Trade Wars and Tariffs

#5,476
#5,476
Thunder Good-Oil said:
Do you have any evidence of US consumers price increases? 75 year old Econ text books are telling us this. But if a foreign entity is making a 40% margin on what they sell us and now they are required to split that with the Treasury then the math favors the US. If they raise their prices then their US based competition will eat their lunch. They’ll take their 20% profit (after tariffs) and like it. 20% > 0%.
Click to expand...
Hey econ genius... the "They" that you refer to is *US*, not some foreigner.

We are the ones that will pay this new TAX, not some foreign entity or government.

But the good news is, of course, Wall Street isn't falling out of bed for one reason and only one reason...

1000000192.jpg
 
#5,477
#5,477
Thunder Good-Oil said:
When the foreign entities cut their prices to cover the tariffs, they do.

There are more than 2. Consumers. US companies. Foreign companies. Foreign governments.

Even if the foreign entities don’t cover the tariffs and US consumers pay more for their underwear stitched in Vietnam, that’s not necessarily bad. Half the f***ing country pays ZERO FIT. And rich consumers pay more consumption taxes or fees than the lower classes. Consumption, sales, value added, tariffs - whatever you want to call it it’s needed to work on the massive ND.
Click to expand...
Rubbish.

Tariffs on goods imported to the United States are typically paid by the U.S. importer, not the foreign exporter. Here's how it works:
  1. Importers Pay Directly: When a tariff is imposed, the U.S. company or entity importing the goods is responsible for paying the tariff to U.S. Customs Service at the point of entry. This increases the cost of the imported goods.
  2. Cost Passed to Consumers: Importers often pass on the increased costs to U.S. consumers in the form of higher prices for goods. For example, if a tariff raises the cost of imported steel, manufacturers using that steel may increase prices for products like cars or appliances.
  3. Supply Chain Impacts: Businesses may absorb some costs to remain competitive, but this can reduce profit margins. Alternatively, they might seek cheaper suppliers or shift production, which can disrupt supply chains and affect jobs.
  4. Economic Ripple Effects: Higher prices can reduce consumer purchasing power, potentially slowing economic growth. Conversely, tariffs may protect domestic industries by making foreign goods less competitive, potentially benefiting local producers.
  5. Foreign Exporters: While exporters don’t directly pay the tariff, they may face reduced demand for their goods in the U.S. market due to higher prices, which can hurt their revenue.
Who Bears the Cost?
  • Consumers: Pay higher prices for goods affected by tariffs.
  • Importers/Businesses: Face increased costs and may see reduced profits or need to adjust supply chains.
  • Domestic Producers: May benefit from less competition but could face retaliatory tariffs from other countries.
  • Foreign Exporters: Lose market share if their goods become too expensive.
Real-World Example: Studies on the 2018-2019 U.S. tariffs on Chinese goods (e.g., by the National Bureau of Economic Research) found that American consumers and businesses bore over 90% of the cost through higher prices and supply chain disruptions, with minimal direct impact on Chinese exporters.

WHAT DO ECONOMISTS THINK?

Most economists are critical of broad tariffs, like those proposed or implemented by the Trump administration, arguing they harm the U.S. economy more than they help. Here’s a breakdown of the prevailing views based on economic research and expert opinions:

Why Most Economists Oppose Broad Tariffs​

  1. Increased Costs for Consumers: Tariffs are taxes paid by U.S. importers, often passed on to consumers through higher prices. Studies from the 2018-2019 Trump tariffs, such as those on Chinese goods, showed that U.S. consumers bore over 90% of the cost through price increases. For example, a 2018 tariff on washing machines raised prices by about $86 per unit, costing consumers $1.5 billion annually.bbc.com
  2. Inflationary Pressure: Economists warn that tariffs, like the 10% universal tariff and higher rates on countries like China (up to 145% in 2025), could drive inflation. Estimates suggest a 1% increase in the effective tariff rate raises core PCE prices by 0.1%, potentially pushing inflation to 4% from current levels. This could hit lower-income households hardest, with estimates of $1,000-$2,148 in added annual costs.cbsnews.com
  3. Economic Growth and Job Losses: Broad tariffs are projected to reduce U.S. GDP and wages. The Penn Wharton Budget Model estimated that Trump’s April 2025 tariffs could cut GDP by 6-8% and wages by 5-7%, with a middle-income household facing a $22,000-$58,000 lifetime loss. Studies from Trump’s first term found tariffs reduced manufacturing employment by a net 2.7% due to higher input costs and retaliatory tariffs.budgetmodel.wharton.upenn.educnbc.com
  4. Retaliatory Tariffs: Foreign countries often respond with their own tariffs, hurting U.S. exporters. A 2020 study estimated $27 billion in U.S. export losses from 2018-2019 retaliatory tariffs. This disrupts industries like agriculture and manufacturing, which rely on global markets.taxfoundation.org
  5. Trade Deficit Misconceptions: Trump’s focus on reducing bilateral trade deficits is criticized as misguided. Economists argue deficits are driven by macroeconomic factors like government spending and investment flows, not just trade policies. Tariffs may reduce imports but also harm exports, leaving the trade deficit largely unchanged.nytimes.com
  6. Supply Chain Disruptions: Tariffs on integrated supply chains, like the auto industry with Canada and Mexico, raise costs and disrupt production. Economist Jim Stanford noted that auto parts can cross borders multiple times, and a 25% tariff could damage both U.S. and Canadian industries.tcf.org

