how do tariffs on exports work. The R’s are saying increased tariffs won’t cause manufacturers/distributors to pass the costs onto consumers here in the US. I was wondering if American manufacturers follow that same model. Are goods exported to foreign countries outside the US subject to tariffs, and are those tariffs absorbed, or passed onto foreign consumers?
In: Economics
that’s them telling you what you want to hear not reality.
Tariffs are imposed on imports, not exports. The entire concept of them is to make it more costly to bring things into the country vs. doing business with a producer who is already in the country.
In a simple ELI5, say you sell hats wholesale for $10. But I could just buy them from China for $8. A $2/hat tariff would equalize the cost and there would be no point in importing them from China anymore so I’d buy them from you instead.
Now, ignoring reality……..this “doesn’t increase costs to US consumers” because this price hike only applies to foreign goods. Back to reality…….if you shrink the market by reducing the imports of Chinese hats, it puts more burden on US suppliers and THAT will mean that costs go up.
Further (again the intent of tariffs being reducing imports) that cuts into revenues of the import/export business and logistics companies (who may be US based) so now they raise their rates on domestic shipping to offset it and it costs you more to make your hats……….on top of the increasing burden of meeting your demand.
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