The general premise of tariffs is that a foreign product costs e.g. $100 whereas a domestic product costs $120. If you then put a 50% tariff on the foreign product, it would cost $150, and then people would prefer the domestic product and only be paying 20% instead of 50%. Moreover, they might prefer the domestic product in general (e.g. higher quality and/or patriotism) and only buy the foreign product if it's actually less expensive, and then the foreign manufacturer would have to lower their price from $100 to $70 so that the tariff only raises the price to $105 because any higher price than that and they lose the business.
The result, in theory, is that you would pay $5 more rather than $50 more. Meanwhile the government collected $35 in tariffs on the foreign product, $30 of which came from the manufacturer rather than you, and that allows the government to lower your other taxes by $35 at the same level of government spending and borrowing.
There are essentially two things required for this to work in your favor on net: 1) the tariffs cause the foreign manufacturer to lower their pre-tariff prices at all, and 2) the government uses the tariff revenue instead of some other taxes they would have collected directly or indirectly from you, so that your net tax burden stays the same. It can also be some mix of these, e.g. the foreign manufacturer lowers their price by $10, you pay $15 in tariffs and get a $10 reduction in other taxes, and then you're ahead by $5.
Ironically, the primary way domestic taxpayers end up paying more is if the tariffs succeed in causing people to buy domestic products, because then there is no tariff revenue on the domestic products and people pay the higher price for the domestic products without a reduction in other taxes.
As for tariffs, SmarterEveryDay has proven that we need them with his smart grill scrubber that got destroyed by cheap Chinese copycats the moment it became popular.
I'm working on a smart air quality monitor, I don't want competition with the Chinese either.
You really don't need ANY study to know the obvious thing that tariffs are taxes on imports. It is being paid by Americans from DAY 1. The only difference being American Companies were taking the brunt of it all and it is now obvious that they cannot keep swallowing it and will eventually pass it on to the American consumers.
It is crazy that so many in US STILL think tariffs are being paid for by exporting countries.
US is sabotaging itself and pushing in the same "New World Order" that the right-wing conspiracy nuts kept warning about but ironically have been instrumental in accelerating it themselves anyways.
Or maybe that was the design all along. To not go out in a whimper but with a big bang.
If I were the Democrats, I would do nothing and just let the US admin destroy whatever little credibility it has left on the World stage... thereby securing mid-terms and the next Presidential elections.
> If I were the Democrats, I would do nothing and just let the US admin destroy whatever little credibility it has left on the World stage... thereby securing mid-terms and the next Presidential elections.
Not a great idea. The US will have lost a lot of political goodwill by then. And given up a lot of geopolitical status and influence. The devices will be back in the saddle but have to resort to really unpopular measures to clean up the mess, basically guaranteeing a republican win afterwards.
And some credibility and influence will never recover. The rest of the world will remember there can always be another trump. And they will have switched to (and restarted) local industries. Once those are running there's no incentive to look at US ones again. And any geopolitical influence that was lost will already have been filled by other players who will entrench themselves.
> It is crazy that so many in US STILL think tariffs are being paid for by exporting countries.
They knew it was a lie then, and they know it's one now. A plurality of voters want what's happening currently, they're not crazy, it's just a mix of xenophobia, isolationism, and inbreeding.
The problem with that last is that if the Democrats do nothing, there's a very real chance that Trump deploys the military to either prevent the midterms from happening, or to force their outcome to be what he wants.
(Of course, if they do something there's still a chance he does that—they have to do the right thing and they have to do it well to reduce the chances by much!)
There's also that pesky matter of, y'know, their constituents. Who are getting bled dry by the stagflation that's happening.
> You really don't need ANY study to know the obvious thing that tariffs are taxes on imports. It is being paid by Americans from DAY 1. The only difference being American Companies were taking the brunt of it all and it is now obvious that they cannot keep swallowing it and will eventually pass it on to the American consumers.
I say they exact same thing to my liberal friends who endorse corporate tax increases, but they don't think it is obvious that companies will eventually pass it on to the American consumers.
