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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Author: ptheland 🐝  😊 😞
Number: of 84362 
Subject: Re: Tariffs and (are) hidden taxes
Date: 07/30/25 6:13 PM
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How does the foreign producer pay the tax?

To add a bit of detail to albaby's reply, the foreign producer "pays" a part of the tax by being forced to accept a lower price for their goods due to the tax. How much lower depends on the elasticities of supply and demand. When there is a tariff, the buyer always pays more per unit and the producer always gets less per unit (barring some edge cases where either supply or demand are essentially fixed), with the difference being the tariff. Moving into the real world, the importer and shipper might similarly be forced to accept a lower fee for their services because of the tariff. So the actual cost of the tariff can get split up among several parties.

--Peter
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This community has written 84,309 posts about US Policy. The article-length ones it recommended most:
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