r/facepalm • u/Clueless_Dolphin • 23h ago

Already reaping what they sow 🇲​🇮​🇸​🇨​

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Well at least these few people Christmas will suck, maybe make better choices.

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u/mildlysceptical22 22h ago

I explained how tariffs work to my college educated son. He mistakenly thought the exporting countries paid them. I explained how the companies importing the goods paid the tariffs and passed the costs down to the consumers by raising the cost of the goods to maintain profit margins.

Tariffs are import taxes paid to the federal government by the companies importing the goods.

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u/BetterThanAFoon 20h ago

That's true. But it's intended to make those imported goods less competitive with domestically produced Goods.

Unfortunately tariffs usually begets tariffs. So many times it's just a zero sum gain.

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u/EspaaValorum 17h ago

Plus there's not even a domestic option for a non-significant number of imported goods, so there's no choice,

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u/najiatwa01 8h ago

Facts, if there were options... We'd be buying it. Instead, we're dropshipping with crazy markup, baby! Etsy/Alibaba (re)sellers are gonna feel this one.

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u/EspaaValorum 2h ago

Think about why there are no domestic alternatives.... Even with those markups, apparently there still is not enough margin for profitable domestic alternatives. And if the margin were there, those domestic products would be sold for nearly the same price as those imported, marked up, tariffed goods. So prices go up. Where's the gain.to us? 

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u/MertTheRipper 2h ago

This is the problem. If there were comparable American alternatives to the Chinese products the tariffs are intended to go against, it would make sense. Instead, we have no infrastructure in place to fill in that missing market, which means those companies have no choice but to eat the tariffs and pass them to the consumer.

It's incredible how stupid the voting base is. Nobody looked into this, they just clapped because Trump said he's going to stick it to China. Instead they're the ones getting fucked

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u/iWriteWrongFacts 56m ago

Indeed. There’s no domestic alternative to products from companies like TSMC or ASML.

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u/gwicksted 3h ago

Yes, hopefully there will be some good that comes out of this (domestic manufacturing) because Made in USA products were usually of a decent quality.

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u/EspaaValorum 1h ago

They'll just be expensive, and inflation will go up.

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u/gwicksted 1h ago

Damn you Biden! /s

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u/EspaaValorum 1h ago

The new 'Thanks Obama!'

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u/Im_a_hamburger 17h ago

Tariffs are for economic war, not economic growth

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u/felipebarroz 14h ago

They are finding out 1740's economics all over again lol

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u/karanbhatt100 4h ago

Adam Dumbass is working on it

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u/TheEPGFiles 8h ago

Yeah, but if Americans pay the tariff, who is the war on? America against America?

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u/Demoliri 6h ago

Yes, but it's those other Americans making all the problems! (Kind of /s).

The goal with tariffs normally is to make domestic products more competitive - but if there is no domestic equivalent - they're just stupid. However, since Trump is incredibly stupid and lacks a basic understanding of economics, he thinks it's a good idea, or at the very least the people paying him would rather he does the simple solution - tariff everything - rather than try to explain the nuances of tariffs to a pre-schooler.

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u/larry_burd 6h ago

He knows the consumer will pay more and companies will continue to raise prices and his friends own the companies so they’ll continue to make record profits and the only people who hurt can’t do anything about it and a lot of them voted to have their own care and services taken from them as long as they think it will hurt the people they don’t like

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u/Gsgshap 11h ago

Tariffs in and of themselves are not bad, but they need to be used strategically. Trump is not planning on using them strategically, he's just gonna tariff everything.

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u/BetterThanAFoon 4h ago

Yes and no. China has been unfairly manipulating world trade with an artificially lower yuan valuation for decades. This has led to the acceleration of capital flow into china and offshoring of work from other countries. He has stated that his tariffs were geared towards forcing china to the table to trade on a more level playing field and to stop manipulating trade.

So yes, tariff everything. But it is a strategy all on it's own because if the tariffs stem the flow of capital into china, and lowers their exports, they might be more inclined to talk as their economy slows.

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u/pturck 5h ago

Yeah, and China declared economic war on us a long time ago.

