pretty good paper that mathed out the impact of Obamas tire tariffs and concluded that it cost the economy significantly more jobs than it saved.

I'm not super educated on all the happenings in the car industry globally, but I've seen a few videos of Chinese EVs that put anything Ford, GM or other US brands have put out to absolute shame.

You start off with

> I think blanket tariffs are dumb don't get me wrong.

Then add a conjunction and use a single example to just make a point opposite to what you started with.

> So in my opinion, we've seen where they can work.

I can't help but think that you don't believe blanket tariffs are dumb because it worked for one industry and helps American jobs. Just start with that please.

The regional/small business owners are always threatened by competition from larger international firms and benefit less from international trade. They believe in the nationalist rhetoric and are opposed to free trade because it undercuts their businesses with cheaper products. They think the U.S. can remain the world's superpower without running a trade deficit and doesn't need to build alliances to maintain its power. This is Trump's base, and their misunderstanding of U.S. power is why they love the idea of tariffs. (good for local producers!) They want to get all the benefits of being a superpower without any of the costs.

What domestic behavior specifically?

If they're supposed to encourage industrial development at home, they've failed on that front. Building new factories requires years of commitment and billions of dollars, but the current administration has shown no interest in actually investing in that development. Meanwhile, the raw materials that would be necessary for a factory are more expensive precisely because of the tariffs, making new industry even less likely. Finally, the very dubious legal ground on which the tariffs are based means that no one is sure they'll be around to the end of this administration, much less into the next, so there's little interest in adapting long-term plans to a temporary state of affairs.

If they're supposed to encourage consumers to buy domestic, they've failed on that count too. Many goods simply are not available manufactured in the US (see above). If the tariffs were applied gradually and incrementally, maybe people would adapt, but from the consumer's mount of view, everything just gets more expensive, so what are they supposed to do? Again, applying tariffs to raw materials means that it's impossible for American businesses to undercut foreign imports even if they wanted to.

Like everything from this administration, the tariff are an impulsive decision based on poor economic understanding and incompetent execution.

In other words, they are a regressive tax --- pure and simple.

The purpose of a thing is what is does. If a tariff can be used to stop a war, then tariffs are meant as a strategic bargaining chips.

That is to say there is no 200% tariff on cups.

[1] - https://www.fedex.com/en-us/ancillary-clearance-service.html

It sure sounds like they aren't going to charge the shipper. And I can't blame them for not wanting to be left empty-handed.

Isn't that the 10% in the article? That's the mechanism by which "China pays the tariffs".

What does it mean "got the public to accept it?" The public had no say and these are probably illegal. On top of that, he probably literally does not know that these are effectively taxes on consumers (i.e. he believe his own bullshit).

No credit is due here whatsoever.

Netting it out, it’s a loss in revenue that disproportionately helps the richest and taxes the poor while making the government revenue decline. While also making the US dollar decline, multiplying the losses.

In most free trade agreements many products are without tariffs, some have quotas and others yet have tariff. For example, under CUSMA Canada have no tariffs on US made apparel and footwear, diary is under quota and steel has 25-50% tariffs. But then if you hear someone who lies a lot and has an agenda they will only tell you about steel tariffs and make you think that all US made products are under tariff.

That's an easy question. The answer is "they don't."

USMCA/NAFTA guaranteed free trade with Mexico and Canada.

Pre-2025, there was no blanket tariff on US goods in Europe. They tariffed some agricultural goods at 11%. Industrial goods were in single digits.

The tariff numbers that Trump purports (e.g. blanket 30% tariffs on Switzerland) are in no way proportional to their tariffs on US goods. It's just false.

The lie that other countries had massive blanket tariffs on all US goods is being sold to the American public to justify massive so-called "reciprocal" tariffs that (a) violate existing trade agreements, (b) make things expense for the American consumer, (c) don't necessary encourage new businesses in the US.

All Trump's policies assume he's playing a single-move game where his is the only move. It turns out it's an infinite game and the other side actually has free will and competent decision makers. He can't just wish people into the cornfield as he promised.

Even if there were massive tariffs towards the US, these are clearly politically motivated economic attacks, not motivated by economics. And that's not a thing an ally would do, regardless.

You may chose not to buy any products or goods that requires you to pay tariffs.

Which is the primarily goal to begin with. Influence consumer behaviour.

I realize that for some products and goods there may not be a an alternative choice of products or goods that do have tariffs.

In theory, over time, these will be increasingly replaced by products and services that have the competitive advantage of not having to tariffs applied to them.

Once tariffs are in place for a year or two it is possible that, domestic producers have expand capacity, have created jobs have caused supply chains shift and new production is based on the tariff based price structure

This however takes time. And to what extent it happens is not easy to predict.

Some may think that the next president will remove all tariffs the moment he or she takes office, so it is a short term problem. The problem with removing them all, is if the above has happened, and removing them will destroy American jobs.

Because it seems more likely to me that we have a greedy moron in charge who doesn’t mind his “business” (aka our society) loses trillions as long as his family and friends make billions.