Because the sellers can sell to another country without the tariff. American buyers have no alternative.
American buyers, however, can buy their products from anyone in the world. They can choose to buy domestically, or to import from countries that have lower tariffs.
Tariffs are taxes that locals pay on stuff imported from abroad.
If you tariff the Chinese one to $8, I will buy American.
China knows this, so they change the price on their screw driver (that actually costs them 0.75) accordingly, so that it can still be sold for $5, because they know there's a ceiling on what people will pay.
China doesn't have pure competition. The price of their goods isnt really related to cost by it more of what the buyer will pay.
What's next? Is Bloomberg going to be telling us that fluoridation is preventing tooth demineralization and not actually helping the Communists?
It appears to me that Trump sometimes uses the threat of tariffs to get him myself some emoluments. After that, many of his tariffs seem nonsensical
Tariffs are a double edged sword because the hurt purchasing power of consumers without really generating much money for the government.
The administration is going to focus on the fact that tariffs don't really drive inflation, but are going to miss the forest for the trees: prices won't go up because we all have become a little poorer.
Here's a thing with a punitive tariff on it. People won't buy it because the price went up too much. It is because prices went up that nobody buys it. (And we all become poorer because we can afford less, whether or not the price increase shows up in the inflation statistics.)
Tariffs have their own Laffer Curve just like income taxes do. Sure, you can set them so that the government gets zero (or close) revenue. But you don't have to. You can set them so that the government gets quite a bit of money. (Note well: I am not claiming that Trump is setting them there.)
If the Trump admin was serious about rebuilding the industrial base, they'd be providing subsidies and federal grants, not tariffs. They'd also be sucking money out of the economy by increasing the number and top marginal rates on the income tax and patching loopholes in the corporate tax code. At the same time, they'd be cutting taxes for the bottom 80% of America and providing healthcare and childcare subsidies.
Usually to bring big existing companies back either by choice or kicking and screaming about being weaned off unsustainably cheap labour...
As for new companies, other than the valley or DoD contracts what's new? Electric cars which aren't popular in a country that doesn't apply tax at the pump.
Ich lach mich kaputt
(I love it here, but “removing red tape”?!)
it's been reported that tariff collections have soared to the point that the budgeted spending is no longer in the red. this article is written in a confusing way, but your statement "not generating much money for the govt" appears to be incorrect
https://www.cnbc.com/2025/07/11/treasury-posts-unexpected-su...
Grover Norquist is smiling from the grave right now, watching this bipartisan anti-tax push.
More interesting to me is how Trump has managed to multiply the effects of tariffs by creating complete chaos (either on purpose or by accident.) The tariffs never turn out to be as high as they were marketed as. They are reapplied and dropped on alternate months. He makes the ending of tariffs contingent on actual concessions on other issues that the US is concerned about, but also makes them contingent on bullshit that no one would ever agree to.
All of this is creating the stress that causes people to restructure their supply chains, manufacturing, and logistics, at first to get the flexibility to adjust when Trump veers, but they can always see the alternative of cutting out imports at all which would frees them from any of that. The drama ("uncertainty") around tariffs is in and of itself a tariff (that will be seen in prices) that isn't being collected by the government, it's going into efforts by businesses to onshore and/or diversify their vendors. That onshoring is also going to raise consumer prices until it lowers them again.
That would be the price for demanding US labor standards be used in making US products, too. If we wanted to stop depending on foreign slave labor for cheap disposable shit, I don't know how we do that without tariffs. "Free trade" is an active enemy of labor rights.
Grover Norquist is smiling from the grave right now, watching this bipartisan anti-tax push.
Maybe calling these "import taxes" instead of "tarrifs" would help emphasize that to the average voter?
A tariff as you might recall is punitive for the ultra rich people who want to outsource American workers for practically slave labor in other countries. Make no mistake America paid for its entire finances for the first 120 years just fine without an income tax.
I would love to understand why you think it is punitive for the ultra rich.
value added taxes are paid on the profit made on the good, and are paid by the seller (because the buyer doesn't know what the profit is). value added taxes are basically corporate income taxes
If by 'ultra rich people' you mean the owners of capital, then no, not really. Those businesses hurt by tariffs will almost always raise prices until they are at least breaking even, otherwise they couldn't survive.
Yes, such business might lose some sales, so their 'ultra rich' owners might end up slightly less 'ultra rich', but don't forget that there will also be other businesses that will very much benefit from the tariffs (because market prices will go up when any part of the market is hit with tariffs), so their owners will become more wealthy.
