Tariffs are providing significant revenue to the Treasury, 80% of which is paid by foreign governments and corporations while providing incentives to create jobs here in the US. In other words, a hime run.
Looks like the other comments read a different article or have TDS. LOL!
I generally find the victory laps from the pro-Trump-tariff crowd pretty hilarious. They always fall into one of three categories:
1. “Look at how much revenue!” — oh, we’re pro-tax now?
2. “They said the economy would implode, and it hasn’t!” — Not crashing the economy is not, in and of itself, an accomplishment.
3. “The incidence actually falls on foreigners!” — I thought the *whole point* was to use tariffs as industrial policy to re-industrialize the U.S. economy. If foreigners eat the tariff, the problem (too expensive to manufacture here) remains, and we don’t even get the benefit of foreign manufacturing (lower prices) or increased tax revenue.
Fundamentally, it’s all just dancing on the graves of doomsayers (which is fair) and ignoring the irony that we’re celebrating the stated goals *very clearly* not being accomplished (which is dumb).
1/ The government needs revenue, lmao. Where do you think it comes from?
2/ who cares, no implosion—fine that is status quo
3/ So, the tariffs would be successful if more of the incidence fell on American consumers, in your view?
None of your criticisms are actually based in anything. I thought the tariffs would be astonishingly bad, I do not and never have supported Trump, but even I can recognize that they are acting in deeply unexpected ways that on the whole are actually beneficial to the country.
1. Celebrating taxes is an unusual position to take for people who are typically conservative.
2. n/a
3. Yes. That’s literally point — import substitution industrialization, use tariffs to reshore manufacturing. The only way that can happen is if the incidence falls on Americans (either importer or final consumer). If it doesn’t, the price has not changed and U.S. manufacturing has not become relatively more competitive. If Americans don’t feel the pain, they will not change their behavior.
So all we’re doing is celebrating a slight narrowing of the deficit via higher taxes (laudable, but decidedly not the stated aim) and not crashing the economy. Great job!
exactly. so we don't have money to keep anything afloat. according to the govt officials, not even to properly fund snap medicare or medicaid which is pennies compared to pentagon. and yet... where is all this "trillions of revenue" we keep hearing about ?
Long article to say that manufacturers and businesses are eating as much of the tariffs for now. Obviously, they can’t do that forever. So it will be us. It’s already started. So tell me again why economists are shocked. All the local businesses in our town are eating as much as they can but…. Not much longer.
I love the comments. It’s a tax on consumers! (Not a word about the 80% of tariff revenue eaten by foreign companies). It’s never going to last! (Said the same people predicting immediate inflation last April). Get back to me next year! (By the gloom and doomers predicting retaliation six months ago). It just seems like invalidated theory will always trump empirical data in the closed minds of ideologues.
Who pays tariffs? The answer lies in who the government actually collects them from: the importers. Whether the importers pass those along to consumers is up to them and market dynamics. We may still see that happen, and already are in some markets.
To make your diagnoses hold up, one or both of two things have to happen: either foreign exporters have to lower their prices, or they suffer from reduces sales. Data from the government indicates that pre-tariff prices, those upon which the tariff is calculated, have not fallen. So, your observation must be due to a drop in sales. Yet, you never mention that.
In no case, however, does a foreign company hand over cash to the government, so they are NOT paying tariffs. If the exporter is also the importer, such as Toyota bringing in a car to sell, the import side still pays the tariff on this side of the supply chain.
If you were paying attntion in your international trade class, you would recall that the theory of the "optimal tariff" (one that takes advntage of a large country haing a certain monopsonistic market power in some markets) is a thing. Orthodox economists are pretty skeptical that the government would be able to cleverly expoit this, but the theoretical possibility cannot be ruled out. If it turns up in German exports of automobiles to the US no economis would be shocked.
The author is engaging in magical, white hat thinking to “prove” a point. Two quarters of tariff effect is too short a time frame to “prove” anything. All I can say is I’ll put my money on US consumers paying more. No such thing as a free lunch.
The idea that “textbooks predicted” 100% passthrough to consumers simply isn’t serious. No textbook says that. What they do say is that the incidence of any tax depends on relative elasticities of supply and demand. That means the burden is shared, and the split can vary widely. I think it's plausible that if you'd polled economists about how much passthrough we'd see, the mean point estimate would have been more than 20%, but it would have been a lot less than 100%. And there's still a lot of uncertainty about the tariff regime, which lowers passthrough, at least in the short run. Firms often smooth temporary shocks—absorbing losses if they think the regime might change, exemptions might be granted, or retaliatory tariffs might be negotiated away. But that’s not sustainable indefinitely. So I wouldn't be surprised if we saw higher than 20% passthrough a year from now, assuming something roughly like the current regime stays in place. (One big source of uncertainty which firms may be waiting out: SCOTUS!)
