Competition is… well about competitive. A unilateral Tariff hurts everyone equally.
So if China was selling batteries to the US at $4
Taiwan was selling them at $3.90
You slap a $2 tarrif on both countries.
China raises the price to $6 to compensate, Taiwan to $5.90, Both countries make the same profit per battery sold. Unless there happens to be a US company that can make the batteries at $5 (not likely as we don’t currently have the infrastructure, and a lot of products are dependent on natural resources that we just don’t have).
China raises the price to $6 to compensate, Taiwan to $5.90
Not quite. It’s not the foreigners who pay the tariffs, it’s the locals. The tariff is charged at customs when the product enters the country and the people paying that are the people doing the importing. Tariffs don’t bring more money into the country, they just penalize local people who import goods from overseas. It’s a tax. Back when Republicans were consistent they hated all taxes, heh.
From the point of view of the local consumer it makes no difference - the price rises unless there is a locally made substitute they can buy instead.
USA
It’s like spitting out of a moving car. It’s just going to hit you in the face.
Was going to say, why wouldn’t it be the USA.
Competition is… well about competitive. A unilateral Tariff hurts everyone equally.
So if China was selling batteries to the US at $4
Taiwan was selling them at $3.90
You slap a $2 tarrif on both countries.
China raises the price to $6 to compensate, Taiwan to $5.90, Both countries make the same profit per battery sold. Unless there happens to be a US company that can make the batteries at $5 (not likely as we don’t currently have the infrastructure, and a lot of products are dependent on natural resources that we just don’t have).
Not quite. It’s not the foreigners who pay the tariffs, it’s the locals. The tariff is charged at customs when the product enters the country and the people paying that are the people doing the importing. Tariffs don’t bring more money into the country, they just penalize local people who import goods from overseas. It’s a tax. Back when Republicans were consistent they hated all taxes, heh.
From the point of view of the local consumer it makes no difference - the price rises unless there is a locally made substitute they can buy instead.
The price rises even if there’s a locally made substitute, because odds are that it costs more to make locally, and the price floor is now higher, too
Even if it doesn’t cost more to make it locally you can just hike your prices anyway if your only competitors have tariffs applied.
Next question.
“Why would China do this?”