So to sum up, with tariffs:
* some businesses may be hurt
* some businesses may be helped
* government gets more tax revenue
* consumers get higher prices
The 'ultra rich' don't care if food, clothing, cars, etc cost 5 or 10 or 20 percent more because they already have way more disposable income than they need. And even if they do take a hit, going from an annual income of $1M to $500k is not nearly as bad as going from $50k to $40k.
Apart from hurting some businesses and helping others, tariffs are no different than a regressive tax increase.
Taking huge chunks out of American opportunism (defunding science, health care, education, space, and so much else), blowing a huge chunk out of social welfare programs: that's going to cause amazing downgrades for most people. Paths to success closed, cost of getting by vastly higher. (All while walking over all over habeus corpus, while collecting & colating data of everyone in the homeland, while building concentration camps and tossing random hairdressers in international terrorism dungeons; denigrating the population generally, humiliating basic rights of man.)
But the plutocratic class doesn't really notice the change. The Global Elite E1 Barbarian class (of Michael O Church 3 ladders) doesn't notice or care. They stay about the same, but the sinking tide leaves many other boats grounded.
It sure seems like there's an international conspiracy of the very wealthy to screw over the land of opportunity right now. And there's 219+53 people in congess and two in the White House happily helping aid and abet this pushing opporunity off the cliff.
Fits perfectly hand in glove with the Network State ideology (which seeks to make who you know and what connections you've gathered define your environment) and the Christofascist ideology (which says religion should rule), both of which resent government as it is, which are part of the broader long campaign to "starve the beast". But to regionalize this situation to the US feels like it misses how the real nature of the E1 Global Barbarian Elite's desire to make clear their ascent over all others.
The EU has mastered the "global (often faceless) ruling class". No Brexit needed for that one.
Nothing rational about plutocracies or oligarchies.
But politicians will politic what can we do huh... Really feels like no side, opinion or thought of every day folks matters anywhere.
Our votes basically don't matter because our democracy is captured by lobbyists
The OP article is short on data and only has a few anecdotes. Like GM, who makes 50% of their US-sold cars outside of the US. And no mention of GM passing any price increases onto consumers.
Let's look at Japanese automakers. Japanese auto exports to the US declined 25% by value in May, but only 4% by volume. But only in the US - the price of autos exported to non-US destinations was flat. Toyota et al. are eating the cost of the tariffs, not passing them on.[1] Chart[2]
Bloomberg itself looked at PPI data recently and observed, "core goods were the main source of price pressures in May, suggesting that companies may be eating some of the added costs from tariffs." Core goods continue to be a source of disinflation in consumer prices but a source of persistent inflation in producer prices hints at pressure on corporate margins.
Core CPI continues to print lower than street expectations, for five consecutive months now. Far lower than what the Fed is concerned about, and certainly leagues lower than what the consumer expects (according to UMich study).
Contrary to popular wisdom, US inflation isn't soaring for the simple reason that costs are not being borne by domestic consumers.
[1]https://asia.nikkei.com/Business/Automobiles/Japan-auto-expo... [2]https://pbs.twimg.com/media/GuFMrZRW0AA7Rc0?format=png&name=...
Haven't a ton of the tariffs been delayed? To what extent have they actually been in effect?
The baseline 10% reciprocal tariff rate remains in effect for all, while many of the bigger country-specific tariffs are paused until Aug 1.
China has special tariffs that stack with that 10%: Section 301 (up to 25%) + Fentanyl tariff (20%).
In addition, worldwide tariffs impacting steel & aluminum (50%) as well as autos and auto parts (25%) are in effect.
And if those hints become reality, might prices rise to re-increase margins?
Do you make the same argument about the corporate income tax being absorbed by companies? Or do you assume that tax makes its way to consumers through price increases? What about increases in the minimum wage?
The tariffs are being paid by domestic companies, not foreign producers. There is literally no way for a foreign producer to pay a U.S. tariff as the tariff is charged to the importer before the good is released by Customs.
The impacts of the tariffs are domestic. If consumer prices are not increased, then profits, investment, or expenses (including salary, benefits, etc) will be decreased. The money has to come from somewhere inside the U.S.
This is the entire point of a tariff, historically and as expressed by this administration. It is not to source foreign tax revenue, it is to create intentional domestic pain as a means toward implementing a top-down industrial policy. “Make it here or I will hurt you” is the overt message from the President.
I've had suppliers from China lower their prices in the face of the tarrifs so that the total amount I pay after the tarrifs is only slightly higher. Which is going to be even more harmful if/when the tarrifs get removed as they're now undercutting American manufacturers even more than they were before.
however, paying the tariffs is essentially paying taxes and the government needs money and there’s nothing wrong with that. this one has the extra sword of helping our other Americans find work and increasing the likelihood that foreign goods will be purchased from allied nations and not totalitarian dictatorships with goals that might end in ww3 with the usa, while not completely cratering our economic system with full and immediate decoupling.
