Keep raising it.... If they’re going to cover the cost anyways may as well
What is stopping a Chinese company from opening a manufacturing facility in Vietnam and slapping a “Made in Vietnam” label, to avoid the tariffs?
Edit to add, and if Chinese businessmen dud that, how’s this going to bring manufacturing jobs back home?
No!! Any displacement of even $.01, even if it’s spread out over decades, will have a butterfly effect on the free market that ends Beyond Thunderdome.
A linear relationship with the value of the dollar.
I've been told this could never, ever happen and only consumers will be crushed by tariffs. Weird.
I predicted this. As a trained economist, I knew China and Chinese companies would be forced to eat most of the tariff increase.
In the short to medium term, China simply cannot afford to have their companies shut down and lay off millions of workers. The cost of doing that is far greater than eating the tariffs.
Contrary to what many think, China is running a very large deficit for the past few years. That’s not going to change because their aging population will require government benefits and subsistence payments.
The Chinese economy is going to be a dumpster fire in a few more years.
“This suggests that companies that have shifted production out of China are not paying higher prices, undermining one of the key assumptions behind claims that tariffs would drive up prices for U.S. consumers.”
Its also proof that the old saying, Better half a loaf than no loaf at all is correct. The Chinese and anyone else in the distribution chain who is absorbing the tariff cost realize that if they simply pass the cost along to consumers, their products will no longer be price competitive. Better to sell at a lower price than not to sell at all. I also think the Chinese realize they must keep the American consumer base addicted to their cheap products, and make sure they dont defect to non-Chinese manufactured alternatives.
How the free traders miss this obvious dynamic is beyond me.
Yes, totally wrong, and I say that as a believer in free trade. It has to be conducted between friendly and fair nations. China is NOT one of those.
It takes more than two years to determine the success of tariffs, but I expect you are aware of that.
Trump’s stated goal is to remove every tariff in every nation.
Free trade is a model not an actual state of the economy. There never has been free trade and never will be.
What we have had for the last century is market-controlling monopoly (and crony) capitalism with state-managed trade. The sheer size of the fedgov shows that there is state control throughout the economy established to assist the monopolists.
Goods for which a change in price does not quickly affect supply (inelastic supply) and for which a change in price very quickly affects demand (elastic demand) were the prime targets of the tariffs. Thus, when the price to the consumer went up on account of the tariffs, the amount the consumer bought went down; but then the suppliers were stuck with the goods, so to move them, they had to reduce the price. So to the US market the new lower price plus the tariff would be about the same as the pre-tariff price.
From what I have read, this was intentional policy on the part of the Administration.
It is sad but amusing to read knee-jerk comments by liberals who think that the importing consumers automatically pay the whole amount of any tariff.
You realize that lower import prices reduce any incentive to move production back to the US, which was ostensibly the point of this exercise, right?
If china were a sole source on what they send us, the tariff-people might have a point, but china has competition all over the world for everything they manufacture.
It hard to extort anyone over shoes or washing machines when shoe and washer salesmen are lined up outside your door
Too bad the average imbecile on the street, or your average reporter (but I repeat myself), won’t be able to understand this.
Wow.
Sure China is paying for our tariffs...and so is the American consumer and the U.S. economy.
Yep - they always claim to be for something ....unless there’s a potential they may have to pay more for sneakers or avocados, which they probably buy once every two years, then they go full concern troll loco....
Even with their “one child” policy the Chinese have to create 5 million jobs per year just to keep their employment rate level. The tariffs have the Chinese on their heels.
https://www.worldometers.info/world-population/china-population/