No. of Recommendations: 3
There has been a fair amount of research into the impact of these types of taxes on black or grey market activity. If the tariff is too high, these markets will develop, bypassing the tariff. The risk of the illegal activity is offset by the financial gain.
In addition, it is certain that companies will adjust their supply chains to minimize the tariff impact. Many products touch several countries before reaching the final consumer. If it is expensive to move components into the US, it is more likely they will ship those elsewhere for assembly into the final product.
Also, repeating that the tariffs are a new tax on the poor and middle class.
Alan
