this post was submitted on 26 Jan 2026
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Leopards Ate My Face

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OP is shocked that an import tax is not paid by the exporter (lemmy.world)
submitted 3 days ago by Wispy2891@lemmy.world to c/leopardsatemyface@lemmy.world
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Was he actually thinking that those $450 were just gifted by the exporter?

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[–] UnderpantsWeevil@lemmy.world -1 points 2 days ago* (last edited 2 days ago)

There is little will to shave margins when industries and nations are broadly effected, insufficient margins to absorb much, and little reason even bother to do so save to preserve future business with the expectation that tariffs will be dropped.

There's plenty of will when a commodity is fungible and margins are high. We can see this in retail prices relative to tariff rates.

Our observed average price increases — at 5.4% for imported goods and 3% for domestic goods — are moderate relative to the size of announced tariff rates, particularly on Chinese products. We find that roughly 14 to 20 percent of the tariff changes were reflected in retail prices within six months. These rates are higher and materialize faster than those observed during the 2018–2019 U.S.–China trade war, but remain well below full pass-through, reflecting gradual transmission and continuing uncertainty about policy persistence.

When profit margins on a product are high, the retailer is more comfortable absorbing the tariff rate through lower marginal profit. Its on products with lower margins that we're seeing the highest inflation rates.

What's more, as imports rise in price they raise the clearing rate for all products, which encourages domestically produced products to rise in price to match. So you're "paying the tariff" on goods that aren't even being tariffed, because they're chasing rising prices of low margin imports.

How much actual work vs future commitments again?

More actual work with each month these tariffs linger. There's other factors, of course. The declining value of the dollar is inducing demand for US capital and real estate from overseas, as well as cheapening the cost of US labor. And with three more years of Trump in office (plus the real possibility that we get more MAGA Republicans in years to come) business leadership is inclined to believe a high-tariff / low-tax economy is the future for America.

This makes the US an ideal tax haven. We've been a popular safe-harbor for Chinese, Japanese, English, German, and French billionaires to shield their own wealth from their home countries. And if the EU commits to a uniform income or wealth tax policy, this trend will only continue.