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
The point of a tariff is to make a foreign product cost more to US consumers so they will buy US-made goods instead, without US producers needing to lower their prices to match foreign goods.
US consumers will either have to pay the cost of the tariff when they buy those foreign goods (or higher prices on US goods made using foreign supplies or parts), or the importer will give up importing them entirely because not enough people will pay the higher price – which means US consumers must pay for US-made goods at a higher prices instead.
One way or the other, US consumers pay for tariffs imposed on foreign products. The whole point of a tariff is to keep prices high to benefit US businesses that are competing with foreign ones that charger lower prices.
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