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New Research: “Approximately 100%” of Tariff

Mac Slavo
January 9th, 2020
SHTFplan.com
Comments (7)

According to a new National Bureau of Economic Research paper, “approximately 100 percent” of the costs associated with the tariffs on Chinese goods have fallen onto American consumers.  It’s a simple economic fact that those at the bottom of the production hierarchy (the consumers) will pay to cost increases for any reason.  Tariffs are no exception.

Research is consistently showing that the finite laws of basic economics don’t get broken. In fact, the more government meddling in the issue, the worse it’s getting.  Free trade should be a human right, but governments of the world have taken it upon themselves to squash the freedom to trade with others for power and political gain.

President Donald Trump has repeatedly and falsely claimed that China and other nations have paid the tariffs he levied on thousands of products over the past two years. But “approximately 100 percent” of those costs have fallen onto American buyers, according to a new National Bureau of Economic Research paper.

“Using another year of data including significant escalations in the trade war, we find that US  tariffs continue to be almost entirely borne by US firms and consumers,” the economists — Mary Amiti of the Federal Reserve Bank of New York, Stephen J. Redding of Princeton, and David E. Weinstein of Columbia University — wrote in a paper that was circulated this week.

According to Business Insider, a 10% tariff is associated with about a 10% drop in imports for the first three months, according to economists, and this relationship becomes more intense as time goes on. So the effects of tariffs, which were increased this fall, may have not yet come to fruition. “The continued stability of import prices for goods from China means U.S. firms and consumers have to pay the tariff tax,” New York Federal Reserve economists Matthew Higgins, Thomas Klitgaard, and Michael Nattinger wrote in a November study.

And it isn’t like this should surprise anyone.  If costs go up (mandated minimum wages, tariffs on imported materials, forced compliance with regulations, etc.) that cost is paid by someone.  If a company wants to stay in business, they must either cut costs by eliminating jobs, lower costs by lowering the quality of the product or pass the cost onto the next buyer. It is not a difficult concept, and yet we have people so blinded by their love for Donald Trump that they will push logic and economic law aside and say “to hell with the free market” all for a false “win” against a manufactured enemy.

We truly live in strange times.

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Author: Mac Slavo
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Date: January 9th, 2020
Website: www.SHTFplan.com

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7 Comments...

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  1. This is the 3 card monte economics in action.

    Lets say prices go up 30%. But at the same time WAGES go up 50%. Everyone is much better off.

    Horrible! You had serious surgery and now throw up, lose your hair, and have radiation burns! Lets not talk about the Cancer being in remission.

    People are generally (unless you are for a full on welfare socialist state where no one who doesn’t want to works) BOTH producers – laborers earning a wage, and consumers spending it. (they can also save and invest). What needs to be measured is the cost of goods in time spent earning the money to buy them, not some isolated measure.

    And if you were really serious you would attack inflation – the monetary expansion. 1 Oz of gold was $35, then went near $1k, then was around $300, now is $1500. The gold didn’t change, but that 1Oz can buy a lot of the same stuff it could back when it was $35.

  2. The object of a tariff is to cause consumers to stop buying whatever it is that is tariffed, therefore, causing economic pain to the producer. The consumer is not forced to buy it.

  3. Clown World says:

    “If a company wants to stay in business, they must either cut costs by eliminating *jobs, lower *costs by lowering the *quality of the product or pass the cost onto the next buyer.”

    There were no literal *jobs, *costs, or *quality; you have used the bare minimum of materiel needed to create the appearance that you were an active business, not just a passive shell company to launder corporate welfare.

  4. Rick says:

    That’s the point of tariffs. Make the product less or completely undesirable so the consumer buys American. Its supposed the be more expensive to us so we’ll quit buying Chinese.

  5. BULLSHIT mac !!!!!!!!!!
    We are not the only country the chinese sell to —– Because of the standoff there will be less tariffs on the goods we sell them—DAAAAAAAAAAAAA!!!!!!!!!!!!!

  6. Bruce l Dryden says:

    What a crock of shite. As tariffs increase the price of goods to the consumer, the natural response is to find more competitively priced products, driving the consumer away from the targeted goods in two ways, more costly leading to less sales, less sales leading to fewer imports of those products.
    What ever feckless dolt economists writing this flawed ‘ study ‘ are trying out for government jobs in a socialist environment.

  7. Clown World says:

    (Communist wealth redistribution) tariffs could have been used in support of specific, blighted industries, rather than your random hobby horses. Specifically, who were you protecting with this protectionism?

    Also, the Chinese Walmart, in China, sells luxury items. They could copy anything, at any level of detail, using any materials, but you have not paid them for such high production values So, the Chinese have not put excellent, American craftsmen out of business, if something was to be produced, artisinally, for discriminating customers.