RE: LeoThread 2025-01-30 00:36
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Tariffs do not directly tax foreign exporters. They simply raise the cost of foreign goods for consumers. However, this added cost is optional as consumers can choose to buy domestic products, if they exist, at a lower cost.
The impact on foreign nations is that they bear the cost of tariffs through lower exports. This is the leverage that tariffs offer to negotiate more favorable terms for domestic exports rather than one-sided tariffs on American goods.
In short, we can expect to pay more for imports unless foreign nations can agree to equitable tariffs on our exports.
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The 2nd paragraph is key to understanding how consumers are affected by tariffs. Consumers pay directly at point-of-sale, but nations pay indirectly through opportunities denied them to sell their goods in a foreign market.
Key phrase here is "if they exist". And even if they do, prices will be higher than what you were paying before. The point being, from a consumer point of view, a tariff is effectively just another consumer tax like a sales tax.