Who collects the TARIFFS?.... The Government agencies. Who pays for the effects of the tariffs?... the users and finally the end-user. When people are paying more for stuff and the more is going to the government, that is CALLED A TAX!!! Plain and simple. Trump thinks that by raising foreign prices he will get industries to re-locate to the USA under the theory that the reason it was sourced out of the country is because it was cheaper to do that. Now that he made it more expensive companies will manufacture in the USA. BUT if they use raw materials that have to be imported the theory can fail on that point. Also, the only reason a US factory would look profitable is because the selling price is now 25% higher. They would be manufacturing with THAT inflated price in mind! So the Tariffs CAUSE INFLATION of pricing. BUT, no company would just jump on building a factory, because if the tariffs are ever backed off (which just takes a stroke of a pen) they would then have wasted their money on an unprofitable factory. This is a strategy from a little mind that only knows real estate properties and thinks that his tiny bit of self-confirmed ideas apply to everything in the world. The same one that conceived of a whole bunch of businesses that went bankrupt and some that he was sued over. So he does not have a good record when he goes out of his daddy's original businesses. Actual economists (who study their subject instead of just assuming everything they think of must be right,) will tell you over and over that they have NEVER seen good results medium or long term from tariff wars. They do not end up doing what tiny little minds think they will do.
financialpost.com
