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.
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