| ▲ | tjbiddle 7 hours ago | |
It's more nuanced than that. Tariffs do not always 100% immediately get passed on to buyer. If there's a $100 product you'd like to purchase and there's a 100% tariff, it won't be $200. That product was made abroad, let's for $20. So the tariff should be $20, not $100. The US-based owner will go to the supplier, say they're getting squeezed by tariffs and first they'll try to see what they can do to recategorize the tariff, or negotiate with their supplier to absorb some of the expense. Let's say that got it down to $15. The owner still doesn't want to increase costs by 15%, so they'll hold off for a while and absorb, and then eventually maybe increase 5-10 and absorb further; perhaps eventually going the full stretch - maybe not. | ||
| ▲ | bruce511 5 hours ago | parent [-] | |
Squeezing the supplier may work in the short term, especially for goods already ordered, and produced, which can't be sold elsewhere. But in the short-medium term it creates uncertainty for the supplier. (The on / off / on nature of these tariffs doesn't help.) For some goods this means suppliers will develop new markets, or will adjust prices up for American purchasers. For example, say I have an orange farm. Say I have been selling to the US for ages. Simple, reliable sale, no need to look for other customers. This year there's turmoil. We take a hit because US buyers need a discount (or might cancel the order.) OK, I'll take the hit. But I'll also put out feelers for other markets for next years crop. Maybe Saudia Arabia is looking. Maybe Europe is looking. Next year, do I develop those relationships, or do I reserve my crop for my US buyer? Tariffs are not necessarily the problem. They are an important long-term tool used to support local production. Uncertainty though is a huge problem- it's easier to sell elsewhere. | ||