Quote:
Originally Posted by paredown
Tariffs are (as they have always been) taxes paid by consumers. Jack the tariff, it becomes a price floor that either directly contributes to higher prices for a particular good, OR it becomes a wall behind which domestic companies can charge higher prices for domestically produced substitutes and encourages inefficiencies--along with higher prices for consumers. Case in point--the infamous 25% tariff that protects domestic truck manufacturers from foreign competition.
Krugman's recent Times column is good--and the study he cites. (I believe there was a second study in the past week or so....)
https://www.nytimes.com/2019/03/03/o...trade-war.html
Net effects are the same--people have less money in their pockets after purchasing the same bundle of goods--so the real costs are the costs of the foregone alternative--what else might they have spent their money on to stimulate demand? |
Oh, we agree here but C59 was asking about the tariffs effect on the market and that was my focus. The tariffs are few and targeted and indeed hurt consumers and certain segments as I mentioned before. But the market has been hampered by them but as to C59's point, the market has generally chugged along. The reason for that is what I posted above, both parties have publicly stated they want this to end and markets harmed are theorized to recover.
The fact that Mainstreet coughs while Wall Street sneezes is unfortunately a long held truism.