These tariffs have a huge red flag because there's no objective. Onshoring? No, wait, we got a new deal the tariffs are removed. New trade deals? No, wait, somebody wrote a mean Tweet about Donald so the tariffs are back and the deal is off.
In the current political climate nothing is certain - but this will likely come to a resolution in the near term.
You have to punish anyone supporting this insanity.
And if the cost if lives or dollars or reputation is enormous, he'll still sleep like a baby.
These tariffs are arbitrary and capricious and no business would rationally respond to them with any kind of long term investment. People just want to weather the storm of the mad king and international partners are developing alternative relationships to seek more stability.
Tariffs do produce immediate market effects - inflation and shortages, which we do observe.
In order to produce positive market effects tariffs must be gradual, differentiated, measured, negotiated and communicated well in advance.
That's not what we have here, and that's not what the Trump tarrifs are perceived as internationally.
It doesn’t really make sense, for example, that we slapped tariffs on Madagascar, when the primary reason we run a trade deficit with them is that they grow vanilla which cannot be grown in the US.
Vanilla will happily grow in parts of Florida and the USVI as well.
Onshore vanilla production, now cheaper than Madagascar given the 47% tariff? No wait; the tariff was reduced to 10%, maybe 15? Something.
The burden of ALL taxes falls on both sides of the transaction. The proportion of the burden varies with market conditions, the most important being elasticity.
That's why studies like the OP are necessary, to determine how much the proportions are. Honestly I am not surprised with the result, tariffs are objectively bad. Curbing trade is bad by default.
It could've passed on the tax to the consumer, but it didn't. It has ceased making its iconic beverage and now only sells a variant that tastes crap. No amount of money can bring the good stuff back. The sugar tax killed it. The world is now a slightly worse place, thanks to government interference.
(I'm sure there's a way to extrapolate this anecdote back to tariffs)
The government has a variety of aims and objectives. Certainly, shooting for a more healthy population is good. Convincing those that drink a lot to drink less would be one way. Permanently making the drinks awful for the entire population, no matter how many or few they drink, and ensuring what was once good never ever comes back... is another way.
The government set out to reduce consumption of high-sugar drinks. They had choices on how to do that e.g. they could've targetted demand. They chose to target supply with a "sin tax".
Private companies then, for no reason whatsoever, of their own free will, decided to eliminate high-sugar drink options. They would not have done so had the government not imposed the tax. If you then blame the government for their action, they'll want to say "oh I only set the tax", despite knowing they set the tax intentionally to engineer this outcome.
https://www.theguardian.com/business/2018/jan/05/irn-bru-dri...
> The reduction in Irn-Bru’s sugar content from 8.5 teaspoons to four, taking a can from just under 140 calories to about 65 calories
The old (2018) Irn-Bru had about 35g of table sugar per 330ml, it now has 14.85g. Coca-Cola has 35g, Pepsi has 15g. Both those multinational companies still sell their full-sugar drinks, at a much higher price with the sugar tax applied, though they also sell sugar-free alternatives (Max, Zero), as does Irn-Bru (Xtra). Coke and Pepsi have a much larger sales volume and can afford to make less sales on their full-sugar product, and keep them in their product line-up. I don't think Irn-Bru can.
The UK government ruined Irn-Bru. I still drink as much as I normally do, which is about 12 litres a year; I am well under the intended beneficiary of this war on sugar, the sort of people who drink >100 litres a year, but when I do have it, it now tastes of sadness and lamentations for better times in the past, and I just feel anger for those who wrecked it for everybody.
It sounds like Irn-Bru was only viable _because_ of the sort of people who drink >100 litres a year. You were benefitting from that viability thanks to the very people you admit were being targeted by the tax. If they had stopped their high consumption for some other reason, availability of the original Irn-Bru would have suffered the same result due to the same drop in demand. The tax isn’t directly to blame here. The direct cause is the original motivation itself, regardless of how it was implemented. Considering only this specific example you cannot reject the tax without also rejecting the motivation.
I think you've got that back to front. A higher price reduces demand. There is still the capability to supply, but the demand is no longer there.
It looks like they reintroduced the original recipe in 2021 (and previously as a limited release in 2019), under the name Irn Bru 1901. Or does that version still differ from the version of Irn Bru the low-sugar Irn Bru replaced?
The 1901 recipe has 11g sugar per 100ml. Also it lacks caffeine.
The 2017 recipe had 35g sugar per 100ml.
The 2018 recipe has 4.5g sugar per 100ml.
The sugar tax is £0.18 per litre for 5-8g sugar per litre, and £0.24 per litre for >8g sugar per litre.
Irn-Bru has many price points depending on form factor and location, but a 2 litre bottle today typically costs £2.10. The sugar-free variant costs the same. If the full sugar tax applied, it'd cost £2.68 (22.8% higher price).
Coca-Cola is so expensive with the tax, they don't even sell it in 2 litre bottles anymore, just 1.75 litre bottles. Coca-Cola "Original Taste" is £2.55 for 1.75l (£1.46/l) while Coca-Cola Zero is £2.15 for 2l (£1.08/l), a difference of £0.38 per litre, of which £0.24 is sugar tax.
Businesses like to say that, to get consumers to back them politically, but it's not at all true:
When input costs increase, a seller must decide whether to take the extra expense out of their profit or to increase the price (or some mix of the two).
Taking the extra cost out of their profit obviously decreases profit.
Raising the price decreases sales (consumers won't buy as much at a higher price), which decreases profit. The change is not linear (look up demand curves). The seller, if they are smart, already found the price that maximizes revenue. Therefore changing the price will reduce revenue.
In reality, it's not such a science and there are other factors. Another fundamental factor is price elasticity of demand, which is how much a change in price affects demand. For sugary drinks, quite a bit - people can forgo them. For lifesaving healthcare, elasticity is less, for obvious reasons.
It's always kind of enlightening to see exactly what things businesses choose to explicitly pass on to the customer, and what things they just eat as a cost of doing business. It's often very political and performative.
Some restaurants in California have taken to adding a "Living Wage Fee" to restaurant bills as a way to protest having to pay their employees proper wages. They could have just eaten the cost and raised their food prices slightly, but instead they chose the passive-aggressive route, complaining about it via the bill, which the customer sees. Presumably to try to convince the customer that "Living Wage" politics are bad and that they visibly raise the price the customer pays.
But, when the county raises their property taxes, the same restaurants just eat the cost. They don't add an "Unfair Property Taxes" line item to their diners' bills.
Yet that's not what the administration says about the subject. They're either confused or they're lying (and the people who support them and regurgitate their talking points are confused).
The belief that they are confused is a generosity that we should really be disabused of at this point.
Like, even the propaganda by fascists claiming fascism makes for good policies is bad. Germany under the Reich, completely setting aside the human atrocities, was a fucking SHIT SHOW of a nation state.