They are, and they do. They can’t help it if there’s a completely separate transaction between the buyer and the buyer’s government.
If you look at this chart, you’ll see that the vast majority of shipment arrangements and contracts put the burden of increased tariffs squarely on the buyer.
It’s absolutely the government collecting the tax in the end. But it seems like the farmer thought his Canadian supplier was going to pay the tariffs and at some later date pass the tariffs on in the form of a price increase , just like they would with any other cost that went up after the contract was signed when in fact the Canadian supplier didn’t even collect the tariff. Which really doesn’t make sense - why would the person I bought the grain from absorb the tariff that they neither paid nor collected? He obviously thought that the Canadian company paid the tariff, just like they would have paid an increase in fuel prices and they should have absorbed the tariff just like they would have absorbed a fuel increase.
It’s probably going to work that way with most consumer purchases, When I buy something at Home Depot, there isn’t going to be a breakdown of how much the manufacturer or Home Depot paid in tariffs - but in this situation, the farmer is the importer. And he clearly doesn’t understand how that works.
This is a great idea! I don’t know if they will do this but I see no reason merchants couldn’t do this.
Itemize the bottom line of the purchase and note what added cost is from tariffs. Just a little tweak to the computer program calculating the final cost.
Then see how happy people are with Trump (I’m sure this would infuriate him which almost certainly is a sign it is a great idea).
This would only be feasible if the completed product was imported. But if the product is more expensive because of tariffs on raw materials, for instance like those on steel and aluminum, it becomes much harder to track. No worries, however, because it’s not really necessary. Consumers will soon become aware that inflation is ramping up, along with shortages of some goods that primarily come from China. The impact of tariffs will be so widespread that it will be impossible to ignore, especially if and when the 90-day pause is lifted.
I’ve read the article and either this guy is incredibly naive, has been bamboozled or is being disingenuous.
He is that stupid. On the one hand, he knows that a booming economy makes him look good. But on the other hand, everyone who knows how tariffs actually work expect these massive tariffs to slow the economy, not make it boom.
If Trump actually understands who is paying for the tariffs, why is he deliberately tanking his booming economy?
It’s far simpler to just take him at face value: He really thinks the US is taking in billions from foreign governments and companies, and this has nothing but positive effects on the US economy. It’s what he’s been saying for decades, and now we see him actually doing it. There’s no evidence to suggest it’s all a put-on.
FWIW, all three are consistent with “Trump voter”. It doesn’t prove it, but again, that isn’t the point of the article. The point is that the farmer totally does not understand tariffs.
Also, look at it from the other side: The seller has a contract that they will receive $1 in revenue for delivering the item. If they have to eat a 50% tariff by lowering their price to 50cents, they don’t get the $1 they contracted for.
The only reasonable solutions are to either void the contract entirely, leaving both the seller and buyer out in the cold, or treat the government tariff as being entirely separate from the sales contract at hand.
These things are spelled out in contracts.
And I have reviewed hundreds of contracts for an aggregate sum of tens of of billions of imported goods, and never have I seen one where the importer doesn’t carry the risk of their government changing the tariff. Never. Can it exist? Yes. I’ve never seen it.
We have suppliers who are importers and their contracts with us might spell out terms that pass any tariffs over to us, but they are not the Canadian, Chinese, Taiwanese, Mexican, etc companies. They are US based middlemen.
When we are buying in quantities that are in tens of millions we are dealing with the manufacturers directly. Almost always.
In a sensible transaction, they would be, but this fellow seems quite distant from the realm of “sensible”, so who knows?
Why didn’t he actually do it in his first term?
I’m not asking that as some kind of debating tactic; I’m genuinely curious: if he sincerely believed this back during his first term, what changed for him between then and now?
I wonder if he relies on his co-op to do the fussy stuff like taxes and never thought about it much.
Or he bought/sold from a middleman so the price was whatever they said it was and he didn’t pay it much heed.
That said, I have known a few farmers and all I have met are very, very clear on where the money is coming from and going to. They may be farmers but they also are great at spreadsheets. But, maybe some don’t pay as much attention.
As I’ve said in other threads, I have people in my linked in feeds who are in senior management, or company directors, who also believe absolute nonsense about tariffs, deficits and things like VAT. If you’re on the Trump train, you’re only hearing people that feed you disinformation.
That said, of course for tariffs there’s a point at which people actually have to cough up, and at that point the spell somewhat dissipates. The farmer may actually be ahead of the curve, because he’s seen it as a discrete invoice cost.
A major difference between the first Trump term and this one is that he had at least a few semi-competent people around him (many of whom he later fired) who talked him out of some of his crazier schemes. In this one, he’s surrounded himself with yes-men toadies, literally the worst of the worst, who are utterly unqualified incompetents and whose only common attribute is loyalty. There is no one to stop him no matter how crazy he gets.
He tried to with his tariffs on Canada, China and a few other places. But that time around, there were still “The adults in the room” who weren’t focused on nothing but loyalty to Trump. So they actually had some effect in making him back down.
But this time around, after fours years of being frustrated as president, and another four years to stew about it, he figured out that personal loyalty to Trump was the single most important feature anyone he hires must have. These people are True Believers in the cult of Trump, or at least understand that their access to Trump is entirely dependent upon staying in his favor.
So no one will push back this time. Either because they also believe this nonsense about tariffs, or because they value some other goal more than keeping the economy going. Hell, folks like the Project 2025 people might even calculate that an economic slump will help them. Desperate people are more likely to be willing to try drastic measures to “make American great again.”
I don’t know if this is still relevant, but here is a gift link to that article:
Exactly. The contract says who pays the duties, tariffs, etc. i don’t have anything like your experience with importing stuff, but I’ve imported things as an ordinary consumer, and generally seen small print saying I’m on the hook for those fees. (Which have generally been zero.) But there’s always a declaration of goods on the box so the right fees can be charged when the box enters the country.
It’s very difficult to discern what Trump sincerely thinks about anything. Does he care about abortion? I don’t think he does. Does he care about transgender issues? I don’t think he does. I remember him chiding his audience for caring more about wokeness, something he said they couldn’t even define, than they did for lower taxes. I don’t even think Trump cares about wokeness. Trump is a chameleon
Does Trump think tariffs will work to make American great again? It’s hard to say. He’s a shitty businessman who cannot run a company without committing fraud, so maybe he really does believe he’s doing the right thing. I don’t know if it really matters whether he’s a true believer or not. Either way he’s a wrecking ball.
Trump has very few actual beliefs and no principles at all, but the idea of tariffs has been a bug up his ass for a long time. I think that one is genuine. The question is how he’ll react when the economy crashes and proves him wrong. If and when he has to back off, he’ll have to frame it as a “win”.