Some say Trump doesn't understand how tariffs work. That's not true.

[JohnnyRingo]

Last edited Tue Jan 28, 2025, 10:39 AM - Edit history (1)

Not true when we look at the big picture.

A 25% tariff would indeed bring money into the country. Trump says he will hire officials for a newly formed "Department of External Revenue" to collect and funnel those funds directly into the treasury. A surplus that can finance a new round of tax cuts for his friends.

However, while some companies may eventually move some minimum wage jobs here, the combined expense of tariffs and labor costs will be handed to the American consumer in higher prices, like a sales tax. The end result will be American workers paying an additional tax to fund a cut for Elon, thereby shifting more of the tax burden downhill to us. Most of us spend nearly 95% of our income just to survive.

That's the most basic republican idea I've heard since Reagan was president.

[CousinIT]

1. Yes it STILL shifts the cost of billionaire tax cuts onto the rest of us - it's a consumer tax

We pay before it ever ends up in any fucking "Dept of External Revenue."

So everything will be MUCH more expensive with that, including deportations/labor costs.

This shows that the goddamned plutocracy - SHitler and his billionaires don't give a rat's ass about the rest of us. They'll destroy our ability even to survive to get more tax cuts for their greedy ass selves.

[Wounded Bear]

2. Yeah, the argument about "who pays" the tariffs is a smokescreen...

In the end consumers pay the price of tariffs. Sometimes tariffs can be useful if they are targeted and limited. Blanket tariffs on large swaths of imports are just stupid.

[doc03]

3. The Republicans have been talking about lower income Americans paying no income

tax for years even getting EIC. They have been pushing for a national sales tax or a flat tax for decades. Tariffs
are a sales tax that most people will not even realize they are paying. Apparently, tariffs are something the president
can raise or lower at his will while raising the income tax takes legislation.

[JohnnyRingo]

6. That's a very keen observation.

You are correct that republicans would love to find a way to tax social safety net income, whether it's what's left of welfare or SNAP benefits.
A sales tax that takes a circulative route would be just the ticket. Once again, we've been had.

[ProfessorGAC]

4. How Does It Bring Money Into The Coubtry

Perhaps you were referring to money into the government. But, from a macro view the same number of dollars are available to spend on the same value of goods. So, fewer goods get sold.
There is only a weak argument that tariffs increase monetary velocity (I disagree it applies any leverage on that), so the $ are the same, the importer pays the tariff, passes that on to the consumer, and the economy is unchanged for the positive.
Yes, it increases revenues to the government but it's not an uninterrupted stream, so doesn't really pay for tax cuts.
Ergo, no he does not know how tariffs work.

[Wiz Imp]

13. Not to mention that Tariffs have been in place in the US since the very beginning of this country

and collected without a special department to do the collection. Creating an "External Revenue Service" would be creating more bureaucracy and wasting even more money on something that is already being done by the Federal government without needing some fake "special" department.

[brush]

5. So when are you going to change your OP headline?

It's pretty obvious he doesn't understand that American consumers pay tariffs.

[MadameButterfly]

7. I don't think he cares whether American consumers pay tarriffs

because he doesn't care about AMerican consumers.
He has to say the other countries are paying to get people to vote for him, but whether it is true is not relevant to him.
Who knows what he actually believes.

But I think other posters have hit on the relevant point: the tarriff's collected by the government will fund billionare tax cuts, Crypto reserve, and mass deportations, while taxing consumers without legislation to do so.

[brush]

8. I for one still think posting truth matters. American consumers pay tafiffs.

[Bernardo de La Paz]

10. Plus one for always posting truth. Reality is inevitable (un-evadable, unavoidable). . . . . . nt

[MadameButterfly]

11. Yes, this is critical

Trump is unteachable or doesnt care
But we must educate voters who need to be able to connect the dots when the inflation happens

[JohnnyRingo]

14. That's the whole idea, but it doesn't end there.

People forget that money will be collected in the tariffs from the exporting country and added to our treasury. If China wants to sell us microchips, they'll have to pay 25% of the chip's value.

The fact that we will pay that 25% in increased prices is what make it a sales tax. The only winner is the federal govt that collects and disburses the money into tax cuts for the wealthy.

You're correct that American consumers will pay for the tariffs, but it doesn't end there. That money will end up in Trump's hands, not China.

[brush]

15. Exporting countries don't pay tariffs. American importers do.

And American importers pass that cost on to us, Americans who buy their products with raised prices that cause inflation. Importers do that to recoup the tariff money they paid as they're not in business to lose money.

What about this do you not understand?

Tell the real truthn.

[dickthegrouch]

16. IMHO calling tariffs a sales tax doesn't help

Sure they increase the final price of the product, but no-one actually pays that increase as a tax. It doesn’t show up on my receipt as a tax. The seller doesn’t pay it directly to the government as a tax.
People disbelieve the message when it’s not presented in a believable way.
I think it would be better to say “similar to a tax” or “as if a new tax had been added”.
And let’s not forget that because the base price has increased the actual tax paid as sales tax will increase too.

[JohnnyRingo]

12. And I believe he knows exactly what those tariffs do.

If not him, it's his advisors who came up with a way to tax us to pay for his "American Billionaires First" agenda.
You think he doesn't understand that consumers will pay for the tariffs, but I see it as fundamental to the plan that shifts the tax burden down to us. Nothing in Washington DC happens by chance or coincidence.

Too many underestimate to ability of this administration to increase their wealth on our backs. Stop assuming they're stupid.
How do you see it as anything but a poor tax?

[Bernardo de La Paz]

9. Tariffs never increase purchasing. Less purchasing equals fewer jobs. Higher price means fewer units

(You also seem to confuse government revenue with cross-border income.)

Fewer sales people and customers on car lots, for a glib example.

But fewer manufacturing jobs too, because so many "Made in USA" units use 10 to 30+% foreign parts. Especially anything marked "Assembled in USA". Hence higher price for those units and less unit volume and fewer jobs.

That is all without considering that tariffs result in counter-tariffs which means fewer exports which means fewer jobs.

Further, that is not considering the effects of immigration clampdown. Disruptions in the labour market reduces production and reduces exports because of lower production. That especially includes food.

Any positive effects (increased manufacturing capacity inside US) will be years down the road. Labour, demand, and export reductions will be felt quickly.

tRump does not understand tariffs