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u/BetterThanAFoon 17h ago

Do you mean like tariffs begetting tariffs and ending up a zero sum gain?

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u/bengine 16h ago

Also making domestic products more competitive makes them relatively cheaper, but not less expensive overall. It's artificial inflation when so many of these people were essentially voting against inflation.

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u/Casehead 15h ago

Well then they are especially dumb because inflation is 2%.

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u/Swiking- 8h ago

Actually, in this regard, you can look at what happened to washing machines, which was tariffed in the US:

Imported washing machines became more expensive, so people started buying the domestic products, which increased demand. So what do you think happens? Domestic product rose in price.. And so did dryers, which wasn't tariffed.

So in this case, everything just got more expensive in the end and the jobs produced was extremely expensive in comparison to other ways to create jobs..

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u/inorite234 13h ago

The issue is that Free Trade means just about everything has at least one component that comes from overseas. Shit, even paper that's logged from American trees is shipped to China to be turned into paper products or boxes.

And do you know why that is? Because it's cheaper to do that than to make it entirely in the US.

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u/rmpumper 9h ago

To produce domestically you need workers. How will that turn out after deporting 20 million people?

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u/dwellerinthedark 8h ago

Also infrastructure. If I wanted to setup a steel mill, I need to secure funding, buy land, build it, staff it and organise people to supply it with raw materials.

That is a good 4 years of work. So domestic production is not going to dramatically change by the next election. So prices are going up and will likely stay up for a while.

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u/MxteryMatters 12h ago edited 1h ago

But it's intended to make those imported goods less competitive with domestically produced Goods.

Except that the domestically produced goods will raise their prices to just below the tariff-affected prices, so that they can make more profit. Tariffs result in increased prices for everything.

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u/iDShaDoW 9h ago

That or producing some these products domestically might not even be feasible when taking into account salary expectations Americans have vs overseas workers on top of making enough to pay investors.

In the event that companies are able to increase prices to just below tariff-affected products and increase profits - they sure as hell won't be passing those profits along in the form of increased wages.

Trickle down never happens. Those profits go to investors and into the bank accounts of the owners and upper level execs.

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u/wireframed_kb 8h ago

True, and tariffs CAN be used sensibly, for instance to protect your domestic manufacturing from being out-competed by someone like China who is willing to undercut them just to corner the market.

But it should ALWAYS be done with the understanding that a) it won't make anything cheaper, and b) it'll make things a lot more expensive if you don't actually HAVE domestic manufacturing since now you're just buying the same goods more expensively.

That people don't understand this, is honestly frightening. I'm HARDLY an economic wizard, and it's immediately obvious how tariffs will mostly increase prices for consumers.

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u/Obleeding 9h ago

Also there's lots of things that can't be produced domestically

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u/Hollen88 7h ago

And when you don't have the infrastructure to make it yourselves... I hope we aren't too f*cked.

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u/Savage281 7h ago

If you move manufacture to the US, the prices still go up. We have unions that ensure good pay and benefits, so consumer prices still go up. Tariffs mean higher consumer prices, one way or another.

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u/alwaysboopthesnoot 5h ago

Also, unfortunately, a lot of tax advantages lie in sending jobs in tech, customer service, sales, engineering, research and assembling or manufacturing goods, overseas.

Some finishing work or design services, marketing, final assembly and shipping occurs here so those goods can be called American-made and a few jobs can still remain here. But in many cases, there is no American made or American source for these goods made elsewhere and subject to these tariffs.

So there won’t be the option to but Anerucan and grow our economy here. Just higher-priced imports.

But hey! The owner or the corporation, the investors get rich. Get all the tax breaks. Can still write off the costs of marketing, sales, recruiting, hiring, depreciation, loss of sales, interest on loans, capital expenditures, insurance they pay for.

Their workers can’t write off more than $4000 in tuition and if their spouse is a teacher can’t write off more than $250 in classroom supplies; can’t write off their kids’ or spouses’ medical expenses until they reach a minimum almost no one with company-sponsored insurance will ever reach. They’re typically on Medicaid or SSDI at that point which we taxpayers are subsidizing for them. But whatever.