Minority Support for Tariffs​

A small group of economists and analysts support targeted tariffs for specific goals:
  • Oren Cass (American Compass): Argues tariffs can incentivize domestic manufacturing and strengthen supply chain security, particularly against China. He sees them as a tool to address the hollowing out of industrial regions, though he acknowledges implementation challenges.nytimes.combbc.com
  • Jeff Ferry (Coalition for a Prosperous America): Supports tariffs to boost U.S. industry and national security, arguing they can protect jobs in strategic sectors.bbc.com
  • Potential Negotiation Tool: Some, like Cass, suggest tariffs could be used as leverage to secure better trade deals, though this depends on consistent policy and successful negotiations.nytimes.com

Mixed Perspectives​

  • Historical Context: Supporters like Trump’s team cite historical precedents, such as tariffs during the U.S.’s industrial rise in the 1800s, but economists note that modern economies are far more globalized, making comparisons less relevant. The Smoot-Hawley Tariff of 1930, for example, deepened the Great Depression by reducing trade.cnbc.com
  • Short-Term vs. Long-Term: Some economists acknowledge tariffs might protect specific industries or jobs in the short term but argue the long-term costs—higher prices, reduced growth, and global trade disruptions—outweigh these benefits.pbs.org
  • Political Strategy: Analysts like Jason Furman note that Trump’s tariffs may serve political goals, like signaling action on trade imbalances or immigration, rather than purely economic ones. This can create uncertainty, deterring long-term business investment.hks.harvard.edu

Recent Developments (2025)​

  • Trump’s “Liberation Day” tariffs (April 2025), including a 10% baseline tariff and higher rates on specific countries, have been criticized for destabilizing markets and raising recession risks. The International Monetary Fund and Federal Reserve Chair Jerome Powell warned of slower U.S. and global growth.@AP@AP
  • Some tariffs were paused or adjusted after pushback, suggesting flexibility, but the uncertainty has already lowered consumer and business confidence.reuters.com
  • A few economists, like Torsten Sløk, have reconsidered their initial skepticism, suggesting tariffs might yield strategic benefits if carefully managed, but this remains a minority view.@MarioNawfal

Consensus​


The vast majority of economists (e.g., 93% in a survey during Trump’s first term) believe broad tariffs harm American consumers and businesses more than they help, with costs like higher prices, slower growth, and job losses outweighing benefits to protected industries. Supporters see potential in targeted tariffs for strategic or political goals, but even they caution against broad, indiscriminate applications
 
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#5,479
#5,479
DinkinFlicka said:
Looks like @NorthDallas40 is a libtard now
Click to expand...
Or maybe I can just see really idiotic international trade policy for what it is and call it that 🤷‍♂️

I’ve been on a tear over this stupidity since the US trade representative put that 3rd grade formula they used on their webpage.
 
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#5,480
#5,480
MontyPython said:
Hey econ genius... the "They" that you refer to is *US*, not some foreigner.

We are the ones that will pay this new TAX, not some foreign entity or government.

But the good news is, of course, Wall Street isn't falling out of bed for one reason and only one reason...

View attachment 755163
Click to expand...

Hey, Genius. Try to keep up with the discussion before commenting.
 
#5,481
#5,481
MontyPython said:
Rubbish.