I am checking conservative echo chambers from time to time and find it ridiculous that they always find a positive spin on all the obvious grifting and destruction that is happening around them. we are witnessing the downfall of an empire with our own eyes and can do absolutely NOTHING
I build homes and so am adjacent to many blue collar Trump fanatics, here's the thing I constantly hear;
> My tool for X used to cost $500 or $2000. The $500 was imported and good enough for me. I could never justify spending $2000 on the Made in USA version although it was very well built and I wanted it. Now, with tariffs, the import costs $1800, so it's easy for me to justify spending $2000 on the Made in USA option. Trump got me to buy American and support American manufacturing. Go MAGA!
It's strange how if the same economic condition existed due to a Biden (or any liberal presidents term) they surely would have been villainized for eliminating ANY lower cost option, increasing the cost of business (when tools cost more, everything they create costs more), and simply stealing food from people's families (as the $1500 extra he spent would have presumably remained in this contractor's profits in the pre-tariff reality not to long ago). It takes massive mental gymnastics to view this as beneficial and anything other than a direct tax on American consumers. The brain washing rhetoric of conservative media is an extremely powerful weapon.
Far from getting a break, you guys are paying tax on tax. You indirectly pay for import taxes every time your companies import raw materials needed to finish their goods (added value) and then that final value (cost of import + added value) has its own sales tax. AFAIK there are no input credits for US sales tax. Then you also have VAT but at least VAT is only on the added value.
Income tax is way better as you can reduce the tax burden by including expenses/deductions. You cannot do the same for tariffs, sales tax and VAT as an end consumer. VAT is only beneficial to businesses as they can subtract inputs from outputs.
It's like punching yourself in the face and then taking Tylenol for the pain until your friends do what you want. It's psychotic, doesn't work, and they're probably not going to want to hang out until you get some help.
Even with 90B in tariffs collected this fiscal year (since October) the government still spent 600B more than they collected.[1][2] Tax cuts would be great, but if you cut taxes without cutting spending you're just borrowing that tax cut from future generations. (270B of that 600B hole is interest payments on debt incurred by previous generations doing exactly that to us.)
Oh no no, we still have tax cuts for the wealthy, $800B in debt servicing, and $1T/year in military spending to pay for. The tariffs were a regressive tax to compensate for the tax cuts for the wealthy.
The only threat that works against Trump doing destructive things is to say to build a slightly bigger white house for Biden to feature him in a reality show and put him on the front page on a full page and Trump on a the second page at a half page.
There's a guaranteed fix, but no one is going to advocate for it: replace the dollar as the global reserve currency.
The replacement of the Bretton Woods system in the 1970s with the petrodollar, transformed the US from a creditor nation to a debtor nation, and shifted economic and financial incentives in ways that resulted in deindustrialization followed by trade imbalance.
If we want to reindustrialize, it's simple: de-dollarize the global reserve. The downside is that it affects the finance bros and the US's ability to apply economic pressure to achieve political outcomes on the world stage. If you think the benefits afforded in international politics outweighs deindustrialization, thats fine, but you can't have both.
Any such plan requires evicting the fascist grifters first, and rejecting these fake calls of "fiscal responsibility" that have been running interference for the past several decades. Then, proceeds from having the world reserve currency could be spent deliberately (re)building our industry rather than just being dumped into handouts for the rich.
But in a way the reelection of the New York conman was the final nail in the coffin assuring that this will never happen. The red tribe found it more appealing to turn their frustration inwards and attack our country rather than working with the blue tribe to constructively address these types of problems. And with the subsequent destruction of most everything that had made us a world leader, it's questionable whether we will even have the world reserve currency for much longer.
My boneheaded proposal is the opposite of Trump's approach: give the rest of the world coupons to buy made-in-USA products and machinery at a steep discount. Ship stuff to the rest of the world and ask nothing in return. Get the orders rolling in from around the world, pushing up economies of scale.
Of course, this will make American consumers much poorer on average, but boost production capacity. Sort of what China does.
Short Time Horizon for Data Analysis: The study relies on data from January 2024 to November 2025, covering only about 7-8 months after the April 2025 tariff announcements. This captures primarily short-run effects, where pass-through to import prices is often high (near 100%), but longer-term adjustments could lead to greater absorption by foreign exporters. For instance, studies of the 2018-2019 trade war, such as Amiti, Redding, and Weinstein (NBER Working Paper 26610, 2019), found that initial pass-through was complete but declined over time in sectors like steel (falling to around 50% after a year). The Kiel analysis may overstate long-term incidence on U.S. buyers by not accounting for delayed responses like supply chain reorganization or price negotiations.
