Who would pay for tariffs? Consumers, of course
By Paul Krugman / The New York Times
Imagine yourself as a small-business owner who produces something — say, plastic lawn ornaments — for American consumers. (One of my uncles actually was in that business.) Then for some reason, politicians propose imposing a tax of 25 percent or more on all sales of pink flamingos, garden gnomes, etc.
What will you do if that tax comes into effect? Will you pass the tax increase on to your customers, or will you try to keep consumer prices unchanged and absorb the tax yourself?
Well, you’ll certainly tell politicians that your customers will end up paying, and you’ll probably be telling the truth. Your costs, in effect, will increase, and your profit margin probably isn’t high enough to absorb the tax, even if you wanted to.
Now change the story a bit: You’re not an American small-business owner; you’re a Chinese company selling stuff to the United States; and the tax in question is a tariff, a charge levied on goods imported from China. Why should the answer be any different? Normally, we’d expect the tariff to be passed on to U.S. consumers.
https://www.heraldnet.com/opinion/krugman-who-would-pay-for-tariffs-consumers-of-course/
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More than likely, tomatoes are home-grown by American farmers and there wouldn't be foreign-grown tomatoes to compete with them. Tariffs wouldn't be placed on items that have no foreign competition.
It's the US-manufactured goods and US jobs that tariffs are meant to protect.
A car, a TV set, a computer, you name it - just about anything can be made in China for less cost than the same could be made in the US. American corporations have fostered this development for nearly 50 years by investing in and training the Chinese manufacturers to make these items for us. Why did they do this when they knew it would cost US jobs? Well, for profit of course. Ask General Electric, they were one of the first companies to do it.
Look at all the factories that have closed in the United States, look at the people out of jobs, families broken up, etc. since all this started in the early 1970s. Why weren't tariffs placed on foreign-made products back then? It would have made a difference THEN. But now the barn doors are open and the horses are long gone.
I'll give you an example in the case of General Electric. Back in 1970 GE used to sell their Syracuse-made light bulbs for about $1.00 each. There were a lot families in upstate New York that were supported by these factory jobs. For each lightbulb GE sold they made about $.25 profit, give or take. Before 1975 they figured out they could make GE lightbulbs in Mexico and still sell them for $1.00 each to Americans, but they made about $.75 or .80 profit on each bulb. Halleluia, it's raining money! It didn't take long for other manufacturers to see what GE did and start planning their own factory shutdowns. Why didn't Pres. Nixon or Pres. Ford step in and say, we're charging a $.50 tariff on every lightbulb that's made outside the United States? That would have stopped GE cold, but Repuke Presidents looked the other way. Instead they gave tax breaks to the US manufacturers who built their factories in OTHER COUNTRIES.
Now it's 50 years later, and Chump is playing to the cheap seats with this one. The MAGAs are too stupid (I guess) to figure out that he can't turn back the clock and "save" US manufacturing jobs that will never come back. Or maybe they don't really care.
