By Elayne Savage, PhD
I need some help here regarding the seeming contradictions about who pays tariffs.
I have believed that while tariffs are imposed on other countries, they are actually paid by the importing country.
These are taxes that the importing country is responsible to pay — that would be us (as in USA.)
However, press releases and verbal statements from the Trump administration – and most of the related press reports – seemed to infer that the exporter pays. And the President's comments are framed in terms of us punishing that country!
For example a recent WaPo headline:
Breaking News: Trump administration announces sharper tariffs will take effect in a week, including 35% levies on Canada
Then once I began researching I learned I had been right all along!
And folks are shocked that it turns out that indeed the country that receives the goods pays the tariff.
Because the company that receives the product pays the fee, in order to compensate, they may raise their prices.
So it turns out it is the consumer –– you and me –– who actually ends up paying those tariff fees.
Sometimes, however, the exporting country will make price adjustments before the product is shipped to try to insure they won't lose a sale.
And now that I understand this, the angrier I get when Trump gets offended with some country, takes it personally and retaliates by punishing them by raising their tariffs and bragging about his punishment of them.
Here are a few media statements about tariffs:
Who Pays Tariffs? Americans Will Bear the Costs of the Next Trade War
https://taxfoundation.org/blog/who-pays-tariffs/
AP fact check: Trump’s fog of misinformation on trade
https://www.pbs.org/newshour/amp/economy/ap-fact-check-trumps-fog-of-misinformation-on-trade
And from AI of course!
https://www.google.com/searchq=what%20country%20pays%20tariffs?&source=sh/x/gs/m2/5
Am I missing something here? Or is Donald Trump somehow not seeing the bigger picture?
Or is he playing dumb and pretending not to know the truth about how tariffs work?
For me these contradictory messages has been absolutely crazy-making.
I would love to hear your thoughts . . .
You can email me at elayne@queenofrejection.com
Until next month,
Elayne
Elayne Savage is the author of ground-breaking relationship books published in 9 languages.
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