Here’s how tariffs work (I import stuff from china)
- I find a Chinese manufacturer of widgets and negotiate with them. One of their first questions is, what incoterms do I require? I tell them EXW which makes their quotation the easiest to provide.
EXW means that once the goods are ready, I’ll send my shipping agent to go get them and bring them to me in my country.
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I call my agent and tell them to get the goods. They ask a lot of questions about the contents of the goods and figure out which HS code to use, which is a classification of what the goods are (such as bicycle tires, or unfinished lumber, or whatever).
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The agent prepares an assload of documentation for my shipment. They send a truck to the Chinese warehouse, get the stuff, load it into a container, take it to a shipyard. It’s loaded, boat moves to the US, boat is then unloaded, and my container is put into an inspection queue.
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The shipping agent forwards the documents about my container, which has not been released, to US customs. US customers decides if they want to manually inspect it or not, and then issues an invoice for the taxes. My agent calls me and says Mr. Nucleative, your customs bill is $9,845.50.
I pay them, they pay the US customs office. Customs releases my container.
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The truck is cleared to pick up my container and drive it to my warehouse.
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Now I unload and sell the goods to my customers.
Did you notice in step #4 that I paid the import tariffs? Now my cost to get the goods to my customers went way up. My margins are pretty thin, so I can’t do this business unless I charge my customers more or else I’m running a charity. Now, my customers have to pay me more. That money goes straight to the US government.
Hypothetically now it’s less unattractive to set up a factory in the USA, encouraging more local jobs. But damn, did you know we also need to import rubber, and metal, and machine parts, and cardboard for packaging, and all the other raw supplies either way? The local factories, if there are any, can probably not increase production to meet demand anyways, at least not in a month or two. Does anybody remember what happend when demand outstrips supply?
There is no rocket science here, just people learning from the wrong people.
This is exactly what happens. I can pay 100% tariff on solar panels that I can’t source locally at all, but we have a tariff to encourage a nonexistent industry to not flourish. And so I buy panels that China routes through SE Asia instead and add 95% extra cost to do that. So panels I sell customers are twice what they need to be and so they buy half as much and make up the difference with coal-fired electricity.
The wonderfulness that is the invisible hand…
Hey very interesting comment. I have a question: in which step do you normally pay the manufacturer in your example? Is this also handled via the agent?
The factory gets paid in step #1 (many can accept direct wire transfers or have Hong Kong/Singapore/ or even New York banks). Sometimes a deposit is made to start an order and the final amount is paid to release it from the factory after inspection.
There are agents who can handle funds on your behalf and when you work with a new factory or it is a super large order, it is common to use a service that will escrow the funds until the goods have been inspected and released.
Sometimes we even have our own staff monitor the assembly and packaging inside the factory to be sure the quality of parts we ordered are actually going into each piece. This is normal every day in Chinese factories, they know the game.
No he most likely knows. He’s gaslighting the people who are watching. What’s the simpler answer here? Well educated billionaire doesn’t know how tariffs work, or he’s lying through his teeth to protect his interests?
The rich are not better or smarter than the rest of us, and this bad breath in human form exemplifies that.
They aren’t smarter but they do have access to better teachers. And Tariffs are a very simple concept.
He knows most likely. Daddy doesn’t. Even if he did at one point, his mashed potato brains forgot it.
Eric Trump
demonstrates in 30 seconds hedoesn’t have a cluehow tariffs workHe’s been given lots of clues. He doesn’t understand them, but he has them.
You have to understand a clue before you can have it.
There is something deeply ironic about the US accusing China of flooding their country with illegal drugs. The next step is for China to demand reparations to all the fentanyl producers hurt by US law enforcement activity. Then they invade, force us to take the drugs and pay the reparations. OH, and they’re going to administer Hawaii for 99 years.
That would only be ironic if they did it to the UK.
Except China is doing exactly that, and it has been known for years, with multiple US federal agencies taking various steps to counteract it. E.g.:
https://www.brookings.edu/articles/chinas-role-in-the-fentanyl-crisis/
https://www.npr.org/2024/04/16/1244964595/fentanyl-china-precursor-overdose
China, specifically the CCP, has an obvious interest in weakening the US, and has demonstrated that they have no qualms with injuring people to achieve their ends (for further reading, look up Hong Kong, the Uygher people, and Tibet). (And no, before you think it, I’m not saying that getting poor white Americans addicted to opioids is equivalent to genocide of Uyghers.) We have a massive opioid crisis in the US, and it has been fueled in the last few years by fentanyl. Virtually all of the illicit opioids available here now contain fentanyl or are comprised entirely of fentanyl, and it’s routinely found contaminating other drugs.
