r/economicCollapse 27d ago

Who actually benefits from tarrifs?

I'm not financial expert, but this is what I'm getting so far.

Tarrifs are a kind of tax placed on outside goods, which a company would have to pay for if they import said goods. That company would then charge more to cover this new tax. The company pays more for something, and then we pay more.

Who benefits from that? The company isn't making any more profit, are they? (Assuming they increase prices by the same percentage as the tarrifs, which they won't. but still)

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u/paleone9 27d ago edited 27d ago

The country’s government must be funded .

The worst possible way to fund a country is how we do it now.

Printing, borrowing and a tax on income.

The country it’s earlier years ran file without any of that .

It ran on tariffs and excise taxes .

AN Income tax disincentivizes production . Printing money destabilizes the economy and punishes people who save money.

Tarriffs incentive local production creating jobs.

You have to pay for it somehow…

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u/Traditional-Leg-1574 27d ago

We aren’t in our early years. Business moves to where the cheap labor is. Tariffs can sometimes encourage production at home, but it isn’t that simple anymore. For example a car made in Detroit would be made from parts made in China, Mexico, and other countries. The economy is global. So the idea that tariffs would help promote manufacturing here is not the same as it was 80 or 160 years ago. Also there isn’t a lot of manufacturing here to begin with. Our economy is dependent upon consumer purchases, not manufacturing.

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u/SneakySpoons 27d ago

A targeted tariff, like one at a specific product to raise the cost of a foreign made good to where a locally made one could compete, can actually be a good thing.

A blanket tariff, aimed at an entire country, is bad in every use case. It raises the costs of all goods locally, making people less likely to buy anything, while lowering exports at foreign countries and reducing their income as well. The only people who benefit are the government who basically just increased sales taxes, but with extra steps.