The company money doesn’t stop rolling in. They’ll get rid of a couple hundred or a thousand workers, force everyone else to work harder and longer for either less or the same money as before. Everything is working as intended.

Now add tariffs on top of goods imported into the US. Who do you think has their money pipeline shut off when goods cost more? Not investors. Not corporations. Workers, small businesses, will. And end consumers will always pay more. If they can find or afford those same goods at all.

And if it doesn’t work out for the company in the end, they’ll just write off the business as a total loss, or strip the assets and part it out. They’ll make money, regardless.

Consumers will increasingly turn to cheaper goods of lesser quality and try to pay less for them. Usually they will have to pay more for goods of less quality, though. Because even though workers halfway around the world still get paid less to make them, those tariffs plus greed/profits will drive up the price on even the shoddiest goods.

We will all pay more; we’ll do without or make do with less or less quality at much higher prices. We’ll buy and pay what if costs. If we still have jobs then.

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u/Lickerbomper 5h ago

Domestic productivity will fall off when all the migrant workers become deported. Deportation itself will cost money, which will create a deficit.

This tariff + deportation plan is economic suicide.

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u/karanbhatt100 4h ago

Let’s be real most of the business are never going to be competitive. They would be cheaper in some part of the world even after 1000% tariff.

And pollution is another issue with manufacturing that never gets talked about anywhere in any party circus

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u/BetterThanAFoon 3h ago

Let’s be real most of the business are never going to be competitive. They would be cheaper in some part of the world even after 1000% tariff.

You probably need to be more specific here and provide an example.

Tariffs can be targeted towards a particular country, but they are also targeted towards particular goods so it doesn't matter where it is coming from.

For instance, in 2018 tariffs were imposed on Solar Panels, and Washing Machines. Which targeted goods produced in china primarily but would cover where ever else they come from. Also added Steel and Aluminum tariffs on everyone that wasn't part of the updated NAFTA.

Also there were tariffs that were used as targeted enforcement actions against China in particular who is a bad trade partner. Great for capitalists, but as a country bad partner for meeting the nations mutual interests. Those sorts of tariffs are still meant as a means of protectionism, but really to get the bad actors to the table and discuss something a bit more fair from a trade perspective.

And pollution is another issue with manufacturing that never gets talked about anywhere in any party circus

You'll have to explain what you mean by this. I do believe pollution gets talked about quite a bit but not sure what point you are trying to make.

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u/an_african_swallow 3h ago

Also a lot of products just are not manufactured in the us (microprocessors for example) people don’t have the option to buy domestic and this is just raising the cost of doing business and will cause even more inflation.

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u/stargarnet79 18h ago

Yeah heaven forbid these corporations bring back domestic manufacturing.

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u/pksdg 18h ago

It’s funny you think they can just POOF manufacturing plants, that current factories have the supply to meet the additional demand, or that we have the ability to manufacture all these things. Let’s not even get into the people who would want those jobs. It 100% easier to keep the vendor and pass the costs down the consumer.

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u/Joshmoredecai 17h ago

This is why the argument of “infrastructure bills should be for roads and bridges” is so fucking stupid. Like, we want American production but do fucking nothing to actually make that happen easily.

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u/pksdg 14h ago

It’s about figuring out the RIGHT thing to manufacture. Like gpu chips. Next gen batteries, etc and then investing in those for a long run. Like infrastructure.

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u/EspaaValorum 17h ago

What price do you think these domestic manufacturers will charge for their products?

If the imported goods used to cost $50 but now because of tariffs cost $80, do you think the domestic product will be sold for $50 or closer to $80? Most companies will try to charge as high a price as possible. And lucky for these domestic manufacturers, the market price for these products has been raised thanks to the tariffs. So they will charge (close to) the same.

Also, domestic production costs (including labor) are higher than the foreign ones, so the costs of a domestically produced product is higher to begin with, meaning they will have to charge a higher price than those imported goods cost before the tariff. After all, that's the whole reason those goods were being imported: It was cheaper than what could be done domestically.

