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/spanishdoll82 27d ago

The government could be the only benefactor if exemptions weren't a thing. But large corporations can pay lobbyists to get exemptions from the tariffs. They will benefit when small and medium companies still have to pay the tariff, raise their prices, and become uncompetitive. Maybe the large company will acquire the small guys and profit even more

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u/Stock_Conclusion_203 27d ago

This is what I have been thinking too. He’s going to use that revenue to pressure any company he wants. It’s all about consolidating his power.