Let's talk about Trump's tariffs continuing to cost you after they're gone.... - Belle of the Ranch

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about Trump's tariffs continuing to cost you after they're gone.

It's official now. The US government is admitting that Americans are paying for the tariffs. The New York Fed put out a report saying that depending on what period in time you're looking at last year, Americans paid somewhere between 86 and 94% of the tariffs. In short, if you believe that foreign countries were paying for you, Trump tricked you. Every economist said this is what would happen.

A tariff's whole job is to raise prices in the country imposing it. That's why widespread tariffs are bad. But now we've got a question that's probably pretty important to address because the politicians will likely mislead you about this later. "Even if tariffs were cancelled today, prices would not come back down to pre-tariff levels due to price stickiness. Do I have that right? If that is correct, then why would it even matter to the average person if the tariffs get removed or not? Considering the prices we pay aren't going to come down one way or another.”

First, yes, you have that right. Price stickiness is real and it will definitely be at play here. There will be a video below for more information, but the short version is you already told companies you're willing to pay this much.

So, why does it matter? Let's say that currently US company Unlimited Imports is buying a box of widgets for 100 bucks in country X. They import them and pay a 50% tariff. So, the box of widgets, it's 150 bucks. By the time it gets to the retailer and you're paying the price, it's 300 bucks. If the tariff goes away, the retailer is probably still going to charge you $300 because you've shown all this time that you'll pay. But the US company saves money and the retailer makes more money. Maybe they open more stores, put more people to work, or give their employees a raise. Okay, that last one was a stretch, but they'll probably need more workers.

It's not a surprise that Trump's first year was so horrible when it comes to jobs. Companies having an unexpected increase in tariff-related expenses didn't help. So, there's a benefit to the average person there.

But back to the original example, let's say country X gets hit with some runaway inflation. So instead of a hundred bucks per box of widgets, it's $200. Now when the US company gets hit with the 50% tariff, the box is $300 before it ever leaves the port. By the time it gets to the retailer, it's probably doubled. So $600 final price instead of $300. Trump's genius economic policies tied your prices for every imported good or thing made with imported goods to not just that country's inflation, but that country's inflation plus his tariff.

There's no safe way to unwind the price hikes Trump already caused you. But ending the tariffs would end future ones. It's also worth remembering that the tariffs haven't fully passed through to the consumer yet. Even if ended today, we'll still be paying additional Trump taxes for a while.

Anyway, it's just a thought. Y'all have a good day.