Second, a recurring issue in pieces like this is the move from a strong claim about a broad trend—“we’re already seeing a huge rise in investment in American manufacturing”—straight to a handful of anecdotal examples. That’s not how you establish a trend. You need to look at aggregate data. And on that front, as far as I can tell, real investment in manufacturing structures is actually down in 2025 relative to 2024, though still quite high: https://fred.stlouisfed.org/series/C307RX1Q020SBEA?utm.
In a big country with lots of companies, it will always be possible to identify examples that illustrate any trend you like, including nonexistent ones. If you want to make a good faith case to skeptical readers, you should point to aggregate data. Even better, call your shot: identify some aggregate statistics that you'll come back to in two or three years that you'll agree will constitute a good test of the policy.
Most of these, obviously TDS based, comments amount to either I'm going to ignore the facts you presented or, so what if Trump is right so far he won't be for long and even if he is it won't make any difference!
Trump imposed tariffs for a very good reason which was to stop the hollowing out of US industry which had reached the point where our industrial base could no longer even support our shrunken military while we are under grave threat from enemies, particularly China. Do all you scoffers have any answer for this?
So far what Trump has done is obviously working and you just hate him so much you won't allow yourself to see it's working. Wake up.
so why are at least 3 local business owners around here suffering? 1 woman is closing up shop entirely the other two are in bare bones survival mode and are hoping and praying something changes in 6 months. one woman had to close up her online shop - no longer sustainable bc she couldn't important the material (cloth or textile or sthg). costs of importing anything made her business drown.
This article reminded me of the “transitory” debate about inflation during the Biden admin. It’s good news, but you might be declaring victory too early
I’m not an economist, and I’m really bad with numbers, but I don’t see how companies who lower their prices or have their prices subsidized by their government, end up paying for the tariffs. The tariffs are based on the price of goods at the border. Now, perhaps we pay less because of the lower prices, but the money saved because the companies lowered their prices does not go into our treasury, does it?
Tariffs are providing significant revenue to the Treasury, 80% of which is paid by foreign governments and corporations while providing incentives to create jobs here in the US. In other words, a hime run.
Looks like the other comments read a different article or have TDS. LOL!
So where’s all that revenue that the administration touts coming from?
And if foreign manufacturers eat the tariff, how does U.S. manufacturing become more competitive relative to the foreign firms?
I generally find the victory laps from the pro-Trump-tariff crowd pretty hilarious. They always fall into one of three categories:
1. “Look at how much revenue!” — oh, we’re pro-tax now?
2. “They said the economy would implode, and it hasn’t!” — Not crashing the economy is not, in and of itself, an accomplishment.
3. “The incidence actually falls on foreigners!” — I thought the *whole point* was to use tariffs as industrial policy to re-industrialize the U.S. economy. If foreigners eat the tariff, the problem (too expensive to manufacture here) remains, and we don’t even get the benefit of foreign manufacturing (lower prices) or increased tax revenue.
Fundamentally, it’s all just dancing on the graves of doomsayers (which is fair) and ignoring the irony that we’re celebrating the stated goals *very clearly* not being accomplished (which is dumb).
1/ The government needs revenue, lmao. Where do you think it comes from?
2/ who cares, no implosion—fine that is status quo
3/ So, the tariffs would be successful if more of the incidence fell on American consumers, in your view?
None of your criticisms are actually based in anything. I thought the tariffs would be astonishingly bad, I do not and never have supported Trump, but even I can recognize that they are acting in deeply unexpected ways that on the whole are actually beneficial to the country.
1. Celebrating taxes is an unusual position to take for people who are typically conservative.
2. n/a
3. Yes. That’s literally point — import substitution industrialization, use tariffs to reshore manufacturing. The only way that can happen is if the incidence falls on Americans (either importer or final consumer). If it doesn’t, the price has not changed and U.S. manufacturing has not become relatively more competitive. If Americans don’t feel the pain, they will not change their behavior.
So all we’re doing is celebrating a slight narrowing of the deficit via higher taxes (laudable, but decidedly not the stated aim) and not crashing the economy. Great job!
The article answers both questions in detail. Try reading it first.
exactly. so we don't have money to keep anything afloat. according to the govt officials, not even to properly fund snap medicare or medicaid which is pennies compared to pentagon. and yet... where is all this "trillions of revenue" we keep hearing about ?
Long article to say that manufacturers and businesses are eating as much of the tariffs for now. Obviously, they can’t do that forever. So it will be us. It’s already started. So tell me again why economists are shocked. All the local businesses in our town are eating as much as they can but…. Not much longer.
