General Question

janbb's avatar

Can someone explain to me who benefits from the tariffs?

Asked by janbb (63324points) 2 days ago

The market is down, consumer prices will go up. What is Trump thinking by starting a trade war with our closest allies? (And oops, I forgot to buy avocados today.)

Putting this in General so if it becomes a pissing match, you will be flagged.

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72 Answers

Forever_Free's avatar

Domestic industries who do not utilize any goods imported to make their product benefit by being able to sell more of their product as compared to companies that import pieces and parts that make up their items.

Typically it is only the US Congress that can impose tariffs. However, a president can impose tariffs in cases involving national security or economic emergencies. In my mind, the tariffs that are being imposed are not for the later reasons and will cause more harm than good.

jca2's avatar

I heard on the news this morning that he put a 30 day pause on the tariffs to Mexico because Mexico is sending 10,000 troops to the border to try to curb the flow of Fentanyl.

I just saw a headline somewhere that says he says Canada is mistaken about the tariffs to their country, but i didn’t click on it so I am not sure what the details are with that.

janbb's avatar

Yes, seeing that Trump walked back the tariffs in a deal with Mexico I think Trump is using his bullying tactic to get other countries to cave in to what he wants. It’s not diplomacy and I think it will bite America in the ass.

Pandora's avatar

Maybe some small manufacturing companies in the US that may be able to out bid lower international product prices and some farmer who may not be able to increase the price of their products but just keep it under 25 percent increase of Canada or Mexico. But who loses is the consumer big time. Jobs will also be lost for companies who move a lot of international product, like car manufacturing jobs.

jca2's avatar

The thing about manufacturing in the US is that if there’s no factory right now to manufacture something, let’s say plastic food containers, it’s not going to happen overnight that some business people will secure capital, obtain real estate for the factory, buy equipment and hire employees, and start making those plastic containers. That may take a year or two, if the investors even want to do that, so therefore, who’s paying in the meantime?

Caravanfan's avatar

Nobody. Everybody suffers.

gorillapaws's avatar

Putin

@jca2 ”...it’s not going to happen overnight that some business people will secure capital, obtain real estate for the factory, buy equipment and hire employees, and start making those plastic containers. That may take a year or two”

Here’s the thing, the payback on all of that capital outlay will be amortized over many years. If there’s only a competitive price advantage for perhaps the last 2 years of Trump’s presidency before someone else comes into power and undoes the Tariffs (or even Trump himself, on a whim) then it will still be unprofitable to do. That means the factory will never be built. Markets like stability and predictability.

jca2's avatar

The news said that Trump can make exceptions for certain industries which is where the deal making is going to come in – deal making with his friends in high places, probably giving him kickbacks to be on the exemption list.

jca2's avatar

I don’t see how this is in line with his promise to bring down inflation.

Who gets fucked? The little guy. The average Joe, who goes to work every day, or is retired. It’s just going to be a big fucking.

jca2's avatar

Stock market is down, too. Another fucking for us.

raum's avatar

Trump.

He wins putting on a big show for his followers about making Amurica great again. Paying more for goods is patriotic now.

And he wins again because a starving country is much easier to control.

Zaku's avatar

Enemies and economic rivals of the USA benefit.

(Trump is a transparent agent of Putin, who wants as much discord, chaos, and misfortune in the US and NATO as possible, as quickly as possible.)

raum's avatar

“Show me a nation that cannot feed itself, and I’ll show you a nation in chaos.”

Pat Roberts, Former Senate Agriculture Committee chair 2015

Google food instability and conflict. Trump’s goal is to break down the government. If there’s martial law, his power becomes unchecked.

Trump is dumb. But all joking aside, he’s not dumb enough to believe releasing the dams in California would help the fires in SoCal.

He’s making gestures to placate his sheep. While punishing political enemies. And sabatoging one of the largest agriculture industries in the country.

