Explain Like I'm Five

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If Trumps tariffs go thru would that not cause the countries the tariffs are imposed on just raise their prices? And a result of that hurt the american consumer? Why do it to begin with? (lemmy.world)

submitted 14 hours ago by [email protected] to c/[email protected]

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[–] [email protected] 14 points 13 hours ago (1 children)

No, not really.

That logic only holds if american consumers have infinite money, which they dont. You cant just raise the prices indefinitely, eventually people just cant afford to buy the product so they dont buy it at all.

So it hurts everyone, the actual outcome is the product straight up just vaporizes off the proverbial shelves, you're supply dries up.

For canada this heavily includes:

Automobiles, enjoy going back to having year long + waits for getting your car you wanna buy
oil, gas prices will skyrocket because the US has its own supply, so people will still buy it but yeah, prices will just go sky high
Machinery, including construction equipment, refinery equipment, turbines, etc etc. So this will result in massively hiked up city level taxes as your local power plants, processing plants, etc find their repairs skyrocket in costs. Also potentially a lot of refineries and plants will no longer be able to afford operating costs so they'll just shut down, so unemployment will skyrocket
Medication, Im sure you see where that one ends up going...
Aircraft and Spacecraft

I don't know how the US thinks this isn't just shuffling money around as the primary money for this is from federal spending, so they're literally just imposing tariffs on themselves, which is pretty stupid. Par for the course though.

[–] [email protected] 17 points 13 hours ago (1 children)

Shuffling it because he can say, "I'm going to cut your taxes!" And then do so and people say yay, he did what he said he was going to do, then he throws on the Tariffs and it taxes everyone across the board. What that means is he was able to directly increase the taxes on the lower and middle class, and get them to vote for it. While his decreases on taxes and the tarrifs end in a net positive for the rich still.

Shift the weight onto the masses who are struggling.

[–] [email protected] 7 points 11 hours ago (1 children)

Yup, lowering a progressive income tax and increasing a regressive (sales) tax. The poor get hurt much more than the rich.

[–] [email protected] 3 points 10 hours ago* (last edited 10 hours ago)

Exactly. Companies and the rich usually make most of their profits off whats below the bottom line and expectations of the bottom line going up. The majority of the population, lives and breathes what is above the bottom line. Their wages, their equipment, their healthcare, 401k matches... day to day perks, everything down to the coffee quality to keep people going when you should have crashed. That's where the cuts come from to make sure the bottom line stays positive and increasing, otherwise they would lose investors and stock buyers. So long as they keep buying, they don't give a damn what happens above the line. Hire micromanagers if they have to, cut bonuses, make employees who would make 55k a year hourly into managers with a set 45k salary with no overtime bonuses because it falls into the loopholes that a certain party keeps fighting to leave open.