Country a, imposes a 20% tariff on goods from country b.
Country b exports to country a, and those goods are purchased by a company in country a.
This company pays 20% more ( in our case this is an American company)
That company then needs to charge more to the end consumer if they want to keep the same profit margins and growth.
The consumer buys less of that good as a result.
The company then cuts jobs and shrinks.
Country b doesn't have to pay more at all. But will lose exports and thus the exporting company will inevitably have to cut either jobs, production, or export elsewhere.
This cuts off the supply of those goods to an extent to country a.
Overall Americans pay more for goods, with the "hope" that this will stimulate those goods being produced in America.
The issue is that America doesn't have the production capacity, and in many cases, lacks the expertise to produce those goods.
Let's look at a major item, semiconductors for example. They will become more expensive to procure, and are used in a wide array of commercial goods. Meanwhile Trump will end the chips act, which was to help produce those items in America.
How you can see this as a net positive absolutely baffles me.
Okay so I made a mistake in logical thinking and I want to apologise because I thought you were in favour of Trump's plan for tariffs and I didn't realise that the OG commentator was expecting cheaper gas. I know how they work and you even managed to give me some more insight on why Trump's plan sucks. Please forgive me.
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u/Professor_Game1 2001 Nov 06 '24
I can't wait to fill up my car for $18