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Comment by SoftTalker | Hacker News Reader

Pretty much every tax is ultimately paid by the consumer, because all the suppliers have to make a profit or they won't stay in business. The point of an import tariff isn't to make anything cheaper, it's to level the market in the presence of a foreign supplier who has much lower costs (e.g. sweatshop labor, state-supported industry, etc.) that are not available to domestic suppliers.

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The problem is that the tariffs are so broad in ways that don’t help US industry; and there are few supply chains wholly within the US so you end up hurting US manufacturing as well.

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.

Several species of vanilla are indigenous to Puerto Rico. Indeed, Puerto Rico used to be the ninth largest vanilla producer in the world.

Vanilla will happily grow in parts of Florida and the USVI as well.

So that's the goal?

Onshore vanilla production, now cheaper than Madagascar given the 47% tariff? No wait; the tariff was reduced to 10%, maybe 15? Something.

It seems doubtful considering the immense labor cost of vanilla production combined with the persecution of people most willing to do those jobs.

Given the current discourse around recent events involving Puerto Rico I highly doubt encouraging things there is the intended point of anything.

If the supplier is forced to leave the business, that is a form of paying. They are losing a source of income and will have to pick a different activity that they are not efficient at. In the case of tariffs on international trade, the supplier loses a chunk of market - in the case of the US, one that was wealthy - and that always means a loss for the business.

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.

I would love to see joint tarrifs, together with US allies, to fight against things like sweatshop labor, state-supported industry, etc. That would really send a signal that those things are unacceptable, and lead to change.

That's not what we have here, and that's not what the Trump tarrifs are perceived as internationally.

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