Incomplete Data Coverage: The dataset from Panjiva includes only ocean-freight shipments (over 25.6 million transactions valued at $4 trillion), excluding air and land imports. This omission could bias results, as air freight often involves higher-value goods with different pricing dynamics, and land imports (e.g., from Mexico or Canada) might respond differently to tariffs. Broader U.S. import data from sources like the Census Bureau show that ocean freight accounts for a significant but not comprehensive share of trade, potentially skewing estimates of overall pass-through.
Reliance on Unit Values as Price Proxies: Import prices are measured as unit values (value per kg), which can be confounded by changes in product quality, mix, or shipping costs rather than true price adjustments. The authors acknowledge this as a potential issue and use validations like Indian FOB export data, but critics of similar studies (e.g., in the 2018-2019 trade war analyses by the U.S. International Trade Commission) note that unit values often overestimate pass-through by not distinguishing between price changes and compositional shifts. This could inflate the estimated 96% pass-through rate.
Weak Statistical Significance in Key Estimates: The baseline regression coefficient (β = -0.039) indicating 96% pass-through is only statistically significant at the 10% level, which is below conventional thresholds (5% or 1%) in economic research. This suggests the result may not be robust to minor specification changes or data noise, raising questions about the reliability of the claim that exporters absorb less than 4% of the burden.
Aggregation Masks Heterogeneity: The study reports an aggregate pass-through estimate but does not break it down sufficiently by product, country, or sector. Research on prior tariffs (e.g., Fajgelbaum et al., NBER Working Paper 25638, 2019) shows significant variation: undifferentiated goods like commodities may see more exporter absorption, while differentiated consumer goods exhibit fuller pass-through. By pooling data, the analysis may overlook these differences, leading to overly generalized conclusions.
Focus on Border Prices Without Retail Pass-Through Analysis: The paper examines pass-through at the border (to importers) but extrapolates to consumers bearing "nearly all the cost" without direct evidence on retail prices. Studies like Cavallo et al. (NBER Working Paper 26396, 2019) and the Federal Reserve Bank of Boston (Working Paper 19-12, 2019) find that while border pass-through is near-complete, retail pass-through is partial (around 50-80%), with retailers absorbing some costs through reduced margins. This gap could mean the study overstates the ultimate burden on end consumers, ignoring supply chain buffers.
WheatMillington|1 month ago
AnthonyMouse|1 month ago
The general premise of tariffs is that a foreign product costs e.g. $100 whereas a domestic product costs $120. If you then put a 50% tariff on the foreign product, it would cost $150, and then people would prefer the domestic product and only be paying 20% instead of 50%. Moreover, they might prefer the domestic product in general (e.g. higher quality and/or patriotism) and only buy the foreign product if it's actually less expensive, and then the foreign manufacturer would have to lower their price from $100 to $70 so that the tariff only raises the price to $105 because any higher price than that and they lose the business.
The result, in theory, is that you would pay $5 more rather than $50 more. Meanwhile the government collected $35 in tariffs on the foreign product, $30 of which came from the manufacturer rather than you, and that allows the government to lower your other taxes by $35 at the same level of government spending and borrowing.
There are essentially two things required for this to work in your favor on net: 1) the tariffs cause the foreign manufacturer to lower their pre-tariff prices at all, and 2) the government uses the tariff revenue instead of some other taxes they would have collected directly or indirectly from you, so that your net tax burden stays the same. It can also be some mix of these, e.g. the foreign manufacturer lowers their price by $10, you pay $15 in tariffs and get a $10 reduction in other taxes, and then you're ahead by $5.
Ironically, the primary way domestic taxpayers end up paying more is if the tariffs succeed in causing people to buy domestic products, because then there is no tariff revenue on the domestic products and people pay the higher price for the domestic products without a reduction in other taxes.
betaby|1 month ago
bdangubic|1 month ago
wolvoleo|1 month ago
ryan_lane|1 month ago
ArtemZ|1 month ago
As for tariffs, SmarterEveryDay has proven that we need them with his smart grill scrubber that got destroyed by cheap Chinese copycats the moment it became popular.
