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Trump claims 'billions of dollars are pouring into the coffers of the USA' because of his tariffs, b

OlNate said:
It gets better. The only way that the big auto manufacturers, and all their sub tier supply partners, will be able to exist will be if they replace more and more of their workforce with robotics. Ford and GM discontinuing big chunks of their catalog isn't just a response to market trends. It also enables them to have fewer parts to produce, meaning fewer process to capture, meaning robotic solutions are easier to get to, and they can get way more mileage out of them.
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Interesting point I hadn't thought of. Thanks.
 
The tariff is charged upon entry and is paid by the importer not the exporter. We have already notified all our customers that tariffs will be passed on to them. The billions Trump speaks of are coming out of our pockets, China is not paying a cent.
 
Mycroft said:
The OP stated: "China" is not being "charged" billions! Americans are being taxed billions!

So the answer is NOT necessarily yes. You are correct that "someone" is paying for the tariff. Unless you can show that the prices the American consumer is paying has, in fact, increased then it is not the Americans being "taxed billions".
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Correct. Tariffs do not necessarily increase the price of tariffed goods.

But if these tariffs are not raising the price of foriegn made cars, then they are a failure because the point of the tariff is to raise the price of foreign made cars so that American made cars sell better, resulting in more jobs for Americans

So either the tariffs are being paid by americans --which is what Trump wants-- or they are a failure
 
sangha said:
Maybe I am missing something but the chart shows that more cars are sold in China than the US
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Yes, it does. But only slightly more, nothing like twice the number.
 
sangha said:
Correct. Tariffs do not necessarily increase the price of tariffed goods.

But if these tariffs are not raising the price of foriegn made cars, then they are a failure because the point of the tariff is to raise the price of foreign made cars so that American made cars sell better, resulting in more jobs for Americans

So either the tariffs are being paid by americans --which is what Trump wants-- or they are a failure
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Not true.

Tariffs also raise the cost of production. If that cost is not being passed on to the buyer, then the producer is losing money. That could cause them to go out of business or, maybe, move their business to somewhere that is more favorable...like to the US.

If that happens, the tariffs are not a failure even though the consumer isn't paying for it.

This gets back to my original statement about who is paying the billions Trump talked about depending on whether the price the consumer pays increases or not.
 
Mycroft said:
Not true.

Tariffs also raise the cost of production.
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Nonsense. Tariffs on imports --which is what we are discussing-- do not raise the cost of production.


Again, the point of the tariffs is to create jobs in the US, by making foriegn produced goods more expensive, If they FAIL to make those goods more expensive, they have FAILED

If that cost is not being passed on to the buyer, then the producer is losing money. That could cause them to go out of business or, maybe, move their business to somewhere that is more favorable...like to the US.
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In that case, China going out of business and moving factories to the US proves that the tariffs are working......



In Trumpworld. In reality, Chinas auto producers are still in business and China has not moved any factories to the US
 
trouble13 said:
Has there been a price increase for consumers?

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trouble13 said:
That's absolutely another aspect to factor in if we are evaluating if the tariffs have been beneficial or not. That however isn't the question you asked. We dont know who is paying those billions without more data.

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It may be technically correct to say we may not have easily available to absolutely prove who paid the tax at this time. But based upon historical data, I think it's foolhardy to believe otherwise from what I stated.

One of my links (Fortune) showed Ford claiming they will be laying-off employees in response to the tariffs. In the other (Newsweek), analysts predict:

As 10 percent levies on everything from tires and brake pads to engines and batteries take hold, analysts couldn't predict exactly how much prices would increase, only that prices definitely would rise.
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Take from it what you will. But if you think G.M. and Ford are going to eat steel and other tariffs, you're kidding yourself.
 
Bullseye said:
In a way you're correct. The price of imported goods in just increased to cover the tariff. Just like increasing corporate taxes - the corporation does pay that tax, it's just added into the price the consumer pays.

However, the idea behind the tariff is to convince consumers to NOT buy Chinese goods but American which creates economic activity here which creates tax income.
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You are indeed correct. Essentially, the government is trying to influence my buying habits. They're taxing me if I don't buy what they want me to buy.
 
Mycroft said:
Whether you are wrong or not depends on if US consumers are indeed picking up the cost. Have prices for Chinese goods that are affected by the tariffs being passed on?
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LOL So you believe China will pick up the costs of the 25% tariff on all goods that Trump has promised? I do know that the increased costs of aluminum and steel are being passed on to consumers. As a result of tariffs and subsidies Americans pay billions more yearly than other consumers for goods containing sugar, steel or aluminium. Is that how we make America great? On the backs of American consumers?

