Trump said foreign countries would 'eat' tariffs--but U.S. consumers and businesses will actually pay 75% at best

[Yo_Mama_Been_Loggin]

Goldman Sachs estimates U.S. consumers now shoulder two-thirds of President Trump’s new tariff costs, with more companies planning to pass them on in the future and foreign exporters refusing to “eat” the price hikes. The bank expects the measures to lift core PCE inflation (personal consumption expenditures) to 3.2% by year-end, adding pressure to the Fed’s 2% target.

When President Trump announced his tariff agenda, he said it would be foreign companies and consumers that would “eat” the price hikes. That’s a take that may be proved optimistic at best and misguided at worst.

While tariffs have yet to significantly shift the dial on inflation—prompting individuals like Treasury Secretary Scott Bessent to label them the “dog that didn’t bark”—analysts are widely expecting the hikes to ultimately be paid for by the U.S.

So far the sharpest end of the tariff regime has yet to be felt. President Trump delayed his “Liberation Day” tariffs by three months in order to reach agreements with trading partners.

https://finance.yahoo.com/news/trump-said-foreign-countries-eat-101540949.html

[sinkingfeeling]

1. Am I allowed to say, "Let him eat sh*t and die"?

[LymphocyteLover]

2. Yes, yes you are

[mdbl]

3. The only people getting money from the tariffs are the Dump administration's wasteful spending

on almost everything not pertinent to the survival of our country.

[Turbineguy]

4. Gee, trump lied.

[Bluetus]

5. I really appreciate the honest framing of this subject

Many on the left have taken the well-intentioned but ignorant position that "consumers pay all the tariffs." That is simply not true, and we gain nothing by insisting on that falsehood.

There are many cases where companies cannot pass along the tariffs because they face competitors that are not subject to tariffs for one reason or another. In those cases, the company either eats the tariff, negotiates with the manufacturer to split the pain, or simply stops selling that product. A clear case in point is Ford, which paid $800,000,000 in tariffs last quarter , causing them to operate at a loss. Some of those tariffs were on products where Ford competitors pay less (or no) tariffs) for a comparable product.

And there are other cases where there is no competitive disadvantage, but the higher cost is simply more than customers are willing to pay. In those cases (like above), the company eats it, negotiates with the supplier, or stops selling the product.

We should be totally honest about this, because all the outcomes are bad for Americans. If the tariff is passed to the consumer, that sucks. If the company or suppliers have to eat the tariffs, that also sucks because they will look for other ways to make up for those losses, raising prices on other goods, laying off workers, etc.

The important message is that NOTHING good comes from these tariffs in the near term. If our trade policies incentivized companies to manufacture in the US, that could be a long-term benefit, but that will take years in many cases. Moreover, there are ways to achieve that same result without dumping all this pain on American workers. For example, a trade policy could phase in tariffs, industry by industry, over a reasonable number of years that allow for production to be started in the US.

That would be sensible policy, and exactly the kind of thing that Biden did with the Chips act. But the Chips act is on hold now because companies like Intel can't trust the Trump administration. They don't want to commit billions of dollars to new domestic production, only to have Trump turn around and hold them up for extortion. That's where we are.

[JustAnotherGen]

6. Re This

The important message is that NOTHING good comes from these tariffs in the near term. If our trade policies incentivized companies to manufacture in the US, that could be a long-term benefit, but that will take years in many cases. Moreover, there are ways to achieve that same result without dumping all this pain on American workers. For example, a trade policy could phase in tariffs, industry by industry, over a reasonable number of years that allow for production to be started in the US.

It actually kills us who are ALREADY manufacturing in the USA but now have the added burden of onerous tariffs.

What's wrong with the Chapter Tariffs already in place? Nothing. But that's not sexy to the magapub extremist voters.

As well - the 301 (China Tariffs) were implemented in a phased approach. You know what his 'China' program does now? Slaps ANOTHER 10% on parts and components that cannot be resourced in the USA.

This 'rant' isn't directed towards you. I'm an LCB and Trade Compliance Officer at a US Manufacturer. The reality is that most Americans really do not understand CFR 19 or 15 - so here we are.

In pain.

[Bluetus]

7. Great information. Americans have a gut feeling this is all F-ed up

We need to reinforce that, not with the hysterical "CUSTOMERS PAY ALL THE TARIFFS", but with some basic education, such as you are spelling out here.

And we should start with our own elected Dems, none of who seem to have the slightest clue about any of this.

It really isn't that complicated or that hard to explain. We all want innovation, research, breakthroughs, entrepreneurship, and manufacturing to happen here withing the 50 states. That gives us the best future for generations to come. And Trump's policies are doing NONE of that. They are doing the opposite.

Rather than extorting companies like Apple, who will bribe Trump with a few million dollars and then just carry on exporting our wealth, we need trade policies that will give companies the incentives and the stability they need to invest in American-based operations.

Biden's CHIPS act did exactly this. Biden's Infrastructure bill had intentions of incentivizing American production of cars, but the way it was implemented really screwed companies like Hyundai/Kia, who were ALREADY making investments in American plants. So I would give Biden a B- on these policies. Trump is an F-, but he doesn't give a shit. It is all a grift for him. He isn't trying to help anybody but himself, so he would consider his policies an A+.

[JustAnotherGen]

8. Take a look at the

Build America, Buy America Act from the Biden Admin.

He was moving manufacturers towards 50% or great sourced components if we were building for infrastructure.

Krasnov kicked us all in the teeth.

In terms of Global Supply Chain / Trade - the best of the Presidents and US Trade Reps I've completed my work under was Biden/Katherine Tai.

They had their shit together and knew what they were doing.

[Bluetus]

11. Yes, the Build America, Buy America Act

(which was part of the Infrastructure Bill) was outstanding. It was good policy. The only problem is that nobody sold this to the public. Biden spent so much time inside the Beltway, the concept of selling ideas all across America just didn't register with him.

That was a populist bill in its substance. If Biden (and Dems in general) had really sold this hard as a populist idea, I believe Harris would have won. And if she didn't win, at least the public would be more aware of the damage Trump is doing now.

Marketing is just as important as manufacturing, so to speak. In this case, they manufactured a good product (Build America, Buy America Act) but didn't market it.

We really do have to sell bold ideas to the public.

[JustAnotherGen]

12. Public idea

Or B2B?

Its very much in play. Krasnov hasn't killed it yet. Whew.

[cstanleytech]

9. It's a tax on Americans.

[Picaro]

10. Again, the exporting country doesn't pay the tariffs

Why is this so hard?

He really can’t make reality change because he says so. No matter how many times he repeats the same lie it doesn’t become true.

Could our press stop reporting nonsense without pointing out that it is nonsense?

This story got it right, but there were so many that just repeated his nonsense verbatim.