I keep hearing all the Chamber of Commerce controlled pundits, the Dems, and the MSM keep bitching and moaning over the “terrible” Tariffs that Trump has employed against China and Mexico. All I hear is how they will only lead to what is tantamount to a tax on on the American consumer. What these people as well as the “economists” they sight FAIL to realize is two things. One the American consumer has ALREADY been being taxed and ripped off by the countries like China and Mexico. Do they not factor in that the trade imbalances with these countries IS tantamount to a tax on us?
If we cannot get true fair and equitable trade with these countries, are we not at their mercy already? Do they not already manipulate the price we must pay for goods if they unfairly artificially manipulate their currency to WEAKEN our buying power? What about the theft of OUR intellectual property? does THAT pass on a cost to US consumers? You bet your sweet petunia they all do. So that is part one of the fallacy.
Part two is even EASIER to understand. The common misnomer and conventional thought is that placing a 5% tariff on a good AUTOMATICALLY means that that cost is past on to us the consumer. Well yes and NO. Yes if it is an exclusive, rare, or hard to replace item. Fo example, uranium ONLY comes from certain areas, is VERY rare, and is costly to mine and export thanks to regulations and the danger. In this example ANY tariff on that good would necessarily be passed on to the buyer, therby giving the seller leverage against any punitive tariffs.
Now, lets move on the the FALLACY. Suppose that the 5% tariff was on TV’s made in Mexico. An automatic cost pass off to the US consumer would be STUPID and HARM the manufacturer. How? Simple, the one thing we the US consumers have that BLUNT all tariff price increases here, and something the pundits and MSM will NEVER tell you, is that in America we have CHOICE. We import goods like TV’s from MANY different countries, like Japan, Taiwan, Singapore, and Malaysia. Most goods bought here are the same way. If a Mexico manufacturer were to pass on the 5% tariff directly to the US consumer, we simply would NOT buy TV’s that were made in Mexico because they cost MORE. We would simply then buy TV’s made in Japan or whichever one was cheaper.
That is called competition, and BUYING POWER. When you have choice, YOU have the power and NOT the seller. That is why Mexico caved so quickly. were the Tariffs imposed, and then the manufacturers tried to raise the price to offset the tariff instead of cutting profit margin, they would have DECREASED sales to next to nothing, and then, went BANKRUPT. Now there is A limit to tariff benefit. If the tariff was too harsh too fast, there would be no way for the manufacturer to “absorb” the original cost without pain to its self. If that same manufacturer reflexively passed those costs directly to the consumer, they would decrease their sales and that would destroy their profit margins which would lead first to layoffs and then to closing down or moving the plant AWAY from the tariff zone.
Business is cut throat. That is our other advantage in a tariff situation. Japan and other manufacturers would not simply be content to take the 5% new sales boost, they would cut their prices by a few % to try and DESTROY the competition that could no longer keep up. Which would actually be to the BENEFIT of the US consumer.
The MSM and COC are simply LYING to you. Question. Have you noticed the prices have risen on anything we get from China? Answer NO, despite the tariffs being in place for MONTHS. China cannot risk LOSING the US market, so they are absorbing the costs and then trying to hit back on things that we export like grain and soybeans, just to hurt Trumps farmer base. Two problems with that. One China cannot feed its people and NEEDS our grain, the tariffs are only hurting THEM. Two Trump is simply subsidizing the farmers losses. But HOW? Why, by giving them some of the INCOME FROM the Chinese tariffs. China is essentially STILL buying our grain, only at a PREMIUM. Brilliant!
Mexico does NOT have the power to try and hurt us like China can. We simply do not export as much things to Mexico like grain that we do to China. One last thing. The Mexican tariffs would have CREAMED China again. HOW? Because China uses Mexico since NAFTA as a pass through for Chinese goods made in China but assembled in Mexico. There was WAY more to the Mexican Tariffs cave that the MSM would NEVER tell you simply to try and deny Trump a win. They do not care that in the end this will lead to reciprocal trade which will be BENEFICIAL to you and me as consumers by increasing competition and LOWERING prices. Do you know who would lose in the Tariffs? NOT you and me. The real losers would be the COC and their minions in Congress. The represent the the big money manufacturers, and they would lose PROFIT. That is why the whaling over tariffs, it is ALWAYS about $$, THEIR $$ and NOT yours!
politicalprognosticator 