It’s a problem that is recognized by both parties. To say “China is flooding the country with illegal drugs” is, yes a gross oversimplification of the problem, but it’s a simple narrative the Republicans can use to try to convince their voter base that tariffs are somehow a sensible course of action. If their voter base was wont to grasp and meaningfully contemplate complex geopolitical issues, they’d never have voted Republican in the first place.
Eric fails to understand who has the money to create the demand for illegal drugs. Also, a large portion of the illegal drug distribution is in the rural red counties because they lack law enforcement.
i’m not convinced that the trump boys actually want to stop drugs from entering the country
Well of course not their drugs. Same as how they don’t want to deport their undocumented housekeepers, or ban their mistresses abortions.
It’s hard to tell whether or not they truly don’t understand, or they do, and they’re just saying shit to rile up their base.
Not sure how much it matters either way, though. Consciously or not, it’s still the spread of misinformation.
It’s hard to tell whether or not they truly don’t understand, or they do, and they’re just saying shit to rile up their base.
Not sure how much it matters either way, though. Consciously or not, it’s still the spread of misinformation.
Nailed it.
Because it’s pretty difficult to both truly not understand and understand the same thing.
Removed by mod
That’s like rubbing shit on your face and telling a bully, “Okay tough guy! You want to punch me now?”
“I must apologize for Wimp-Lo, he is an idiot. We trained him wrong… As a joke.”
“Again with the squeaky shoes…”
You want to cut my hair for cheap? No, I am going to stab myself in the eye with the scissors. Haha, you lose.
Seriously though, tariffs can help (as part of a bigger strategy) to develop and protect important industries. You probably want a surgical approach in applying them, though.
If any of this actually happened (unlikely), I’d expect the US to start a very long slide to irrelevance.
Agreed. Trade agreements probably always need updating and tuning, etc…including things like tariffs.
Having donvict do it, though? That idiot is not one I’d want to be doing surgery of any kind - on trade agreements or otherwise. He’s a blustery moron.
We are going to cost your countries, your economies, we’re going to cost your businesses billions, hundreds of billions of dollars if you think you’re going to poison Americans
They realize American manufacturers and consumers pay the tariffs, right? Not the other countries.
I don’t think they do. But daddy donvict seems to also think that China is somehow ripping us off because “trade deficit”.
So I don’t think anyone in this crime family understands much of anything at all.
Plus it’s not like companies can turn things on a dime and create new facilities/train new people in response to these.
And who are they going to employ to do all this new work in America, with trump deporting the most capable labour pool ?
Either lots of high cost of living Americans or just a handful of them for maintenance on the robots doing the needed functions.
I’m not sure anyone in that family understands trade at all?
Donvict seems to think a trade deficit means China is ripping us off or something. They also seem to think that China is going to be paying tariffs, for example, when it is only going to mean that Americans are going to be paying for it. Not China. Slapping tariffs on goods coming from China, etc…is JUST ANOTHER TAX.
Do any of the dumbfucks in the Bircher/teabagger/maga/qanon, (whatever the fuck the crazies are calling themselves these days, it’s a constantly rotating set of labels, but it’s all basically the same set of stupid beliefs driven by feels rooted in racism) really understand that a tariff is a TAX? Again, these dipshits tried to start the “Tea party”, saying they were “taxed enough already” and I bet anything that only a very, very small percentage of them have made the connection. I bet most of the teabaggermaga dipshits think it’s gonna “make America great” or some shit because, donvict, their great white hope, is the one doing it to them. And doing it to them hard.
Isn’t Eric the one that got rushed to the hospital because he forgot how to breathe for a while?
To this day he still hasn’t figured out the square block doesn’t fit in the triangle hole.
The square hole… Everyone knows that.
Shit’s gonna be hilarious and tragic when a head of lettuce costs $12.99.
We’ll all look back longingly on Lucille’s $10 banana.
Arrested Development slowly becoming Seinfeld
Bet you anything the teabaggers never properly attribute it to their support for the kakistocracy, though.
These types seem to be determined to never learn a fucking thing.
Like moronic father. Like moronic son.
The shit apple doesn’t fall far from the shit tree.
Knock off the shit talk till we’re back in power, Randy
let the likker guide you
A smart approach would be to slowly dial stuff up so that manufacturers had, ya know, time to build and train for complex manufacturing plants in US.
But they’re not going to do that. The plants are where they are, they would take years to move, and American consumers will pay the new import taxes in the interim.
That’s all assuming Trump and Co wont buy up these factories and industries, and then inject them with federal stimulus money to ‘save america’
I’m sure in 12 months every major news station will be unhinged talking about one particular niche industry like baby diapers that is too important to let fail from these tariffs and it will be a complete coincidence that musk or kushner owns 90% of the domestic production.
They won’t just pay in the meantime, the local companies have very little reason to try to undercut foreign imports by a significant margin. Not enough manufacturing will come back to generate enough competition to drive down prices on most items.
