this post was submitted on 20 Jan 2026
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[–] TheChargedCreeper864@lemmy.ml 21 points 1 day ago

Any tax imposed will always be split between seller and buyer in the market. If the buyer needs to pay a higher price they will buy less, but due to the increase being spent solely on the tax none of it ends up at the seller and they also earn less.

The degree to which each party "pays" for the tax depends on things like their ability to pivot to alternatives. Turns out that if you impose blanket tariffs on every single thing ever made anywhere on Earth all at once, and you have nowhere near the capabilities to produce all of that domestically in the short term, that you end up having to suck it up if you plan on buying anything (using parts) from abroad.

And I doubt such bold ideas as "let's upend entire global supply chains that have been built over decades on the vague notion that somehow the entire world collectively has been able to inflict harm upon the United States unnoticed and unpunished and I, the acting president of Venezuela, am the first American to ever notice this" uttered by someone who the rest of the world expects to be replaced by someone less... "imaginative" as this guy in less than 4 years (Lord what a long sentence) are enticing entrepreneurs to invest in moving every supply chain for every product on Earth to be entirely produced in the US.

As long as the rest of the world keeps producing as they are, you're dependent on American firms popping up to do it instead. But any businessowner of the scale required to be up for the task knows that proper international trade creates maximum wealth (which is extra nice for them because America is not traditionally known for redistributing this newfound wealth) and would prefer that. And if anyone willing to start one anyway despite all that also believes that this will all be over in 3 years, they'll never bother to engage in any process longer than that to start a business. And even despite all that, there's no guarantee that any American good will be of equal or better quality or price than a foreign good just because it was made fully in America. Especially if the idea is that this will be the case for everything on Earth. It's fully possible that you'll "hurt" the foreign companies (they'll just sell amongst themselves, it's the entire rest of the world, they'll figure something out) and end up in a situation where Americans have inferior goods at higher prices.

TL;DR: Tariffs do not necessarily lead to consumers paying for most or all of the tariff. Blanket tariffs just because are profoundly stupid and lead to consumers shouldering the burden.

(I don't know why I was moved to write such a long comment for such a minor technical difference)