Tariffs on goods imported to the United States are typically paid by the U.S. importer, not the foreign exporter. Here's how it works:
  1. Importers Pay Directly: When a tariff is imposed, the U.S. company or entity importing the goods is responsible for paying the tariff to U.S. Customs Service at the point of entry. This increases the cost of the imported goods.
  2. Cost Passed to Consumers: Importers often pass on the increased costs to U.S. consumers in the form of higher prices for goods. For example, if a tariff raises the cost of imported steel, manufacturers using that steel may increase prices for products like cars or appliances.
  3. Supply Chain Impacts: Businesses may absorb some costs to remain competitive, but this can reduce profit margins. Alternatively, they might seek cheaper suppliers or shift production, which can disrupt supply chains and affect jobs.
  4. Economic Ripple Effects: Higher prices can reduce consumer purchasing power, potentially slowing economic growth. Conversely, tariffs may protect domestic industries by making foreign goods less competitive, potentially benefiting local producers.
  5. Foreign Exporters: While exporters don’t directly pay the tariff, they may face reduced demand for their goods in the U.S. market due to higher prices, which can hurt their revenue.
Who Bears the Cost?
  • Consumers: Pay higher prices for goods affected by tariffs.
  • Importers/Businesses: Face increased costs and may see reduced profits or need to adjust supply chains.
  • Domestic Producers: May benefit from less competition but could face retaliatory tariffs from other countries.
  • Foreign Exporters: Lose market share if their goods become too expensive.
Real-World Example: Studies on the 2018-2019 U.S. tariffs on Chinese goods (e.g., by the National Bureau of Economic Research) found that American consumers and businesses bore over 90% of the cost through higher prices and supply chain disruptions, with minimal direct impact on Chinese exporters.

WHAT DO ECONOMISTS THINK?

Most economists are critical of broad tariffs, like those proposed or implemented by the Trump administration, arguing they harm the U.S. economy more than they help. Here’s a breakdown of the prevailing views based on economic research and expert opinions:

Why Most Economists Oppose Broad Tariffs​

  1. Increased Costs for Consumers: Tariffs are taxes paid by U.S. importers, often passed on to consumers through higher prices. Studies from the 2018-2019 Trump tariffs, such as those on Chinese goods, showed that U.S. consumers bore over 90% of the cost through price increases. For example, a 2018 tariff on washing machines raised prices by about $86 per unit, costing consumers $1.5 billion annually.bbc.com
  2. Inflationary Pressure: Economists warn that tariffs, like the 10% universal tariff and higher rates on countries like China (up to 145% in 2025), could drive inflation. Estimates suggest a 1% increase in the effective tariff rate raises core PCE prices by 0.1%, potentially pushing inflation to 4% from current levels. This could hit lower-income households hardest, with estimates of $1,000-$2,148 in added annual costs.cbsnews.com
  3. Economic Growth and Job Losses: Broad tariffs are projected to reduce U.S. GDP and wages. The Penn Wharton Budget Model estimated that Trump’s April 2025 tariffs could cut GDP by 6-8% and wages by 5-7%, with a middle-income household facing a $22,000-$58,000 lifetime loss. Studies from Trump’s first term found tariffs reduced manufacturing employment by a net 2.7% due to higher input costs and retaliatory tariffs.budgetmodel.wharton.upenn.educnbc.com
  4. Retaliatory Tariffs: Foreign countries often respond with their own tariffs, hurting U.S. exporters. A 2020 study estimated $27 billion in U.S. export losses from 2018-2019 retaliatory tariffs. This disrupts industries like agriculture and manufacturing, which rely on global markets.taxfoundation.org
  5. Trade Deficit Misconceptions: Trump’s focus on reducing bilateral trade deficits is criticized as misguided. Economists argue deficits are driven by macroeconomic factors like government spending and investment flows, not just trade policies. Tariffs may reduce imports but also harm exports, leaving the trade deficit largely unchanged.nytimes.com
  6. Supply Chain Disruptions: Tariffs on integrated supply chains, like the auto industry with Canada and Mexico, raise costs and disrupt production. Economist Jim Stanford noted that auto parts can cross borders multiple times, and a 25% tariff could damage both U.S. and Canadian industries.tcf.org

Minority Support for Tariffs​

A small group of economists and analysts support targeted tariffs for specific goals:
  • Oren Cass (American Compass): Argues tariffs can incentivize domestic manufacturing and strengthen supply chain security, particularly against China. He sees them as a tool to address the hollowing out of industrial regions, though he acknowledges implementation challenges.nytimes.combbc.com
  • Jeff Ferry (Coalition for a Prosperous America): Supports tariffs to boost U.S. industry and national security, arguing they can protect jobs in strategic sectors.bbc.com
  • Potential Negotiation Tool: Some, like Cass, suggest tariffs could be used as leverage to secure better trade deals, though this depends on consistent policy and successful negotiations.nytimes.com