In the same way that laws against pumping your own gas help other Americans find work. It makes everyone else poorer instead of naturally created jobs which provide goods and services people want.
> increasing the likelihood that foreign goods will be purchased from allied nations and not totalitarian dictatorships
Citation needed, this round of tariffs have also fallen on our allies
Maybe those folks can be competitive within the US given the absurd tariffs. But will they be competitive on any global scale, with those additional headwinds? And if TACO or years pass and tariffs get rescinded, having that massive extra overhead on CapEx is not a good position to be in.
So no, you don't get re-industrialization, you get stagflation. It's idiocracy.
The next step is to work around tariffs where you can and need to which forces innovation and jobs on both sides of the border.
The rest of the world now knows that any promise made by the US government is not worth the paper it's signed on, and is planning accordingly.
But don't worry, the falling dollar will compensate.
If you want to incentive domestic reindustrialization, you do it with things like the Inflation Reduction Act, CHIPS act or the "Green New Deal" where congress lays out clear sets of rules in law with a mixture of tax incentives, loan programs and spending to give investors and corporations confidence to make decade-long commitments of capital to major projects.
Yes because of all the silicon fab plants popping up in the EU and Africa?...
Apple: $500M over four years including a facility in Houston opening next year
Chobani: $1.7B for new facilities in Idaho and NY
J&J: $55B over four years into new facilities, a 25% increase over previous
Honda: moving 100% of Civic hybrid hatchback production to the US
Hyundai: $25B over three years
IBM: $150B over five years
Merck: $1B for a new plant in Delaware
Nvidia: For this first time in history will be manufacturing chips in the US
Roche: $50B
TSMC: $165B
https://www.cbsnews.com/news/us-manufacturing-domestic-tarif...
Hedge your bets on these…
A lot of the investments listed by OP were also thanks to CHIPS and IRA, but the tariffs have acted as the stick to force the Capex realized from CHIPS and IRA remains in the US.
Even China has been leveraging a similar strategy to force it's own manufacturers like BYD and CATL or foreign manufacturers like Foxconn to keep bleeding edge manufacturing within China by using a mix of export controls and revoking passports of Chinese nationals abroad.
> TSMC’s
That was Foxconn, not TSMC.
Also, Foxconn is an assembler, not a high value manufacturer.
Given that, I question how many of these are actually caused by the tariffs.
For automotive and electronics, a lot of it was a result of CHIPS and IRA related subsidizes
That said, the tariffs do help incentivize domestic production instead of taking advantage of subsidizes from CHIPS+IRA and then comingling with SKUs from abroad.
Think of the Biden-era CHIPS+IRA as the carrot, and the Trump associated tariffs and export controls as the stick.
Further to that, 80% of the economy is services or otherwise has nothing to do with imports. Tariffs are not affecting haircuts or yoga classes or bank fees.
Seems to me like tariffs are being used as a convenient excuse.
You might argue that the retail channel can eat the difference, but it doesn't make sense to make the same absolute margin on goods that are subject to volatile tariff policies. It makes it hard to predict how many units will sell, how much stock to maintain, and creates a big risk that any units on shelves will suddenly be devalued when these tariffs are rescinded.
lay people have a broken view of what goes into a price and a profit, thinking that a "fair" profit should be some "reasonable" percentage. It's just not how it works, it works on multiplied rates. the financial markets exist to give large companies working capital. if the companies need double the working capital, the shareholders/bankers want double the returns. the alternative would be you getting a letter saying "hey, the returns on your retirement account are going to be halved, think of it like your retirement account is now half the size"
I’m sure you can find short term examples of this, but in the long run consumer products tend towards a pretty “fair” price given the cost of retail, marketing, shipping, returns etc - all of which are things that do not anywhere near double when you pay a tariff. Your fat margins are someone else’s opportunity; walk around Walmart or Home Depot or Amazon and you won’t find a lot of fat margins. So no, you won’t double retail prices.
The price of food is based on the price of domestic produce and the price of imports. If taxes are levied on food imports it will raise the mean price of food. As yoga instructors need food to do their job (in fact, they need it to live), they would have to raise their prices.
It’s a pernicious problem exacerbated by conservative media that’s 24 hour xenophobia and jingoism. It’s not just the US look to your countrymen dear reader!
That is what you test-taking, credential hustlers do not understand.
Real-world experience teaches you how you survived. Education teaches you how others failed. You need both to avoid old mistakes and make new ones.
It’s not about credential hustling, it’s about having more tools in the toolbox.
Also, obvious political bias.
I can say from my supply chain experience, which I can’t really disclose, other than to say it’s substantial in my world, I directly negotiate purchases from Asia (various regions) of between $25 million to $75 million per year.
