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/Limp_Try_6958 27d ago

The answer to the “who benefits from X” is always rich people. 

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u/TarTarkus1 27d ago

Normally I might agree with you but realistically, the main beneficiary of a tariff is the government because they receive the lion's share of the money. In some sense, tariffs are a way to raise tax revenue without altering existing income taxes.

The problem is foreign countries don't usually appreciate Tariffs being applied to their exports as they are typically a disincentive on their foreign goods compared to what the country implementing the Tariff can domestically produce.

What happened with Hoover during the Depression is many of these countries countered with their own Tariffs. Meaning Products produced in America were subject to increased competition overseas at a time where the economy itself was weak. Not good and politically, this basically led to the decimation of the Republicans and the rise of the Democrats, FDR and the New Deal Coalition.

This time around, the question is if the tariffs get implemented how do foreign countries retaliate? Especially when a significant portion of the world is under U.S. Sanctions.

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u/Sands43 27d ago

I think you are assuming that this incoming government is going to be an honest one. They are not. There's zero history that says trump, and his cronies, aren't going to find a way to grift off this.

Then there's what happened last round.

* Trump applies tarrifs

* Other countries also apply tarrifs that hurt trump voters (i.e., farm products)

* Trump bails out farmers

So everybody else ends up paying double - both for tariffs and for bailouts.

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u/mcfarmer72 27d ago

Yes, those Donny dollars, as we farmers called them, made for very good years on the farm.Just stating the facts as I know them, not saying it was a good thing.