Jef PoskanzerWrong: "Trump imposed a 39% tariff on Switzerland." Right: "Trump imposed a 39% tariff on Americans who buy from Switzerland." Every time you see this mistake, correct it. Every. Time.
DJGummikuh@jef I actually don't think that's true, though. Tariffs are always imposed on the Vendor side of a transaction AFAIK, even if they are eventually paid by the buying side. And the resulting chilling effect also is going to reduce either revenue or margin (or both), also (mainly) hurting the vendor, given that alternatives exsist for the customer. "Imposed tariffs are most directly felt by US citizens" would however be a claim I would rally behind. 🤔
RejZoR@DJGummikuh @jef I mean, do you think the seller is just going to eat the difference to keep the same price? Nope, the price will just go up for that amount and that amount will be paid by American people.
The idea behind tariffs is that domestic products wouldn't face this price increase and would thus be more competitive.
Reality however is that domestic products get jacked up in price as well so in the end consumers are the ones at loss. Trump lives in lalaland and doesn't understand this.
@rejzor @jef there are more moving parts to this. local competition, dependance of the vendor on the market and margins just to name three. But I believe we actually miss the point that tariffs as they currently stand flow into the executive's purse, giving trump financial clout without supervision from congress. I firmly believe that to be the main motivator, with the question WHO actually pays being sidelined.
@DJGummikuh @jef I mean, just look how absolutely shamelessly greedy American corporations are. Of course they'll jack up the prices just to keep execs and investors happy. Coz cash must flow and it must only flow upwards year over year to infinity. They don't care about competitiveness, they'll just buy their way there when time requires it... And now, back to profits.
@rejzor @jef as said, that only works when your product cannot be substituted. Otherwise you will face declining sales when prices hike
Edit: I mean you will face decline anyways, since every hike is going to out-price your product for some, but these are normally compensated by overall higher revenue. It's all a balancing act
Hippo 🍉@DJGummikuh he's also using this as a coercive tactic to get countries to give him better deals.
For example, by imposing 25% tariff on Americans who buy from India, he encourages Americans to buy from Bangladesh or Myanmar instead. This hurts Indian traders due to losing (numerous, rich) customers thereby pressurising India to give Trump other concessions such as agreeing to buy more things from the US. Not sure how effective this is (probably varies by country) but yeah
(India is an ongoing example so we don't know what'll happen yet, but we'll find out eventually 👀)