Quote (Bruv @ Dec 14 2024 05:59pm)
Tarriffs don't affect the exporter. Only the importer.
You really won't be using it for political bargaining
Here's what's happening and what's going to happen
What has happened:
1. Companies have raised their prices in anticipation of cost increase.
2. Companies have burned through reserve cash to purchase products at prices that are still low
3. Say goodbye to your christmas bonus
What will happen:
1. Companies will bludgeon Asia exporters into lowering their prices to offset costs or lose the volume
2. Companies will increase their margin
3. Consumer prices will not go down
2 things to keep in mind
Western companies love profit
Eastern companies like volume
Tariffs artificially raise the price of a product. The equilibrium between supply and demand is disrupted, with the government extracting rent from everyone involved. Higher prices means consumers purchase less and pay more, fewer purchases puts pressure on the exporter's margins.
Countries don't hate opposing nation tariffs because it doesn't impact them, they hate them because it does. When the United States taxes imports the tax is paid both by the importer and the exporter, and passed up and down the supply chain.
You seem to be acknowledging this in your second point, but that's also wrong. For corporations to net 100% of the profit, there must be both inelastic supply and inelastic demand (on the part of the exporter and consumer respectively). The exporter must be willing to sell more at the same price, and consumers must be willing to pay more for the same supply. If that's the case there's nothing stopping corporations from raising prices right now. The question of tariffs is irrelevent.