Won't Trump's tarrifs just put the prices up for everything Americans import , and add to inflation?

[Anonymous]

Won't that mean Americans will just pay more for the same product? Or they will just not buy those products which won't benefit anyone?

I dont understand how they will be beneficial.

[WindAtMyBack]

That is vastly over simplifying it.

First, the government, including the federal, state and local governments, are going to get their money one way or another. Tariffs are just another tax. If not tariffs, then it will be some other tax.

I'll also point out that the US has some of the lowest tariffs in the world. Some countries downright close their markets.

But yes, it will make goods more expensive, which is exactly what it is supposed to do. Companies and accountants go to great lengths to reduce the cost of their product. A tariff is just another cost, a big one. The companies, and the countries they come from do NOT want that. For high volume products they don't even want a few pennies added to the cost.

Trump doesn't want a trade war. The other countries want it even less than he does. The United States has the best hand. Trump knows that. All the other countries know that. And all the companies know that.

They do NOT want to lose the US market. They don't even want a reduction in the US market. So how do they avoid that? They either negotiate in any number of ways, or they move their companies or factories to the US.

Some countries might bluff by raising their own tariffs, but they can not win because the US has the best hand. Or they can do the opposite and lower their own tariffs. Some countries almost immediately offered to lower their own tariffs to zero. This makes US exports to those countries cheaper, which means more US exports and more US jobs.

Other countries offered some other kind of concession instead of a strictly financial concession.

Just about every country entered into negotiations. They do NOT want their goods to be more expensive in the US.

Most ( but not all ) of these other countries had higher tariffs than the US. Trump is just forcing them to the negotiating table to even the playing field.

Again, yes it will make things more expensive. That is exactly why it works. Nobody wants that, but the US is in the best bargaining position.

[contentious]

Nope. Importers still have to compete in the American market based on price. America has the second largest industrial base in the world, thus if foreign companies raise prices to compensate for tariff costs when they import goods to the USA they will lose market share to domestic companies who have a comparable product and a price advantage. In order to compete on an even playing field with domestic companies, it's in their interest to open factories in the USA to produce their good within the American market so that they do no lose market share to their competitors. Thus, companies that import products to the USA are likely to eat the cost of tariffs temporarily to maintain market share and establish US operations to manufacture goods which they plan to sell in the American market.

[contentious]

This is why you see massive investment commitments from foreign countries in every single trade deal that is being negotiated with Trump. They are already planning their new factories in the USA to avoid tariffs even though tariffs are part of the trade package.

[BonzoInBitburg]

Yes it will. All the additional costs incurred by importers will be passed on to the American consumer. Which will mean wages will have to increase resulting in American products pricing themselves out of the global marketplace. However, these tariffs will likely be overturned by the Supreme Court and the Executive Orders will be overturned and the power of implementing tariffs will be returned to Congress as per the Constitution. There is nothing to worry about since this is only temporary

[exitseven]

This is wjat the democrats are claiming. We are into month #4 of President Trump's tariff policies. Inflation continues to go down and the US has collected 150 billion dollars in tariffs. Foreign countries are absorbing the tariffs for the opportunity to do business in the United States.

[Asker]

That's not true though, inflation has risen for the second month

[exitseven]

Yes the core inflation rate has risen from 2.4% to 2,7% but energy, food and shelter which are excluded from the core inflation rate have all decreased.

[Asker]

That's another thing that isn't true, groceries ste more expensive

[exitseven]

I di not know what you are buying g but dairy, eggs, bread and beef are all less.

[Avicenna]

You know, you could answer that question by consulting the inflation statistics from Trump’s first and second terms.

The main idea behind the tariffs that got negotiated with the EU is that European companies will have greater incentives to produce in the US, which, not coincidentally, will increase supply. What happens to equilibrium prices when supply increases?

[qwerty2469]

No. They will punish importers bringing jobs back to America or huge amounts of cash. The businesses being tarrifed will eat those costs or lose the American market.

[kavakava]

Exactly

[Syntosi]

Even if that happens as you claim, that would still increase inflation and cost to the consumer.

[kavakava]

When the autopen printed money like a drunken monkey, that didn't increase inflation at all.

[DrPepper12]

They won't. MAGA doesn't understand reality

[seeyounexttuesday]

You’re pro corporate taxes, aren;’t you.

[Dargil]

They haven't yet.

[kavakava]

That's the point!

[msc545]

Yes.