RocketGuy's avatar

These new tariffs harm the relationships with the associated trading partners. That weakens American trade => benefits America’s competitors e.g. Russia and China.
Notice that he’s tariffing countries to the North, South, East of us? Looking at West of us too? That is isolating the US from the world on purpose.

flutherother's avatar

I don’t think anyone benefits from tariffs. They push up prices, increase inflation, spark trade wars and destabilise economies. Trump is using them as a threat rather than a calculated economic policy but it is a dangerous game all the same.

janbb's avatar

In a related action, they’re canceling most foreign aid which also harms America’s standing in the world, hurts people all over, and will only strengthen China as it rushes in to fill the gaps.

KNOWITALL's avatar

Other countries have taken advantage of unfair deals for too long while our debt goes up. He is trying to make it a more fair deal for Americans.
Granted it may hurt for a minute but if he prevails so does the country as a whole.

Caravanfan's avatar

@KNOWITALL Enjoy your higher gas prices and hope you don’t need to buy a car any time in the near future.

Response moderated (Flame-Bait)
ragingloli's avatar

They completely bought into the nonsensical propaganda.
Hey, genius! If the colonies actually produced anything worth a damn, other countries might actually want to buy it.
And maybe you would be, if your corporate overlords had not so “wisely” chosen to outsource manufacturing to quasi-slave-labour countries for cost savings.

JLeslie's avatar

The people who vote for Trump thinks it is a good idea, so he benefits with votes along with the Republican party.

He is using it to get border countries to help control the border similar to not trading with countries when we don’t approve of what they are doing.

It might help encourage production in the US.

Countries that lay heavy tariffs on the US and then we don’t do the same, it could be argued some of those countries are taking advantage of us.

Those are possible “positives,”

It seems to me this could all be done without so much of a threatening posture.

gorillapaws's avatar

@KNOWITALL “Other countries have taken advantage of unfair deals for too long while our debt goes up”

A TRADE DEFICIT ISN’T DEBT. Every dollar “lost” in trade is exactly made up for in foreign investment. It’s a mathematical requirement that will always be true just like 1 + 1 = 2 because it’s a balanced equation. If we were to have a positive trade, that would necessarily mean the US dollar would be weaker and we’d have a net negative in foreign investment, i.e. we would invest more in other countries than other countries would invest in the US. That would mean the US would be poorer, the dollar would be weaker, the stock market would be lower, and yes we’d sell more to others than we buy because our shitty dollar makes it unaffordable to import stuff and makes our stuff cheap.

KNOWITALL's avatar

@JLeslie Ford and several others already announced they’re coming back to the US.

@gorillapaws I referred to our nation debt. Please dont start ‘schooling’ me again, not interested.

gorillapaws's avatar

@KNOWITALL So what the fuck are you talking about then? why mention the debt in the same context of tariffs?

seawulf575's avatar

A tariff is nothing more than an import duty (tax) on goods coming in. It can be on all goods coming in from a country or only certain ones. What that does is cause the cost of those products made in the other country go up if they are to be sold in the US. As a result, the goods or services can cost more than other similar products made in the US. As a result, sales go down and profits in the taxed country go down. In some cases the government of that country will crank out subsidies to try keeping their own industry afloat.

The overall reaction is either less taxes being brought in by the other country (as sales from their own companies go down) or increased spending in the form of subsidies. This results in the value of that country’s money to go down leading to inflation. The country issuing the tariffs gets an increase in tax from the sales of the goods or services albeit at the cost to the consumer.

There are several goals of tariffs, depending on how they are used or what they are looking to accomplish. In the case of Mexico and Canada, one of the big goals was getting those countries to help stop the flow of illegal immigrants and drugs into our country. Both countries, when asked, basically told Trump to piss off. So the tariffs were announced.
Mexico suddenly agreed to dispatch 10,000 troops to our border to help stop the flow. This will put a pause on the tariffs for 30 days, during which a better trade deal can be reached along more normal lines. Canada is opening talks as well to try heading off the tariffs. The value of the Canadian dollar and the Mexican Peso both tanked yesterday on the announcement that the tariffs were going into effect tonight at midnight.

