Understanding Tariffs.

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BigBoy99

BigBoy99

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My understanding of tariffs is like this. An importer is currently purchasing an item for certain amount who them sells it the consumer. If a 25% tariff is imposed, the importer increases his price to the consumer who will pay an additional 25% for the item. What happens to the money used to pay the 25%? Does the importer get to keep the 25% or are they required to pay that 25% to the Government? Is this a program to increase the wealth of the importers or tax scheme where the consumers are paying the extra cost of the item and that money goes to the Gov’t.?

Perhaps there are some economics majors who can explain how all of this talk of imposing tariffs really works?
 
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They need us more than we need them, bottom line.
There's absolutely zero that we can't produce, enriching American workers in the end, making us totally self-reliant.
it's just another way to get other countries to fall in line and stop taking advantage of us. Eventually, they will all fall in suit.
Eggs are high due to the bird flue, but I paid around $3.00 a dozen yesterday, so don't take the bait.
 
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I agree with HEMI 100%. When used correctly, tariffs are simply a tool. All the bleeding heart Karen’s will tell you otherwise. As far as it being a tax on consumer, if you don’t want to pay it. Don’t buy the product. And that is what Canada and Mexico are afraid of. You won’t buy it. Don’t you wish all taxes were optional?
 
H Richard said:
It's an incentive for us to manufacture those items here in the U.S.
Click to expand...

That's certainly part of it. But another part is an inducement for Canada and Mexico to make the effort to stop illegal immigration and fentanyl from coming across their borders into the US. It's already working...Mexico has caved and will be sending their military to the border for a pause in the tariffs.

Now...it's Canada's turn.

It's great to have a muscular foreign and economic policy again.
 
The tariff is paid to the US government by the importer or the exporter, depending on the terms of the sale. Also, bear in mind that much of what we import is component parts so it ends up being a 25% increase in cost of maybe 5% or 10% of the final cost. In many cases, the exporter, in an effort to maintain the business, absorbs some portion of the tariff by means of a price cut. I was buying Chinese stainless pipe during the last round of tariffs with China. Our net pricing did not change that dramatically. Will there be some price effect, certainly. If you were to buy a fully completed product out of Canada or Mexico, directly, you would certainly see the impact of that price change. I guess the price of tequila may go up, and some produce items. Most of us will have a hard time identifying the difference.
 
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Tariffs are also negotiating tools to leverage other countries into acting in ways that are more desireable, and not necessarily tied to the economy. For instance Mexico has just agreed to send 10,000 troops to the border to reduce drug trafficking, and our tariff has been suspended, at least temporarily.
 
I'm not sure that I buy into the whole tariff scenario . Canada in particular is a strong ally of the USA . We share the longest undefended border in the world and it just doesn't make sense to me to be doing this to some of our long time friends and allies.
I'm not sure of the statistics but I can't imagine that much fentanyl is flowing from our northern border .
Also if fentanyl is flowing into our country ...which it is ... it's because there's such a demand for it .
We likely need to be looking after ourselves and cleaning up the issues we have here in our own country regarding illegal drug use first and not blaming our problems on our friends and neighbors...north or south.
 
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Answers to the OP's questions are reminiscent of the old allegory of the blind men describing an elephant by feel. What you think it is depends a lot on which part you have grabbed onto.

Long term there ain't no such thing as a free lunch--the gummint collects the tariff, but somebody down the line picks up the tab.
 
Empe said:
I'm not sure that I buy into the whole tariff scenario . Canada in particular is a strong ally of the USA . We share the longest undefended border in the world and it just doesn't make sense to me to be doing this to some of our long time friends and allies.
I'm not sure of the statistics but I can't imagine that much fentanyl is flowing from our northern border .
Also if fentanyl is flowing into our country ...which it is ... it's because there's such a demand for it .
We likely need to be looking after ourselves and cleaning up the issues we have here in our own country regarding illegal drug use first and not blaming our problems on our friends and neighbors...north or south.
Click to expand...

There is a trade deficit. Canada sells way more to the US than they buy. Crude oil can skew the numbers a bit but the US Govt feels as though they are propping up (subsidizing) Canada. They simply want Canada to do more. Especially with the military protection Canada enjoys by being a border country.
 
The awakening

Tariffs are great bargaining exercises. Also
Tariffs are a great attention getter for
countries that won’t come online.

What is not mentioned is Tariffs the U.S pays.
There’s more than one story as to what’s
going on.

Even if Tariffs took effect, markets will adjust.
There are different producers, consumers seek
substitute products, price decreases, and other
Companies will take advantage of others
misfortune, people want in on American markets.

Recall what happened to Bud Light. They
didn’t have a tariff but similar
consequences.
 
Canadian tariffs will affect different regions in different ways. Some not so much, some will really get bitten. My state gets all its natural gas, 80% of its electricity and most of its heating oil from Canada...so the 10% tariff on energy will hurt. Most of this countries framing lumber comes from Canada, so that will hurt. Sure...we have trees...but we also have an endless supply of enviro's, bureaucrat's and lawyers that will all fight to protect them. I don't think the tariffs will happen; Canada will fold like Mexico just did. But anyone who thinks the tariffs on Canada won't affect them is sadly mistaken.
 
Bald1 said:
There is a trade deficit. Canada sells way more to the US than they buy. Crude oil can skew the numbers a bit but the US Govt feels as though they are propping up (subsidizing) Canada. They simply want Canada to do more. Especially with the military protection Canada enjoys by being a border country.
Click to expand...

Well that makes a certain amount of sense ..I guess .
I freely admit I know very little on the subject but I just can't see needling and prodding our good friends and allies .
But ...we will see what goes on and hopefully I'll learn something along the way.
 
dockmurgw said:
Canadian tariffs will affect different regions in different ways. Some not so much, some will really get bitten. My state gets all its natural gas, 80% of its electricity and most of its heating oil from Canada...so the 10% tariff on energy will hurt. Most of this countries framing lumber comes from Canada, so that will hurt. Sure...we have trees...but we also have an endless supply of enviro's, bureaucrat's and lawyers that will all fight to protect them. I don't think the tariffs will happen; Canada will fold like Mexico just did. But anyone who thinks the tariffs on Canada won't affect them is sadly mistaken.
Click to expand...

The naivete on this topic is breathtaking. I laughed out loud when I read the comment that we can produce all we need and be totally self-reliant.

There are minerals and agricultural products we need and use that we don't have in this country...we must get them from elsewhere. And other countries are in the same boat. I don't know any nation on earth that is totally self-sufficient.

There's another benefit of free trade that hasn't been mentioned here: It promotes peace between nations. You're a lot less likely to go to war with trading partners than you are with countries where you have no relationship.
 
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