Mixed Perspectives​

  • Historical Context: Supporters like Trump’s team cite historical precedents, such as tariffs during the U.S.’s industrial rise in the 1800s, but economists note that modern economies are far more globalized, making comparisons less relevant. The Smoot-Hawley Tariff of 1930, for example, deepened the Great Depression by reducing trade.cnbc.com
  • Short-Term vs. Long-Term: Some economists acknowledge tariffs might protect specific industries or jobs in the short term but argue the long-term costs—higher prices, reduced growth, and global trade disruptions—outweigh these benefits.pbs.org
  • Political Strategy: Analysts like Jason Furman note that Trump’s tariffs may serve political goals, like signaling action on trade imbalances or immigration, rather than purely economic ones. This can create uncertainty, deterring long-term business investment.hks.harvard.edu

Recent Developments (2025)​

  • Trump’s “Liberation Day” tariffs (April 2025), including a 10% baseline tariff and higher rates on specific countries, have been criticized for destabilizing markets and raising recession risks. The International Monetary Fund and Federal Reserve Chair Jerome Powell warned of slower U.S. and global growth.@AP@AP
  • Some tariffs were paused or adjusted after pushback, suggesting flexibility, but the uncertainty has already lowered consumer and business confidence.reuters.com
  • A few economists, like Torsten Sløk, have reconsidered their initial skepticism, suggesting tariffs might yield strategic benefits if carefully managed, but this remains a minority view.@MarioNawfal

Consensus​


The vast majority of economists (e.g., 93% in a survey during Trump’s first term) believe broad tariffs harm American consumers and businesses more than they help, with costs like higher prices, slower growth, and job losses outweighing benefits to protected industries. Supporters see potential in targeted tariffs for strategic or political goals, but even they caution against broad, indiscriminate applications
Click to expand...

Try having an original thought instead of copy/pasting a ChatGPT reply.
 
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#5,482
#5,482
NorthDallas40 said:
Or maybe I can just see really idiotic international trade policy for what it is and call it that 🤷‍♂️

I’ve been on a tear over this stupidity since the US trade representative put that 3rd grade formula they used on their webpage.
Click to expand...

What would you do instead? Let the rest of the world have unrestricted access to the US consumer while they do nothing about problems they’re creating for us while enabling China to continue doing their ****?
 
#5,483
#5,483
Thunder Good-Oil said:
What would you do instead? Let the rest of the world have unrestricted access to the US consumer while they do nothing about problems they’re creating for us while enabling China to continue doing their ****?
Click to expand...
The same answer I gave you last time you tried this shift the burden tactic. What I wouldn’t do is stupid ass broad high level tariffs as have been applied… and removed… and reapplied… and removed again… thus far. China is the issue. Focus on China and use them as an example of what will happen instead of all this idiotic chaotic public flip flopping around.
 
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#5,484
#5,484
NorthDallas40 said:
The same answer I gave you last time you tried this shift the burden tactic. What I wouldn’t do is stupid ass broad high level tariffs as have been applied… and removed… and reapplied… and removed again… thus far. China is the issue. Focus on China and use them as an example of what will happen instead of all this idiotic chaotic public flip flopping around.
Click to expand...
Amen.

Trump's Don Quixoti jousts against the entire world - including those menacing Australian penguins - is a sledgehammer approach to a scalpel solution. Doubling down on this "solution" is just plain dumb.

Thank God that TACO.
 
#5,485
#5,485
I agree with premise of tariffs but I still don't know what the heck Trump is doing. I see too many factory and office jobs going to Thailand, India, China, Vietnam, etc. Due to lower labor coats (and currency manipulation). Just focus on East Asia and stop the job bleeding. Threaten companies that continue to do that with tariff hits on their products. In my industry, USA-Canada region is typically 70 to 90% of their profit, but they are cutting jobs here while growing jobs in Asia.
 
#5,486
#5,486
Thunder Good-Oil said:
Try having an original thought instead of copy/pasting a ChatGPT reply.
Click to expand...

Yeah, one of the things that has become apparent about these low-effort AI responses is the tendency for the output to contain a lot of "may"/"could"/etc terminology. AI is good for summarizing without much effort, but thinking it's a slam-dunk debate winner is laughable.
 
#5,489
#5,489
MontyPython said:
Heh. Ohhhh I’ll do my best to keep up with your amazing economic analyses.

Just one thing…

Free trade is good. Sorry you don’t like it.

/end thread
Click to expand...

It’s not free trade when one side is state owned or sponsored entities that don’t adhere to the principles of capitalism.

Free trade isn’t fair when trading partners don’t open up their markets.

Tariffs aren’t used exclusively for fiscal reasons.

