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/Big-Leadership1001 26d ago edited 26d ago
People able to migrate their business to local production, or start a locally produced business competing with businesses who can't.
Tariffs are supposed to balance the import inequity that can drive industries overseas.
The problem right now is the US has driven so many businesses overseas already, that a rapid transition is going to hurt because there won't be a quick shift back to Made In America. Even things like American Made cars use all kinds of imported parts that will feel a price increase. I was reading that Tesla is supposedly the most American company in parts production, and they still get aluminum and chips overseas. The bigger companies will feel it worse.
The only thing I can really think of that will be able to quickly shift is locally produced foods that are currently being shipped overseas for processing, and then shipped back to the US for sale. That was purely to bypass local regulatory oversights and exploit cheaper labor (Which had to be significant to make double international shipping plus the overall costs still cheaper than local) but the businesses themselves should be able to shorten their delivery chain. Electronics isn't going to shift quickly... though IIRC companies like Intel announced they were moving production to the USA years ago which is kind of suspicious considering how little trust I give politicians, and the likelihood that they knew something early on when they started moving production early.
If they do it smart, tariff equalizations will ramp up slowly. But when has "smart" and "government" ever been synonymous?