July's U.S. CPI (Consumer Price Index) report showed core inflation accelerated to a 2.4% annual rate, up from 2.3% in June, as businesses may have started to pass on rising costs of industrial metals and fuels. Price hikes ahead of potential tariffs could have also contributed to the rise in core CPI. However, prices of consumer services, including shelter, which tend to be more sensitive to the domestic business cycle, continued to trend sideways.
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https://www.businessinsider.com/metal-tariffs-are-pushing-up-us-consumer-prices-2018-8
 
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JasperL said:
The answer is yes, but it's incomplete. Like any tax on a corporation, and a tariff operates as a tax, the 'incidence' will fall on owners/investors, employees, and/or customers, and the amount paid by each of those interests....depends.

What's not in question is that someone in those groups is/are paying the tax. Maybe if the corporation is foreign owned, the tax isn't being paid by "Americans" but investors in China or whatever, but that's not going to be typical.

Furthermore, since the tax is direct and on the cost of inputs, we can assume that over time the tax will be imbedded in prices, i.e. raise prices. Otherwise we have to assume that corporations for some reason, all of them subject to this input tax, will voluntarily accept lower profits, indefinitely, which seems....unlikely.
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The bolded & underlined is the whole enchilada, here.

Some Trump supporters, as is often the case, will make claims of: "You can't 100% unequivocally prove what you say".

Well yeah, that may be true - though in time in some industries we will have hard data. But what their statement is designed to nullify, is conclusions that are reasonable and likely. It's a logic trap, where they try to justify their argument based upon extremely unlikely scenarios, which have little to do with reality.

Their positions are theoretically argumental, rather than reasonably suppositional. It's more akin to a philosophy class, than of economics.
 
iguanaman said:
LOL So you believe China will pick up the costs of the 25% tariff on all goods that Trump has promised? I do know that the increased costs of aluminum and steel are being passed on to consumers. As a result of tariffs and subsidies Americans pay billions more yearly than other consumers for goods containing sugar, steel or aluminium. Is that how we make America great? On the backs of American consumers?



https://www.businessinsider.com/metal-tariffs-are-pushing-up-us-consumer-prices-2018-8
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And let's just remember one thing: When the next economic downturn occurs, and it will, those inflationary effects of additional taxes on Americans will remain. Then the downturn turns into a double-whammy for the American people, with both lower income and higher prices.
 
Chomsky said:
It may be technically correct to say we may not have easily available to absolutely prove who paid the tax at this time. But based upon historical data, I think it's foolhardy to believe otherwise from what I stated.

One of my links (Fortune) showed Ford claiming they will be laying-off employees in response to the tariffs. In the other (Newsweek), analysts predict:



Take from it what you will. But if you think G.M. and Ford are going to eat steel and other tariffs, you're kidding yourself.
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What I think is that companies will charge as much as the market will bear. That however is not as simpistic as saying if manufacturing costs go up, product cost will increase. It's not that black and white.

I personally go through what your asking about. I own a small business (refrigeration contractor). I deal with cost fluctuations on a regular basis. My operating costs are not static. The thing is my prices are set at a level that is competitive to the other contractors in my area. If I raise my prices when they dont, I lose customers. Instead I operate on a tighter profit margin under the hope that my costs will go down or long term my compatetiors will raise their prices and I can too.

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trouble13 said:
What I think is that companies will charge as much as the market will bear. That however is not as simpistic as saying if manufacturing costs go up, product cost will increase. It's not that black and white.

I personally go through what your asking about. I own a small business (refrigeration contractor). I deal with cost fluctuations on a regular basis. My operating costs are not static. The thing is my prices are set at a level that is competitive to the other contractors in my area. If I raise my prices when they dont, I lose customers. Instead I operate on a tighter profit margin under the hope that my costs will go down or long term my compatetiors will raise their prices and I can too.

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That's all true of course, but then you're just eating the cost increases instead of your customers, and that means less profit, lower wages, something, which filters through when you buy fewer things, or don't save and invest, or don't hire that new person, or they get no raises because if they do you'll lose money on those jobs. And if the cost increases are on inputs, eventually you're all in the boat where you either raise prices or quit the business.
 
JasperL said:
That's all true of course, but then you're just eating the cost increases instead of your customers, and that means less profit, lower wages, something, which filters through when you buy fewer things, or don't save and invest, or don't hire that new person, or they get no raises because if they do you'll lose money on those jobs. And if the cost increases are on inputs, eventually you're all in the boat where you either raise prices or quit the business.
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Yup that's pretty much it in a nutshell. So when you look at something like tariffs. The short term effect may be the company is taking less profit. I'm not saying they are. I'm saying we need more data to determine the answer to his question. If I were to guess, the answer is most likely a combination of all those things, at least for now. If the tariffs are in place long term, it will increase consumer pricing.

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