China is a slightly different matter. There are many things we are looking for from China. One is for them to stop the flow of the chemicals used to make Fentanyl out of their country. Another is to try to get them to move some of their manufacturing to the US where we get the benefit of jobs being created. This could benefit both sides considerably. Japan opened plants in the US to make Hondas and Toyotas and found they could turn a tidy profit by not having to ship them and pay tariffs to get them into the country.

KNOWITALL's avatar

@gorillapaws
To reduce that number, the government would need to raise revenues or cut spending. Tariffs, which are taxes that U.S. consumers pay on imported goods, are one example of how governments can raise revenues.
CSIS.org

JLeslie's avatar

Meanwhile, I want to build a garage onto my house and the price went up significantly now that the tariffs are being imposed on Canada. I am screwed that I did not finalize the contract a few months ago. The threat of Trump tariffs put me in an awful spot financially. I am not sure what we are going to do. I am kicking myself for not making a decision a long time ago.

Ia m surprised Trump’s real estate friends didn’t try to persuade him to exempt lumber and other building materials. expect housing prices to increase if something does not change. Trump’s friends maybe like that since they can sell at a high if they bought up a lot of real estate during covid. Right now a lot of prices flattened out in 2023 and 2024.

janbb's avatar

@JLeslie Yes, it has been pointed out that tariffs on building materials will make it much harder and more expensive for Los Angelenos to rebuild homes destroyed by the fires.

jca2's avatar

On the news, they’re now in the supermarket showing products that are from Mexico. Cereals, Colgate Palmolive products, avocados, now 1.99 going up 30 percent will be 2.60, peppers, Oreos, Mallomars, plus all kinds of beer – Modelo, Corona.

JLeslie's avatar

In Florida we get a lot of fresh produce from Mexico, although a large part of our produce is local thank goodness, but I think US producers and retailers will just raise their prices rather than keep them low if the general public believes prices will go up due to tariffs. The corporations always take advantage of the public’s beliefs.

jca2's avatar

The tariffs on Canada are now paused for 30 days, as of 5:15 pm Monday.

gorillapaws's avatar

@KNOWITALL Ok, I see where you’re going, so you want the mathematical equivalent of a massive flat tax to subsidize the planned tax cuts for billionaires? The thing is, tariffs don’t actually generate that much revenue. People just stop buying the thing in a trade war. Demand plummets, people get laid off, that causes a recession which further decreases demand.

To fix the deficit, all they have to do is reverse the tax cuts for billionaires… Under the Republican Eisenhower during the height of the US post-war boom the top marginal tax rate on the richest Americans was over 90%.

Caravanfan's avatar

@gorillapaws And to top it off billionaires don’t care about the tariffs because they can just afford to pay the 20% upcharge.

My following comment is based upon my being a free trader so take it for what that’s worth. There is never a good economic reason to impose a tariff. You can make an exception if there is a nascent domestic industry that is producing something for local consumption and they are competing with cheap low cost imports. In that case tariffs are still bad, but at least they make some economic sense. The government protects the industry making the widgets until they can “stand on their own two feet” as it were. Then you remove the tariff.

Not that it ever happens that way of course.

gorillapaws's avatar

@Caravanfan Billionaires don’t pay any tariffs on purchases made abroad. So when Bezos buys a half billion dollar yacht in the Netherlands, the US doesn’t get a penny. In fact, it actually weakens the dollar because he’s exchanging dollars for Euros to facilitate the transaction. That’s the part the trickle-downers never talk about: “Trickle-OUT economics” by the 0.01%.

MAGA voters are just uneducated, lack basic reasoning skills, are too stupid to realize that Trump is working against their interests or are getting so filthy rich they’re laughing at all of the gullible suckers that are helping them fleece the American public blind.