I'm working on a smart air quality monitor, I don't want competition with the Chinese either.
misnome|1 month ago
“This doesn’t belong here” is perfectly valid reaction to stuff covered on a million other sites.
hnburnsy|1 month ago
throw0101d|1 month ago
https://archive.is/lvQHh
1attice|1 month ago
unknown|1 month ago
[deleted]
kshri24|1 month ago
It is crazy that so many in US STILL think tariffs are being paid for by exporting countries.
US is sabotaging itself and pushing in the same "New World Order" that the right-wing conspiracy nuts kept warning about but ironically have been instrumental in accelerating it themselves anyways.
Or maybe that was the design all along. To not go out in a whimper but with a big bang.
If I were the Democrats, I would do nothing and just let the US admin destroy whatever little credibility it has left on the World stage... thereby securing mid-terms and the next Presidential elections.
wolvoleo|1 month ago
Not a great idea. The US will have lost a lot of political goodwill by then. And given up a lot of geopolitical status and influence. The devices will be back in the saddle but have to resort to really unpopular measures to clean up the mess, basically guaranteeing a republican win afterwards.
And some credibility and influence will never recover. The rest of the world will remember there can always be another trump. And they will have switched to (and restarted) local industries. Once those are running there's no incentive to look at US ones again. And any geopolitical influence that was lost will already have been filled by other players who will entrench themselves.
hypeatei|1 month ago
They knew it was a lie then, and they know it's one now. A plurality of voters want what's happening currently, they're not crazy, it's just a mix of xenophobia, isolationism, and inbreeding.
danaris|1 month ago
(Of course, if they do something there's still a chance he does that—they have to do the right thing and they have to do it well to reduce the chances by much!)
There's also that pesky matter of, y'know, their constituents. Who are getting bled dry by the stagflation that's happening.
hnburnsy|1 month ago
I say they exact same thing to my liberal friends who endorse corporate tax increases, but they don't think it is obvious that companies will eventually pass it on to the American consumers.
TruffleLabs|1 month ago
artemonster|1 month ago
neon_me|1 month ago
conductr|1 month ago
> My tool for X used to cost $500 or $2000. The $500 was imported and good enough for me. I could never justify spending $2000 on the Made in USA version although it was very well built and I wanted it. Now, with tariffs, the import costs $1800, so it's easy for me to justify spending $2000 on the Made in USA option. Trump got me to buy American and support American manufacturing. Go MAGA!
It's strange how if the same economic condition existed due to a Biden (or any liberal presidents term) they surely would have been villainized for eliminating ANY lower cost option, increasing the cost of business (when tools cost more, everything they create costs more), and simply stealing food from people's families (as the $1500 extra he spent would have presumably remained in this contractor's profits in the pre-tariff reality not to long ago). It takes massive mental gymnastics to view this as beneficial and anything other than a direct tax on American consumers. The brain washing rhetoric of conservative media is an extremely powerful weapon.
asterix_pano|1 month ago
ChrisArchitect|1 month ago
chaos0815|1 month ago
ahallock|1 month ago
kshri24|1 month ago
Income tax is way better as you can reduce the tax burden by including expenses/deductions. You cannot do the same for tariffs, sales tax and VAT as an end consumer. VAT is only beneficial to businesses as they can subtract inputs from outputs.
kelseyfrog|1 month ago
It's like punching yourself in the face and then taking Tylenol for the pain until your friends do what you want. It's psychotic, doesn't work, and they're probably not going to want to hang out until you get some help.
Ajedi32|1 month ago
[1] https://fiscaldata.treasury.gov/americas-finance-guide/gover...
[2] https://fiscaldata.treasury.gov/americas-finance-guide/feder...
hypeatei|1 month ago
toomuchtodo|1 month ago
jurschreuder|1 month ago
josefritzishere|1 month ago
like_any_other|1 month ago
[deleted]
nkmnz|1 month ago
techblueberry|1 month ago
kelseyfrog|1 month ago
The replacement of the Bretton Woods system in the 1970s with the petrodollar, transformed the US from a creditor nation to a debtor nation, and shifted economic and financial incentives in ways that resulted in deindustrialization followed by trade imbalance.