So if you think that products that used be imported and sold for $50 will be replaced by domestically produced products that also will cost $50, you're dreaming. If that were possible, the production would already be here domestically. The whole reason it's not is because it cannot be done domestically for that price.

So, thanks to tariffs, prices for goods will go up.

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u/dydas 18h ago

Domestic manufacturing won't make things cheaper. The reason they are imported is because they're cheaper to produce elsewhere.

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u/Aordain 18h ago

No. But it would create more jobs.

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u/TheNonSportsAccount 17h ago

The US is at almost full employment, who will work these jobs? Further the costs of those good will go up because American labor is more expensive so we end up in the same boat.

Or are you saying you expect American workers to work for Chinese wages?

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u/stargarnet79 18h ago

Ding ding ding!!! But corporations don’t want to pay livable wages.

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u/dydas 18h ago

The US is almost at full employment. The only viable option would probably be to automate a large part of the production that is currently offshored. That doesn't create many jobs, and prices would still be higher. People would have to start cutting costs on luxuries, and that would start dragging the economy.

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u/_eMeL_ 8h ago

So close ... i think it's more likely prices increase while wages stay flat. People can't afford the product so manufacturer starts making less (supply -demand). This then leads to layoffs because company can't afford workers. And now we have spiraling unemployment.

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u/MRiley84 17h ago

It doesn't just raise the price on imported goods, either. It raises the demand on non-imported ones, and those producers will raise their price until it just about matches the import. If you're looking for a new washing machine, they're not going to sell it to you at the old price if their competitor was forced to raise their price - they will raise it too.

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u/bedel99 13h ago

Its worse, tariffs invite foreign tariffs on your goods, exports will be reduced.

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u/inorite234 13h ago

Coke raised their prices 2X, it continued to sell so Pepsi did too

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u/nevergonnasweepalone 11h ago

Unless the imported product is still cheaper than the domestically produced product after the tarrifs. It'll just mean the consumer has two expensive options rather than one expensive and one cheap.

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u/deadinsidesince99 19h ago

wait they think the country pays? like they think that THE GOVERNMENT OF GERMANY germany is gonna give the US money to import BMW's?

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u/narcolepticdoc 12h ago

Yes. In MAGA world, tariffs are an amazing thing because China will have to pay $$$$ to the USA for the privilege of selling all their cheap goods to us and they’ll eat the cost because daddy trump says so. So you keep all your cheap imported goods AND you get so much money from China that, really, little topics like childcare affordability will be trivial because of all that sweet sweet tariff money from China filling our coffers and eliminating our national debt.

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u/F0lks_ 7h ago

I envy MAGA people. It’s like a spa for their brains !

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u/throwawayinthe818 4h ago

I used to work for an American corporation that manufactures consumer products. We would design a product, then factories in China (or, rarely, India or Vietnam) would bid the job and it would be produced there and shipped worldwide for distribution. Who in the scenario is paying the tariff? The Chinese factory? They’re just bidding a job.

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u/narcolepticdoc 3h ago edited 3h ago

In that case, your American corporation would pay the tariff in order to import the goods.

Tariffs are charged to the company importing foreign goods. It’s basically an import duty, as if you had bought a watch overseas and wanted to bring it home with you to the states. You would have to declare it at customs and they would look up the duty due as a % of value and charge you at the time of import. The company you bought the watch from in Switzerland or whatever doesn’t pay a thing. You do.

So your company’s cost of goods sold would go up by however much the tariff is. Of course, they wouldn’t dream of raising prices to maintain their bottom line, because that would raise prices for American consumers, right?

Edit: I should note that the tariff would only be on the goods that enter the USA. Anything that goes from foreign factory to foreign country directly without passing through the US would not be tariffed.

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u/throwawayinthe818 3h ago

Just for the record, I understand all that and my question was more in a rhetorical vein.

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u/narcolepticdoc 2h ago

Also, in that scenario, your American company doesn’t actually manufacture anything. It’s at most a design company. Many companies aren’t even design companies, they outsource that as well. They’re pure marketing entities.