SQUEEKY2's avatar

You know only 43lbs of fentanyl have crossed the Canadian border during this crisis ,and the migrants usually are coming north to get out of the states.
And if it’s Canada’s job to stop those is it not the states job to stop the flow of black market firearms that are streaming north?
Sorry Janbb now to answer these tariffs are only to punish Mexico,and Canada that are following the free trade agreement that Trump agreed to and signed off on his last term.
The stockmarkets are already going down, and now ole Felon 47 is threatening a trade war with Europe , can anyone say DEPRESSION I knew you could .

Caravanfan's avatar

@gorillapaws I used to watch this trashy reality TV series called Below Deck about life among the staff of a rich person’s yacht. Then I realized that I was being an idiot so I stopped.

janbb's avatar

Apparently, he has paused them both for 30 days after getting some concessions from each. Bullying is not the way to conduct foreign relations. I read an interesting article by a Poli Sci professor that said that one of Trump’s failings is that he sees transactions only as resulting in a winner and a loser and political negotiations succeed when both parties come up with positive results.

RocketGuy's avatar

The various countries re-gifted concessions they made to Biden months ago in 2024. Their plans were already in play. Trump just gets to parade them around as shiny new toys in 2025. Clever, them foreigners.

janbb's avatar

@RocketGuy Good to hear. I was afraid they were bending the knee although as you say, he will take all the credit.

mazingerz88's avatar

I shot the tariff
But I did not shoot no deficit

Pandora's avatar

@janbb I think the real reason he paused it is because his meme coin and other bit coins took a big dive today. He thought it wouldn’t touch him, but it did.

RocketGuy's avatar

The stock market tanked, which pissed off his rich friends. Recovered soon after tariffs were “delayed”. Crisis averted. yay

chyna's avatar

What trump fails to mention is that he made a consession to Mexico also. He agreed to ramp up efforts to prevent weapons trafficking from the US to Mexico.

Here

seawulf575's avatar

@chyna And that is how negotiations go. That is something we should have been doing long ago. After Obama’s stupidity, we should have made every effort to stop guns going south.

chyna's avatar

Thank you for mansplaining.
I have no idea how I’ve lived so long without you explaining things to me.

Forever_Free's avatar

Negotiations via tariffs show he simply has not a diplomatic bone in his body or vocabulary.
“Hi, I am a bully, Do this or else”

gorillapaws's avatar

@seawulf575 “we should have made every effort to stop guns going south.”

“Every effort” except of course restricting gun sales, closing loopholes and sensible gun control legislation.

ragingloli's avatar

@Forever_Free
If you think about it, a Bank Robber holding a shotgun to the teller’s head is only negotiating for some money.

jca2's avatar

It’s just a give and take, @ragingloli, don’tcha know?

janbb's avatar

@gorillapaws Yeah, we have to stop guns going to other countries so we can use them right here! ~

seawulf575's avatar

@gorillapaws OR, in the case of Obama, selling them to the Cartels so we can “track” them.

janbb's avatar

@seawulf575 I think the Obama theme has been beaten to death. Time to drop it, IMHO.

Response moderated (Unhelpful)
seawulf575's avatar

@janbb I wasn’t the one that brought up guns going to Mexico. One of the biggest scandals we had in this country was Fast and Furious where the government (under Obama) sold illegal guns so they could track who bought them and then they lost track of about 1300 of them. It was part of Project Gunnrunner which was started to try curbing the sale of illegal guns into Mexico. Irony at its finest. One of these ended up killing border agent Brian Terry. So if the idea of blocking guns from going to Mexico, this is right on topic. I refuse to apologize if you are offended by facts.

SQUEEKY2's avatar

Wulfie your god seems to think it’s Canada’s, and Mexico’s responsibility to keep illegals and drugs out of your country, if that is what you and felon47 believe ,then isn’t it the states responsibility to keep the black market firearms out of ours, and if not why not??

seawulf575's avatar

@SQUEEKY2 Since the drugs are coming into our country from Canada and Mexico, asking them for help is not irrational. Being told effectively to pound sand is arrogance and the un-neighborly thing to do. So we got the drama that played out.