If those statements are in conflict with my various NDAs then it was a typo.
Moving on, since the tariffs have hit, the deals I’ve negotiated have had substantial pre tariff discounts. For example, a widget that used to cost me $219k before tariff now costs me $159k plus tariff.
My takeaway is yes, consumers are going to pay more as the post tariff price is higher than the pre tariff price. BUT the suppliers are taking haircuts, and they are getting more aggressive with eachother. The Chinese government doesn’t want to directly say they are going to further subsidize production costs in China due to American tariffs, but some of this is happening and may accelerate as demand further drops. Just my humble opinion.
Now the tax is being raised on companies who import goods made overseas, but companies who make their product in the US don’t have to pay the tax.
If you are usually the type of person that supports taxing the rich and taxing large businesses, shouldn’t tariffs be something that you generally are in favor of?
Not to somehow make foreign firms pay more or whatever, how would that work?
China's dominance of the EV market is a recent case in point. China went from having approximately zero percent of the EV market in 2008 to completely dominating by the end of 2024 with an end to end vertically integrated EV manufacturing capability and a definite technological edge in some of the most critical areas. It took a decade plus of stringent protection for the fledgling EV industry and a couple of hundred billion dollars in subsidies, but they have ensured their dominance of the EV industry for a generation at the very least.
The US on the other hard, applied tariffs in an indiscriminate, chaotic manner(no one sane is going to invest anything when US policy depends on the whim of the president) and applied it even to raw materials which our remaining industries desperately need.
Also, instead of creating sound industrial policy, we seem to be hell bent on destroying the very foundations of US dominance in many industries by actively attacking science and technology in the country, from gutting scientifically focused agencies to waging a vicious war on universities and foreign students.
All of this for what? To add 5 trillion to our debt by passing a tax cut that predominantly benefits corporations and billionaires? To make the MAGA base feel good about making life miserable for 'the others'? This truly feels like the beginning of the end for the American empire or even the American experiment.
You can never count out the American capability for reinvention, but at some point, patches and refactorings stop working and you need a rewrite.
Tariffs are the antithesis of supply side strategy. Yet tariffs, which increase costs for suppliers like any other tax, are derided by the same people as “regressive” as if they will always be born 100% by the consumer. Supposedly, tariffs cannot possibly benefit the working class on any time scale.
At least one of these positions must be at least partly wrong. Which is it?
Regardless, within the current system (which is not based on theory and based on reality), we combine these elements, and neither seem to directly benefit certain industries depending on who you're looking at. If it does, these policies may not benefit everyone.
mensetmanusman•10h ago
Consumers getting Nd:YAG lasers from China below cost are also weakening the laser supply chain elsewhere. Tariffs are a type of response to these situations.
SideburnsOfDoom•10h ago
"If you look at page 1 of the tariff handbook, it says: Don't tariff inputs. It's the simplest way to make it harder—more expensive—for Americans to do business. Any factory around the world can get the steel, copper, and aluminum it needs without paying a 50% upcharge, except an American factory."
https://bsky.app/profile/justinwolfers.bsky.social/post/3lud...
cyanydeez•10h ago
As such, the way in which they're used can easily be disguished between "hidden tax" and "design to affect production location".
These tariffs are, as a whole, about adding a hidden tax.
afavour•10h ago
Tariffs need to be applied surgically and... they are not
plorkyeran•10h ago
SideburnsOfDoom•10h ago
dragontamer•10h ago
But those areas don't have anywhere close to the land of Brazil, Columbia or Vietnam.
--------
Another example: bauxite ore (Australia is our chief partner in that IIRC). USA somehow is missing the raw ore for Aluminum despite nearly everyone else in the world having it.
There's lots of things we can't make
SideburnsOfDoom•10h ago
Something not quite the same, but parallel is happening with Florida oranges:
> Only 12m boxes of oranges will have been produced in Florida by the end of this year (2024), ... The figure is 33% lower than a year ago, and less than 5% of the 2004 harvest of 242m boxes.
> It is also dwarfed by the 378m boxes expected to be produced this year in Brazil
https://www.theguardian.com/us-news/2024/dec/22/florida-oran...
xnx•9h ago
SideburnsOfDoom•9h ago
And tariffs won't change that.
xnx•9h ago
croes•10h ago
At the end of the day the prices still rise just not as much as with the tariffs but higher than foreign made without tariffs.
cosmicgadget•10h ago
Melonololoti•10h ago
If you mean that we exploit Chinese people by not giving them the proper salary, living standard and retirement fund, yeah true
But parallel to that, automatization has reached a level we never had before.
I don't think tarifs would lead to more capital in USA in the right/expected pockets.