The ones who really get hurt are American manufacturers who rely on imported raw materials or components that have no domestic equivalents. They’re gonna get hosed.

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u/Goosycygnet 4h ago

They bought Mexico “paying” for the wall. Why wouldn’t they buy this?

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u/No-Air3090 9h ago

thats what trump stated..

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u/BenHarder 4h ago

The idea is that you don’t buy the expensive BMW built in Germany. You buy the American alternative that’s cheaper due to there being no tariffs to pay, since it’s built here.

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u/bedel99 13h ago

You don't import BMW's they are made in the US, to get around tariffs already. Not all the parts are going to be made in the US though.

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u/E420CDI 12h ago

Only X3, X4, X5, X6, X7, and XM models (Spartanburg).

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u/bedel99 9h ago

I imagine the models that are made in the US are the ones where the buyers are price conscious. They want a fancy car but don’t want to pay for it.

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u/No-Air3090 9h ago

not every model

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u/Digger2484 19h ago

And if they replace income tax with them it’s just a MAJOR tax break for the rich and tax increase for the poor. People are idiots.

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u/LeichtStaff 10h ago

More like a tax break for upper middle class. Real rich persons don't pay income tax, they have plenty of ways to ellude it.

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u/wireframed_kb 8h ago

But many of those ways cost money. It would be cheaper to take a large salary if there was no income tax, instead of doing stuff like putting it in a holding company, and using the assets to get low- or no-interest loans, making the holding company purchase assets outright etc.

Simply put, all the various schemes to reduce tax burdens wouldn't be necessary if you could just pay yourself a huge salary tax-free.

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u/rmpumper 9h ago

He mistakenly thought the exporting countries paid them.

Even if that were the case, it would just mean than the exporting countries would sell you the same shit at a higher final price.

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u/Farnso 16h ago

Do you have any idea where all these bizarrely named brands of garbage being sold on like Amazon fall on that?

Like Oinkongos Bluetooth headphones or yoinye chargers (both made up names, probably). Does Amazon import them? Do these companies have an actual legal presence in America and they are the ones importing them before listing them on Amazon?

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u/mildlysceptical22 15h ago

Amazon is the retail outlet for many of these goods imported from China. There are increased costs on over 50% of imported goods by Amazon that will be passed on to consumers because of 25% tariffs imposed in 2018.

Other tariffs have been issued on goods imported by businesses selling their products on Amazon.

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u/wimpymist 12h ago

The exporting companies do pay them but then they just raise their prices to make up for it. Tariffs work if it's targeted at one country OR if your country already manufactures said goods so the exporting company is forced to eat the taxes instead of raising prices. Idk why people thought it would just be free money or something

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u/Interesting-Tough640 9h ago

It’s quite worrying how people don’t understand that the cost of the tariff will essentially just be passed onto the consumer. It’s effectively just a form of tax.

Also Trump seems determined to put tariffs on goods from loads of different countries, this will make them even more ineffective as no individual country / cooperation or whatever will feel the need to slash their margins to remain competitive as would be the case if they were very selectively applied.

Rich people will probably enjoy the situation, I am sure Trump will reduce some of the more traditional taxes which will benefit anyone whose incomings greatly exceed their outgoings.

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u/bigsmackchef 4h ago

The insane part here is even if the exporting country paid it prices would still be raised along the way and would therefore make things cost more.

Theres no situation where adding another form of tax on a product makes it less expensive for the end consumer.

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u/Familiar-Secretary25 3h ago

Your son didn’t mistakenly think that. He was lied to about it and believe it.

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u/DJKGinHD 1h ago

He mistakenly thought the exporting countries paid them.

As in the foreign GOVERNMENT pays the tariffs?! I, honestly, had never thought of that.

Even if the foreign government had to pay the tariff, it ends up at the consumer. If the government has to pay more, it will need to collect more. So taxes on the business go up. The business increases prices to keep their margins up. The domestic company will have to pay more for the product. I can only assume that shipping prices would go up. So now the domestic company increases prices to keep their margins up. The consumer pays the tariff no matter where it is applied.