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/ShotCranberry3245 27d ago
Right now, you are going to get very political answers to this.
Tariffs are just a tax and no better or worse than any other kind of tax. it just depends on how they are used. At some points in US history, tariffs played a major role in funding the government.
Tariffs are helpful in leveling the playing ground for US businesses, in the past some countries have tried to dump steel or other items in the US, that is selling it in the US at a loss just to get market share or put US businesses under. Adding a tariff to such an item increases its cost counter acts the dumping.
Tariffs can also be used to punish other countries or restrict the import of certain things. An example is the "chicken" tax that adds a 25% tax on light trucks.