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They don’t sit until the President says they can. He never did.

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I’m sure he’ll stand up to the President and fight back against this unconstitutional travesty.

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For the record, this is exactly what conservatives would NORMALLY say when things like tarriffs are brought up. Normally, folks like Bernie are the guys suggesting trade tarriffs.

Conservatives who are backing this crap now have essentially no principles at all.

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Since we’re being all “lets get the facts straight”, a 20% tariff on Mexican imports does not mean that the prices on Mexican imports will increase by 20%. The economy is dynamic not static, meaning firms are free to change their pricing after the tariff is introduced. Inevitably some portion is passed onto the consumer and some by the firms depending on their views of market conditions. They will do this because a 20% price increase may decrease demand by such a large extent (due to a substitution effect towards central American avocados or whatever) that decreasing the gross price by 5% may actually mitigate the fall in profits.

I’ve long thought that tariffs is the only policy of trumps that is actually arguable. Wrong but arguable. It will lead to a decrease in overall economic output, but there will be winners and losers. Just as reducing tariffs did the opposite decades ago.

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A 20% tax is a 20% tax. And ultimately all such taxes are paid by the customer, because where else is the money going to come from?

I mean, you can argue that a 10% increase in sales tax isn’t really borne by customers because retailers might adjust their pricing. But there is still has a 10% tax right there on your receipt, so I don’t think anyone is going to buy your reasoning.

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(recovering economist) In the short run, the incidence of a tax or tariff depends on the elasticities of supply and demand(/recovering economist)

… But in let’s stick to the important part: it’s a new tax, and (some part of) it will be paid by American consumers. Trump is advocating raising taxes to pay for his vanity boondoggle.

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In a closed economy with perfectly competitive markets, you’d be right.

Take a simple hypothetical example. Mexican avocados are the cheapest on the market, since it would cost America 15% more to make them (so everyone just buys Mexican ones). Slap a 20% tariff on the Mexican ones, what would happen?

Either the Mexican firms try to reduce the gross price so that the end price remains cheaper than the American alternative, or they can’t and suddenly American farmers decide to grow avocados. Mexican avocados are no longer the cheapest, and American consumers pay 15% more than they used to for avocados this time sourced from America. The average consumer in America is worse off, but the price increase is 15% not 20%. Avocado farmers throw a party.

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Ultimately, prices of goods in the US will go up, and some of this will be redirected towards imbecilic garbage like a giant wall.

Money is being taken from individuals, and spent by the government… In a grossly incompetent fashion.

This is exactly what conservatives used to fight against. Rejection of this is a cornerstone of economic conservatism. And the members of the major political party that is supposed to represent that view has completely abandoned it.

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Including not only tea party lunatics but older and supposedly wiser and more responsible Senators and Representatives, some of whom have been in office since the Reagan years. What does this say about the conservative movement, if virtually none of them are actually conservative?

And meanwhile leading Democrats like Feinstein and Schumer are just rolling over to cooperate with Trump, which if anything is even more shameful. The whole political system in this country is ideologically bankrupt. None of them believe in anything except staying in office.

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That ideology is mostly meaningless once you start lining people’s pockets and offering them power over others.

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But I’m not talking about the average price increase for the average avocado consumer, who demonstrates average price elasticity.

I’m talking about the specific consumer who specifically buys a Mexican avocado, because he specifically wants that particular Mexican avocado.

He pays $1.20. The government collects $0.20. That means that he has paid a 20% tax, end of story. It’s a 20% tax even if he could have saved money by buying bought a cheaper American avocado.

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K mate, good to know there’s more than one alternative fact in this policy debate!

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It’s not a debate, you are confusing your terms. “Tax” is not the same thing as “price increase”.

Look at this way. Suppose the government imposed a a 15% tax on gas guzzling automobiles. It’s true that sales of gas guzzling automobiles would drop, and customers would shift to more fuel efficient vehicles. Maybe they even end up saving money. And maybe that’s the intent of the tax. But that tax on gas guzzling automobiles is still 15%, and it’s still borne by the customer. Even if fewer people actually pay it.

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Like the Pence quote, though, this was said in 2015.

Now that the rubber is meeting the road, how opposed will these people really be?

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You’re still assuming that firms are passive bystanders to economic decisions made by consumers and government. They price products partly on the demand of said product. Demand is most commonly nonlinearly related to the price. A tax by the government will change the profit maximising gross price that the producer sets, and the money comes from profit margin per good sold since it allows them to sell more.

I’m not saying anything controversial, this is microeconomics. The incidence of a tariff will partly fall on domestic consumers and partly on foreign producers. It isn’t 0/1, and saying it entirely falls on domestic consumers is just as wrong as saying none of it does. Will more of it fall on consumers? Most likely yes.

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Really? So blah blah blah yes you agree it’s a cost that will “most likely mostly fall on the consumers”.

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Tim, I’m not disputing your assertions about the relationship between price and taxation. I am disputing your implication that if a 20% tax results in only a 15% increase in price, then it should not be considered a 20% tax.

A 20% tax is a 20% tax, it is paid by the consumer, and should be referred to as such. A 15% price increase is a 15% price increase, and may be referred to as such. And those two can coexist. You are the one who is trying to muddy the distinction.

It’s true that homo economicus only cares about final price. But for some specimens of homo politicus, it’s the tax that matters. It’s the amount of your money that will be collected by the government. For some people, this matters a lot. And so the media are right to lay it bare.

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I was originally responding to a post that said this will lead to a 20% increase in the “COST TO YOU”, which isn’t true. I’m not disputing it’s a 20% tax on mexican imports, which is the definition of a tariff.

@GatInDaHat I said it will prob fall more on consumers. You guys are thinking 1 or 0 when the reality is its 0.5-0.9.

Come on guys we’re all on the same team, no one likes trump or wants to see a trade war. But either words and arguments matter or they don’t. Either facts matter or they don’t. It’s clear where trump stands on those questions, but lets not follow him into the abyss just yet. Just trying to make a correction that’s all.