What exactly are tariffs and how do they work?

Found Trumps Lemmy account

It's a US tax on buying foreign stuff.

Problem us, in a global economy, local alternatives often don't exist are still aren't competitive in price.

So it's just a giant consumer tax disguised as "being tough on foreign nations"

A tariff is a specific tax on imported goods.

The tarrif is paid by the person or company doing the importing.

The tarrif is paid to the government of the country the goods are coming into.

So, say I am in the US, and I order $1000 worth of goods directly from a Chinese supplier. When those goods arrive in the US, I need to pay a tax (the tariff) to the US customs department in order to receive those goods. If the US has imposed a tariif of 34% on Chinese goods, I owe the US government $340 before I can receive my goods.

This is kind of a side answer, but it might be interesting.

Trump is imposing these tariffs on goods imported to the USA, and he keeps calling them reciprocal tariffs - in other words he's only doing it because other countries are doing the same to the USA.

But this isn't even true.

The way they have worked out which countries' goods should have tariffs, and how much they should be, is actually based on the balance of trade between the USA and each other country. In other words the difference between how much the USA imports from a country and how much it exports to that country.

He (or rather, his goons) have looked at those numbers and applied a formula and come up with a number for what the tariffs should be for each country. So any country where they are selling more to America than they are buying from America is being "punished".

And yet, those countries have not necessarily done anything wrong - they have made their products, and people in America have chosen to buy them. It's not their fault that Americans like what they make, more than their own people like what America makes.

Also even countries like my own (UK) are subject to tariffs despite the fact that we actually do buy more from America than we sell to them.

It makes no sense at all, and it makes you wonder whether this notion of "punishing" countries which have supposedly done America wrong, isn't just some bullshit he's spreading while doing it for other reasons.

Although you probably don't have to wonder for long. It is.

Whether that's political gain, or undermining the world economy at Russia's behest, or even just making a quick buck by causing the markets to crash, having previously shorted the stocks, is hard to say. But it ain't the reason he's saying, because reason is there none.

[The above is my understanding of the situation, but happy to be corrected as required]

Tariffs are a fee paid when goods enter the country.

When your $599 iPad is loaded off the freight ship in the harbour, the receiving company pays 34% ($203.66) to the gubment for the privilege of importing things from China.

Now Apple will have to sell that same iPad for $802.66 (plus sales tax) to cover the tariff.

In theory Apple could start producing iPads in the US instead to avoid the tariff. But US workers want a living wage, paid overtime, health care and PTO, so there's no chance of being cost effective. Also, most materials are still imported, so they'll have tariffs, too.

It might make sense to put tariffs on foreign cars to stimulate a domestic auto industry. It might keep a lot of workers at their job, and any dollar they earn will be taxed both as income and again when they spend it.

All-round tariffs like we saw this week just hurt most of the involved parties.

So, how does this affect the involved parties?

• Things get more expensive for US consumers. They can't afford to buy as much stuff.

• The US gubment gets extra money.

• Other countries don't sell as much stuff to the US.

How this affects international relations, and if countries retaliate with tariffs remain to be seen. Anywho, the US is no longer considered a reliable trading partner.

Everything that is not purely American is going to be a lot more expensive.

Its like the fry tax. When you go through the drive through and the fry enters the car its like goods entering the country but instead of your dad eating a fry and giving you the rest an amount of money has to be paid based on the value of the goods.

Say I'm from country X and I make widgets for $10 each. The US decides to put a 25% tariff on goods from country X. That means that each time I want to sell a widget in the US, I need to pay 25% of its value as a tax. If I was only making a 25% profit on each widget, that means I'm now breaking even on each widget and not making any money. That won't work for me, so I raise my widget prices to, say, $14. Now I have to pay 25% of that, or $3.50, as a tariff, which leaves me pocketing $10.50, which is about what I was making before. Widget manufacturers in the US don't have to do that, so their prices stay much lower than mine, so presumably they get more sales and the US economy is strengthened.

The problem is, the US is not a manufacturing superpower anymore, and even for the things that are manufactured here, most of the raw materials come from overseas. So the only thing these tariffs are going to do is drive up the price of everything. And once those prices are up, they're not going to come back down, even if the tariffs are removed; in my scenario above, it's likely that when I raised my widget prices to $14, all the US widget manufacturers would just raise their prices to $13 and make a bunch of extra money.

Long story short: more money getting siphoned out of the pockets of the working class.

Tariffs are a consumption tax on foreign imports charged at the time of import. They are paid by the consumer through higher prices.

Ive heard ten explanations and I have to admit I'm still not quite clear on it. Waiting for an expert willing to talk to me at my level to weigh in

Imagine if sales tax were currently at zero percent and some guy said you know what let's start taxing 36% on just about everything. That's the reality we're about to be in. That $500 Nintendo switch 2? Now it's $680. It will be for pretty much all goods coming from foreign countries and we import A LOT of stuff.

Tariff = Tax on imported goods.

Little late, but if you have dyslexia, this guy explains it in audio: https://youtu.be/sGuWRZE1XSc

Lot of cussing, but he's explaining it well a minute in

There are two main ways that tariffs are paid when they reach the destination country: 1. the importer pays (most common) or 2. the exporter pays (least common but not rare). In either case, when the importer pays (1 above), they either a) add the tax to the price for the cosumer of that product or b) they take the hit, or the exporter (2 above) a) adds it to the price of the exported product or b) takes the tariff as a loss of margin. 99% of the time, the end consumer ends up paying the extra cost, companies need to keep their margins so the end consumer prices goes up

If someone from somewhere else wants to sell stuff here, a tariff means the person buying that thing has to pay more. The person buying that thing is usually a company that wants to turn that stuff into other stuff like a computer for example. This raised cost is then passed on to the people that buy it.