Stopping guns going to Mexico and Canada are indeed something the US could help with. How many guns go illegally into Canada? I know Mexico asked us to help with the problem on their side and Trump readily agreed. We have laws about black market weapons in the US. Our law enforcement actively seeks to stop them. I just gave an example of our government doing this the wrong way, but at least they were trying to find the paths of travel for the guns. So they do take these things seriously and are more than willing to help out.

Now compare that with caravans of illegal immigrants coming through Mexico. Mexico has their own immigration laws, yet they wave these folks on through because they aren’t staying in Mexico. How is that even enforcing their immigration laws? They are contributing to the problem. And with that problem comes the drugs and the human trafficking, etc. Canada isn’t on the same scale as Mexico, that is for sure. But the number of people entering our country from Canada basically doubled in just one year. So people are starting to look at Canada as a possible way of sneaking into the US. Also drugs like fentanyl have started coming across that border.

seawulf575's avatar

@SQUEEKY2 I got a “right backatcha” one. You were all up in arms with tariffs being brought against Canada by the US. You tried arguing that tariffs only hurt the US citizens and not Canadian citizens, you felt it was wrong for them to be used against Canada (which is a weird contradiction from your first claim) and that as neighbors, we shouldn’t do that to each other. Yet Canada has tariffs against the US. Shouldn’t Canada drop all tariffs against the US, and if not why not?

Tropical_Willie's avatar

@seawulf575 You keep following the lies from Trump. Tariffs are TAXES paid for by the RECEIVING party !

Canada can sell to other countries !

Therefore Tariffs on Canadian goods are bad for USA because it will cause inflation . . . and are not paid for by the Canadian company.

RocketGuy's avatar

Tariffs are useful for protecting locally made goods. If another country is dumping super cheap products to push out local products, tariffs are justified esp. if their govt. is providing financial support to sell them at below cost of production. Makes the products have cost equity vs local products. Of course that prevents people from buying those products at lower cost.

A problem occurs when the goods are not made locally. Then tariffs will increase cost to the buyers since they have no alternative local choices.

seawulf575's avatar

@Tropical_Willie I understand that. Go back up and look at my first answer. But they also result in increased prices on the goods/services from the country to which the tariffs were assigned. That frequently results in the companies providing those goods/services not being able to get as many sales in the other country. So they have to lower their prices to keep competitive in the target marketplace. Either that or they take the loss of income or the government pays the companies back with subsidies (effectively paying the tariff). And time after time, our good buddy @SQUEEKY2 has whined about how horrible it is for Trump to lay tariffs on the good neighbors to the north. So he is arguing both sides of the same thing. He has ignored the part where Canada laid tariffs on the USA.

jca2's avatar

I see on Facebook, friends in Canada are reporting that they’re gung ho now about buying products made in Canada.

janbb's avatar

@jca2 Yes, I’ve read they are removing liquor made in the USA from stores and don’t plan to import more.

SQUEEKY2's avatar

Oh for fucks sake Wulfie the tariffs Canada laid against the states were retaliatory due to the tariffs your hero put on us and you know that, and we halted ours when ole felon47 halted his.

ragingloli's avatar

@SQUEEKY2 He’s the violent abuser that get’s mad when his victim fights back.

Response moderated (Unhelpful)
seawulf575's avatar

@SQUEEKY2 Of for fuck’s sake! But there were already tariffs in place. Why is that? Isn’t that just the same thing you were whining about Trump?

Response moderated (Unhelpful)
Response moderated (Personal Attack)
RocketGuy's avatar

Unless they have comparable products, then sales of American products will drop. No “inflation” on the homegrown products.

Response moderated (Unhelpful)
SQUEEKY2's avatar

Wulfie,You’re right Canada tariffs on American goods would result in inflation up here, like American Tariffs on Canadian goods would result in inflation in the states.
At least on the tariffed goods.

seawulf575's avatar

So your government is just trying to hurt its citizenry? How fascist of them! So let me get this straight: you go on rants about how stupid Trump is for putting tariffs on Canada because it only hurts the American people. And Trudeau’s response is then to put tariffs on the US to show he can hurt his people too?

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