I have 0 maths or economy skills, so I do need it explained like I’m 5. They’re in the news a lot atm but I just don’t understand them

    • Björn Tantau@swg-empire.deEnglish
      0·
      15 days ago

      A tariff is the price a foreign company has to pay to be allowed to sell their product in America. When the product normally costs $100 and the tariff is 20% then the company has to pay $20 to be allowed to sell their product. Those $20 go to the American government.

    • sexy_peach@feddit.orgEnglish
      0·
      15 days ago

      It is an extra charge on top of products from overseas that is paid to the government.

      If you were a small island and you had farmers that can’t compete with grain from other countries, you could either subsidize them or have a tariff on grain from overseas. First would lower the price of produce they would make, so they can compete, second would raise the local price of overseas product so they can compete. Both are valid strategies in niche situations.

        • nocturne@sopuli.xyzEnglish
          0·
          15 days ago

          Since the comment I replied to was deleted I willreply here.

          The big thing to realize is trump and his cult seem to think the exporter (country of origin) pays the tariff to the importing country’s government. Where it actually is paid by the person who imports the item passing the tariff to their government.

          If you are in the US and buy a 24% tariffed item from another country you are responsible to pay your government that 24%.

          Now imagine you manufacture cars here in the states, but of you 1000 need components to build that car 825 of them are imported. You have to pay for each of those taxes tariffs, increasing the cost of something manufactured here.

        • Phil_in_here@lemmy.caEnglish
          0·
          15 days ago

          When you import something from another country, it needs to go through things like customs, etc. You have to fill out all the paperwork about what it is and where it’s going (if you’re using/selling it in the US or just middlemanning it somewhere else).

          Part of that paperwork includes tariffs, a tax on the good you are importing. So, the importer has to pay the government that money in order for the product to legally come in to the country. The importer pays that cost, so the local purchaser pays that cost, so the consumer pays that cost. And each one of those (and likely many other) steps probably will add on a little extra for the trouble.

          The hope is that encourages local production; even if it costs more to produce locally, when you factor in the cost of the tariffs to import, it might make sense to invest the cost to avoid the tariffs.

          The troubles are:

          1. you can’t often make a fully operational supply chain domestically in 4 years
          2. the US doesn’t have some of those raw resources, like minerals or regional food sources
          3. good or bad, places like China can pay professional factory workers way less than minimum US wage, which, in case this is news to anyone, is already far below a livable wage
          • Lady Butterfly @lazysoci.alOPEnglish
            0·
            15 days ago

            Thank you so much for this simple breakdown! It makes sense now and im bookmarking the comment. Why do you think the government is putting these tarrifs in? The real reason, not what they’re telling people.

            • Phil_in_here@lemmy.caEnglish
              0·
              15 days ago

              The cynical perspective is that it’s an attempt to consolidate wealth for the wealthy.

              Basically, you drive the price up on everything and force the least able to bear the loss in revenue to give up and sell.

              Elon Musk can afford to lose $11 billion, because he still has $200 billion left over and that is obviously more than anyone needs to keep afloat for a few bad years. The same goes for every billionaire and every multibillion dollar company.