Well, the American distribution point receiving the imports will be paying 20% more. That will be reflected in an increase in prices to the American consumer who loses in this. It represents a government-forced lowering in the standard of living by anyone affected by this forced price increase. Nobody talks about that.
I love Trump but not to capitulation. This is not a good move.
Exactly. People seem to think it’s Mexico selling their goods here, when it’s actually US companies buying in Mexico. The biggest beneficiaries are going to be the US producers who weren’t competitive and who will effectively be getting a government subsidy now. Same way we pay more for sugar than anyplace else in the world.
These trade agreements such a NAFTA and others were government forced lowing of living standards for millions of factory workers and others over the past thirty or more years. We should never have entered such trade agreements with Third World nations because the only thing that could happen is what did happen, a trade of US factories and jobs for cheap labor, resulting in thousands of plants leaving the US to produce in cheap labor nations and ship back to the US market.
That needs to be reversed and any reductions in living standards of consumers will be tiny compared to the reduction in living standards of the factory workers who lost jobs to these past agreements.
We should have free trade with nations of comparable living standards, and tariffed trade with cheap labor nations in most cases.
“the American distribution point receiving the imports will be paying 20% more”
No.
The increased cost can be passed on to consumers OR it can passed on to workers or even to investors.
OR it can be absorbed by the suppliers.
What would actually happen would depend on the economic power of the participants.
But one can safely say that neither 0% nor 100% of the tax will be paid by consumers.