I love the comments. It’s a tax on consumers! (Not a word about the 80% of tariff revenue eaten by foreign companies). It’s never going to last! (Said the same people predicting immediate inflation last April). Get back to me next year! (By the gloom and doomers predicting retaliation six months ago). It just seems like invalidated theory will always trump empirical data in the closed minds of ideologues.
American consumers pay higher *prices* because of tariffs (taxes). Foreign firms lose profit because of *lower sales* (due to these higher prices)
Tariffs, like all taxes, are lose-lose. This is and always has been what economists and anyone with half a brain said.
Now that what economists said was gonna happen IS actually happening, youre pretending like they said something different
Dumbass.
Who pays tariffs? The answer lies in who the government actually collects them from: the importers. Whether the importers pass those along to consumers is up to them and market dynamics. We may still see that happen, and already are in some markets.
To make your diagnoses hold up, one or both of two things have to happen: either foreign exporters have to lower their prices, or they suffer from reduces sales. Data from the government indicates that pre-tariff prices, those upon which the tariff is calculated, have not fallen. So, your observation must be due to a drop in sales. Yet, you never mention that.
In no case, however, does a foreign company hand over cash to the government, so they are NOT paying tariffs. If the exporter is also the importer, such as Toyota bringing in a car to sell, the import side still pays the tariff on this side of the supply chain.
If you were paying attntion in your international trade class, you would recall that the theory of the "optimal tariff" (one that takes advntage of a large country haing a certain monopsonistic market power in some markets) is a thing. Orthodox economists are pretty skeptical that the government would be able to cleverly expoit this, but the theoretical possibility cannot be ruled out. If it turns up in German exports of automobiles to the US no economis would be shocked.
The author is engaging in magical, white hat thinking to “prove” a point. Two quarters of tariff effect is too short a time frame to “prove” anything. All I can say is I’ll put my money on US consumers paying more. No such thing as a free lunch.
The idea that “textbooks predicted” 100% passthrough to consumers simply isn’t serious. No textbook says that. What they do say is that the incidence of any tax depends on relative elasticities of supply and demand. That means the burden is shared, and the split can vary widely. I think it's plausible that if you'd polled economists about how much passthrough we'd see, the mean point estimate would have been more than 20%, but it would have been a lot less than 100%. And there's still a lot of uncertainty about the tariff regime, which lowers passthrough, at least in the short run. Firms often smooth temporary shocks—absorbing losses if they think the regime might change, exemptions might be granted, or retaliatory tariffs might be negotiated away. But that’s not sustainable indefinitely. So I wouldn't be surprised if we saw higher than 20% passthrough a year from now, assuming something roughly like the current regime stays in place. (One big source of uncertainty which firms may be waiting out: SCOTUS!)
Second, a recurring issue in pieces like this is the move from a strong claim about a broad trend—“we’re already seeing a huge rise in investment in American manufacturing”—straight to a handful of anecdotal examples. That’s not how you establish a trend. You need to look at aggregate data. And on that front, as far as I can tell, real investment in manufacturing structures is actually down in 2025 relative to 2024, though still quite high: https://fred.stlouisfed.org/series/C307RX1Q020SBEA?utm.
In a big country with lots of companies, it will always be possible to identify examples that illustrate any trend you like, including nonexistent ones. If you want to make a good faith case to skeptical readers, you should point to aggregate data. Even better, call your shot: identify some aggregate statistics that you'll come back to in two or three years that you'll agree will constitute a good test of the policy.
Most of these, obviously TDS based, comments amount to either I'm going to ignore the facts you presented or, so what if Trump is right so far he won't be for long and even if he is it won't make any difference!
Trump imposed tariffs for a very good reason which was to stop the hollowing out of US industry which had reached the point where our industrial base could no longer even support our shrunken military while we are under grave threat from enemies, particularly China. Do all you scoffers have any answer for this?
So far what Trump has done is obviously working and you just hate him so much you won't allow yourself to see it's working. Wake up.
so why are at least 3 local business owners around here suffering? 1 woman is closing up shop entirely the other two are in bare bones survival mode and are hoping and praying something changes in 6 months. one woman had to close up her online shop - no longer sustainable bc she couldn't important the material (cloth or textile or sthg). costs of importing anything made her business drown.
Maybe Adam Smith was wrong in regards to retailers being productive labor?
Get back to me in a year and we'll see if this argument still holds. If it does, I'll start to believe. As of now, I have my doubts.
This article reminded me of the “transitory” debate about inflation during the Biden admin. It’s good news, but you might be declaring victory too early
I’m not an economist, and I’m really bad with numbers, but I don’t see how companies who lower their prices or have their prices subsidized by their government, end up paying for the tariffs. The tariffs are based on the price of goods at the border. Now, perhaps we pay less because of the lower prices, but the money saved because the companies lowered their prices does not go into our treasury, does it?