this post was submitted on 17 Mar 2025
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Leopards Ate My Face
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Even if it were a tax paid by foreign companies, what difference does it make? They would just increase the prices the goods are sold at.
So, lets say, a smartphone that is priced at $1000:
With the 20% tariff in place:
If the Chinese conpanies pay the $200 per device, they just sell each phone at $1200 to the US importer.
If the US importers pay the $200 per device, similarily, they would tack on the $200 (on top of the usual markups), making it $1200 per phone.
There is zero difference, the end consumer always foots the bill.
This is so simple to understand, how are people this stupid
Wouldn't refunding the amount of the tariff to the customer fix this? Ignoring the very important diplomatic and retaliation tariffs which makes the whole post unusable for real life
Where am I wrong here ?
In your scenario how is the local made $100 item bought at $80? Where is a $20 refund paid from? You are double spending it on both imported and local goods
In the scenario local good is still worth $100 but given that you refund all good by the amount added by the tariff later, you have $20 refunded (not really $20 as i tried to show previously, but
$20 x total_tariff / total_amount_of_good_bought_locally_and_imported
, so somewhere between $80 and $100 net for local production and between $100 and $120 for imported good, depending on the ratioimport/import+localprod