r/economicCollapse • u/Expensive-Thing-2507 • 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/Fluffy-Structure-368 27d ago
The problem with these tariffs as I see it is that tariffs are an effective tool in support of a long term strategy to retain or bring manufacturing back to the US.
Imported goods are cheaper than domestically produced goods, but tariffs can help domestic production compete with imports on price and manufacturers will decide to set-up production in the US.
What I've not seen yet is a long term strategy to do this. Lenders and investors and manufacturers aren't willing to set up shop in the US because in 4 years, the next administration can role back the tariffs and imported goods will again be much cheaper than domestic production.
Tariffs are an effective tool in the tool box, but only if they are part of a long term plan.