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Yes, it is complicated, but, directionally, local companies that import and their American consumers, will see their prices go up. That’s the entire point of tariffs: To make imports more expensive to consumers than domestic alternatives.

Would you agree with Donald Trump saying that other nations will pay to export to America, even setting up an External Revenue Service, as if tariffs are a tax that other countries pay?

zhenya 10mo ago

Tariffs do what you propose if there is no premium left for selling into a market

But if the seller has been monetizing the premium (for itself or somewhere in its supplu chain), the seller will accept a new price until they cant

If you believe the current market is efficient then tariffs will make things more expensive.

If you believe the markets are inefficient, where sellers or their downstream supply chain, are enjoying some extra juice, things wont become more expensive.

The US has a lot of buying power and sellers, if they can afford it, will eat the tariff. If they cant things will get more expensive.

Consensus is the former, but Bessent and Lutnick believe the latter.

Time will tell.

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Discussion

Bud 10mo ago

I don’t think economic history looks kindly on trade wars but I can agree that time will tell. ☮️

zhenya 10mo ago

Indeed. id rather see trade wars than physical or hard cyber wars.

Humans have conflict and it needs to be resolved :angryhomer_sm: