Journal of Other Forum Analysis (Volume II, Issue 1)

[DavidCroquet]

It's hilarious that you don't even know who pays tariffs but you're trying to tell us how they work and how great they are. Why doesn't your town place tariffs on any goods that come from outside it, Nintex?

I assumed he meant that whatever the price increase would be for US citizens, they would decrease their selling price by that amount, effectively paying the tariff in order to sell their goods at the same price as before and not risk people refusing to buy the now-more-expensive good

This is what I think Trump thinks will happen, but he's wrong.  You can tell by how he behaves that he thinks he has a cure-all with tariffs - how often he talks about them and responds to questions with the subject of tariffs.  You can tell he thinks he's found some magic bullet because the US is such a large economy that we can throw our weight around with it like we do with our military.  But it's not comparable to military force and he thinks using tariffs to hang over any country's head to get whatever you want is as simple as being a function of how wealthy you are like your ability to build and pay for a large military.  It's wrong.   No, China is not going to pay tariffs on their exports, we are.  There are a lot of working parts, but exporters incentive to reduce their prices to offset tariffs depends on the elasticity of demand for the specific goods. If demand is highly elastic and buyers are sensitive to price changes, exporters may lower prices to stay competitive, absorbing part of the tariff as reduced profits.  But if demand is inelastic and buyers are less sensitive to price changes, exporters can pass most or all of the tariff cost onto consumers without losing significant sales. The thing is, exports from China tend to be price inelastic, especially in the short term -- it varies by product of course and the conditions of the market, but economists look at the trade war between the US and China and see China's overall export price elasticity often below 1: meaning that a percentage change in price leads to a less than proportional change in export volume.  This inelasticity is due to China's dominance in global supply chains, its ability to produce at scale, it set up all of its infrastructure and logistics for their export-oriented economy, their ability to exploit their enormous labor force, their ease and speed that they engage in currency devaluing, and simply the limited substitutes for many of its goods.  Chinese exporters often absorb some costs through lower profit margins, but U.S. importers and consumers still bear a substantial share via higher prices - so it's a dual burden that undermines purchasing power and economic efficiency in both directions. So thsi is not a magic bullet that Trump thinks it is - broadly speaking, it's a tax that raises the costs for businesses, slows economic output, and increases costs for consumers and reduces choices. These tariffs in particular will disrupt global supply chains and investment decisions and incentivize firms to play this bookkeeping game of 'do i absorb the loss for this thing here and/or pass the cost for this thing here onto consumers to stay competitive?', which harms economic efficiency. Reducing trade volumes, slowing growth, and safeguarding your business for retaliatory measures undermine the intended benefits of tariffs that trump thinks he'll get too - surely there are people around Trump to tell him this? This isn't rocket science.  As China shifts toward more sophisticated exports, certain high-value goods are showing greater elasticity, so there will be higher responsiveness to price changes - but that means the tariffs have reduced effectiveness in safeguarding the industries Trump is trying to protect in America - and again, they're not retards, they know what those industries are - and CHina will engage in retaliatory measures for the most impact and disrupt global trade relationships.  For many high-value goods, the U.S. lacks sufficient domestic production capacity to replace Chinese imports quickly -- look at that semiconductor plant that TSMC is building in Arizona..it's taking forever and they're been buried in years of paperwork - this is one single semiconductor plant.  Again China knows what these industries are - the tariffs will raise prices for consumers without significantly boosting domestic industry in the short term.  In contrast to our ability to undermine their export system, value-added goods produced in the U.S. (the intermediate goods that use Chinese exports as 'inputs' that go into the products we make) - the advanced manufacturing products are more likely to suffer from price increases caused by tariffs and higher input costs. And these goods often face stiff international competition because they get their value from R&D innovations that need to constantly keep up with advances, and higher production costs make them less competitive globally. So tariffs on imported intermediate goods (like steel or electronics components) will raise input costs for U.S. manufacturers, reducing their profit margins or forcing them to increase prices to sell to everyone beyond China.  And if substitutes are available for these products from abroad, the demand for those products created by the domestic industry you're trying to protect decreases, creating a domino effect where youre forced to choose to protect an industry that no longer has to be competitive thanks to tariffs, all the while shitting on consumers and incentivizing poor business hampering the market or leaving those businesses to get fucked over by the unnecessary trade war that you gave all the cards away to.  Also I need to play GTA 6 on PS5 Pro and daddy needs the price to go down

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