President Donald Trump says he's imposing a 100% tariff on computer chips— a move that raises the specter of higher prices for electronics, autos, household appliances and other essential goods that depend on the processors.
What do you mean “likely pushing up cost of electronics”. That is the literal point of a tariff, to push the prices up and make competing goods more appealing to consumers. The only way it doesnt raise prices is if importers just eat the cost, which they will almost certainly not do and, frankly, shouldn’t do.
I’ll throw in the “well actually” here so no one gets wrapped around the axle — the true point of tariffs are to boost domestic business at the expense of weakening foreign sales. The scales tipped in favor of domestic businesses should be advantageous and arguably a good strategy in some circumstances …in a vacuum. That’s the “well actually” and it’s worth nothing in 2025 because all advantage is nullified if those domestic businesses lack the skill and resources to produce said goods. The industries currently targeted by tariffs are so huge and complex that domestic businesses stand zero chance (even with tariffs) in place to replicate the technology, supply chain, and workforce that would be able to stand competitively toe-to-toe with the global market.
So it’s entirely a tax on Americans by another name, and for zero gain.
Damn, if only we had some bill that would increase manufacturing of chips domestically. It would be foolish to cancel such a bill while also creating a tariff. How will people favor domestic manufacturing without that manufacturing existing? Surely the president would never do that.
Yes, I did mean in the ideal sense, there is a functional purpose for raising the prices of foreign goods IF there is a domestic alternative you wish to boost or expand. But the mechanism for the benefit, IF(big if) there is one, is the increase in price. Tariff (ideally) equals targetted price increases. Saying tariffs might raise prices is like saying stabbing you might wound you. I might have a good reason for wounding you, I might not, but the wounding will happen as a direct consequences of my stabbing you, regardless.
The important won’t eat the costs because there’s literally no reason for them to do that.
The tariffs don’t actually upset shipping companies, they literally do not care. They continue to sell the product at exactly the same prices it always cost, once it arrives in a US port, that’s the end of the transaction as far as they are concerned, since the tariffs apply after that, they are irrelevant.
What do you mean “likely pushing up cost of electronics”. That is the literal point of a tariff, to push the prices up and make competing goods more appealing to consumers. The only way it doesnt raise prices is if importers just eat the cost, which they will almost certainly not do and, frankly, shouldn’t do.
I’ll throw in the “well actually” here so no one gets wrapped around the axle — the true point of tariffs are to boost domestic business at the expense of weakening foreign sales. The scales tipped in favor of domestic businesses should be advantageous and arguably a good strategy in some circumstances …in a vacuum. That’s the “well actually” and it’s worth nothing in 2025 because all advantage is nullified if those domestic businesses lack the skill and resources to produce said goods. The industries currently targeted by tariffs are so huge and complex that domestic businesses stand zero chance (even with tariffs) in place to replicate the technology, supply chain, and workforce that would be able to stand competitively toe-to-toe with the global market.
So it’s entirely a tax on Americans by another name, and for zero gain.
In the US the point of tarrifs is to tax the poor to pay for tax breaks for the rich.
Bingo, this is just a way of raising taxes on the poor without “raising taxes”.
CPUs are so expensive, I guess I’ll buy a good old US made abacus instead!
Damn, if only we had some bill that would increase manufacturing of chips domestically. It would be foolish to cancel such a bill while also creating a tariff. How will people favor domestic manufacturing without that manufacturing existing? Surely the president would never do that.
Now to figure out how to play Doom on it.
In this case there are no competing domestic products though, or few enough as makes little difference. This is just taxation with extra steps.
Yes, I did mean in the ideal sense, there is a functional purpose for raising the prices of foreign goods IF there is a domestic alternative you wish to boost or expand. But the mechanism for the benefit, IF(big if) there is one, is the increase in price. Tariff (ideally) equals targetted price increases. Saying tariffs might raise prices is like saying stabbing you might wound you. I might have a good reason for wounding you, I might not, but the wounding will happen as a direct consequences of my stabbing you, regardless.
Every American needs to be forced to learn the components of a supply and demand diagram.
The important won’t eat the costs because there’s literally no reason for them to do that.
The tariffs don’t actually upset shipping companies, they literally do not care. They continue to sell the product at exactly the same prices it always cost, once it arrives in a US port, that’s the end of the transaction as far as they are concerned, since the tariffs apply after that, they are irrelevant.