What’s wrong with using our leverage to create better opportunities for US citizens?

Our trading partners that are also defense allies were getting a lot of their free economic benefits by letting us establish military bases on their territory to counter Cold War communism. That is no longer much value to the US.

What do we do with our “friends” that import energy from Russia while we’re working toward peace with Ukraine? They’re funding Russia while we’re trying to use our economic power to pressure Russia to a resolution.

So what should we get in exchange for giving access to the most valuable customer base to businesses in the world? Nothing? Just let them chip away at eroding our economy? Let them limit supplying us with stuff that we really need and want from them?

Should we send in our military to correct bad behavior of our trading partners that are not our defense allies?

Should we do nothing while BRICS exists with the purpose of hurting our economy?

How do we reverse the soaring national debt while having trade deficits and a smaller manufacturing base?
 
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#5,490
#5,490
Thunder Good-Oil said:
It’s not free trade when one side is state owned or sponsored entities that don’t adhere to the principles of capitalism.

Free trade isn’t fair when trading partners don’t open up their markets.

Tariffs aren’t used exclusively for fiscal reasons.

What’s wrong with using our leverage to create better opportunities for US citizens?

Our trading partners that are also defense allies were getting a lot of their free economic benefits by letting us establish military bases on their territory to counter Cold War communism. That is no longer much value to the US.

What do we do with our “friends” that import energy from Russia while we’re working toward peace with Ukraine? They’re funding Russia while we’re trying to use our economic power to pressure Russia to a resolution.

So what should we get in exchange for giving access to the most valuable customer base to businesses in the world? Nothing? Just let them chip away at eroding our economy? Let them limit supplying us with stuff that we really need and want from them?

Should we send in our military to correct bad behavior of our trading partners that are not our defense allies?

Should we do nothing while BRICS exists with the purpose of hurting our economy?

How do we reverse the soaring national debt while having trade deficits and a smaller manufacturing base?
Click to expand...

A very socialist, anti-capitalist response.

Europe says Hi.

Go go gubment intervention!!!
 
#5,496
#5,496
NorthDallas40 said:
That isn’t sustainable. Automotive is a hugely competitive market. Also that is TGO’s go to excuse, that exporters will just eat it. Personally I find that laughable as that really implies to me they aren’t in a competitive market and can set their margins. For another example recently Ford stated they’ve paid over a billion in tariffs this year and the same article I believe stated they have the most domestic production.

From your article


Also we’ve beat this Vietnam single case to death. I’d like to see the growing list of defined deals resulting from these tariffs. We’ve had three and a half months now
Click to expand...
Here are a couple of interesting sites if you can crawl off the ledge for a little while.

tariffcheck.org

Tariff Check - Current Tariffs by Country & Products

An up-to-date list of American tariffs by country and products, updated daily. Your source for information on tariffs and trade policies.
tariffcheck.org tariffcheck.org
 
Last edited:
#5,498
#5,498
SpaceCoastVol said:
Here are a couple of interesting sites if you can crawl off the ledge for a little while.

tariffcheck.org

Tariff Check - Current Tariffs by Country & Products

An up-to-date list of American tariffs by country and products, updated daily. Your source for information on tariffs and trade policies.
tariffcheck.org tariffcheck.org
Click to expand...
Thanks for the link! So I read it twice to see if I might have missed it however I never saw any explicit statements pertaining to who pays the tariffs. All I could find is this
To the extent new tariffs bring in significant revenue, they could reduce federal deficits and debt. Tariff policies will also influence short- and long-run business decisions about investment and hiring, which may impact other tax collections and spending.
Click to expand...
So that’s all I could find. And it’s lip service at best. I’ve never challenged that tariffs increase federal revenues in fact I’d say that’s a fairly obvious given. What I have continually challenged is who are paying the tariffs and what are the longer term impacts on profit margins and inflation. I didn’t see that addressed anywhere in that article if I missed it please point it out to me and I’ll reread.

ETA I missed that these were two separate sites. Above I was referring to the second link. On reading the first link this statement explicitly states who pays the tariffs. Which is in agreement with what I’ve stated

Who pays a tariff?​

The company importing the goods always pays the tariff. But the cost often gets passed on to consumers and businesses.

And immediately following the above statement was this one addressing economic impact of tariffs.

How do tariffs affect the economy?​

The overall impact of tariffs on the economy is complex and depends on various factors, including the size and scope of the tariffs, the responsiveness of consumers and businesses, and the reactions of other countries. Economists generally agree that while tariffs might offer short-term benefits to specific domestic industries, they often lead to negative consequences for the broader economy in the long run.
 
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