If we want to reindustrialize, it's simple: de-dollarize the global reserve. The downside is that it affects the finance bros and the US's ability to apply economic pressure to achieve political outcomes on the world stage. If you think the benefits afforded in international politics outweighs deindustrialization, thats fine, but you can't have both.
mindslight|1 month ago
But in a way the reelection of the New York conman was the final nail in the coffin assuring that this will never happen. The red tribe found it more appealing to turn their frustration inwards and attack our country rather than working with the blue tribe to constructively address these types of problems. And with the subsequent destruction of most everything that had made us a world leader, it's questionable whether we will even have the world reserve currency for much longer.
CamperBob2|1 month ago
Don't anthropomorphize the misguided missiles in the Trump administration. There is no teleology behind the tariffs, only chaos and grift.
mitthrowaway2|1 month ago
Of course, this will make American consumers much poorer on average, but boost production capacity. Sort of what China does.
hnburnsy|1 month ago
Short Time Horizon for Data Analysis: The study relies on data from January 2024 to November 2025, covering only about 7-8 months after the April 2025 tariff announcements. This captures primarily short-run effects, where pass-through to import prices is often high (near 100%), but longer-term adjustments could lead to greater absorption by foreign exporters. For instance, studies of the 2018-2019 trade war, such as Amiti, Redding, and Weinstein (NBER Working Paper 26610, 2019), found that initial pass-through was complete but declined over time in sectors like steel (falling to around 50% after a year). The Kiel analysis may overstate long-term incidence on U.S. buyers by not accounting for delayed responses like supply chain reorganization or price negotiations.
Incomplete Data Coverage: The dataset from Panjiva includes only ocean-freight shipments (over 25.6 million transactions valued at $4 trillion), excluding air and land imports. This omission could bias results, as air freight often involves higher-value goods with different pricing dynamics, and land imports (e.g., from Mexico or Canada) might respond differently to tariffs. Broader U.S. import data from sources like the Census Bureau show that ocean freight accounts for a significant but not comprehensive share of trade, potentially skewing estimates of overall pass-through.
Reliance on Unit Values as Price Proxies: Import prices are measured as unit values (value per kg), which can be confounded by changes in product quality, mix, or shipping costs rather than true price adjustments. The authors acknowledge this as a potential issue and use validations like Indian FOB export data, but critics of similar studies (e.g., in the 2018-2019 trade war analyses by the U.S. International Trade Commission) note that unit values often overestimate pass-through by not distinguishing between price changes and compositional shifts. This could inflate the estimated 96% pass-through rate.
Weak Statistical Significance in Key Estimates: The baseline regression coefficient (β = -0.039) indicating 96% pass-through is only statistically significant at the 10% level, which is below conventional thresholds (5% or 1%) in economic research. This suggests the result may not be robust to minor specification changes or data noise, raising questions about the reliability of the claim that exporters absorb less than 4% of the burden.
Aggregation Masks Heterogeneity: The study reports an aggregate pass-through estimate but does not break it down sufficiently by product, country, or sector. Research on prior tariffs (e.g., Fajgelbaum et al., NBER Working Paper 25638, 2019) shows significant variation: undifferentiated goods like commodities may see more exporter absorption, while differentiated consumer goods exhibit fuller pass-through. By pooling data, the analysis may overlook these differences, leading to overly generalized conclusions.
Focus on Border Prices Without Retail Pass-Through Analysis: The paper examines pass-through at the border (to importers) but extrapolates to consumers bearing "nearly all the cost" without direct evidence on retail prices. Studies like Cavallo et al. (NBER Working Paper 26396, 2019) and the Federal Reserve Bank of Boston (Working Paper 19-12, 2019) find that while border pass-through is near-complete, retail pass-through is partial (around 50-80%), with retailers absorbing some costs through reduced margins. This gap could mean the study overstates the ultimate burden on end consumers, ignoring supply chain buffers.
dur-randir|1 month ago
KevinMS|1 month ago