this post was submitted on 27 Nov 2024
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Explain Like I'm Five
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The tariffs will be paid by the importing companies, and then it will cause the prices of those goods to rise.
The hope is that this will incentivize and result in more development of the American manufacturing sector, resulting in medium and long term gains.
Short term there will definitely be a cost, paid by us.
Tariffs alone are not enough. Expanding production is a long term investment, but there's no guarantee a tariff will still exist in 4 years. Its risky to invest capital to meet tariff-induced demand when that demand might disappear before your new factory is even finished being built.
Uncle Sam can mitigate that risk by subsidizing the construction of new factories while the tariffs are in place.
According to this video, Biden maintained at least some of the targeted tariffs Trump put in place before. So there might be some bipartisan support for tariffs across multiple Presidencies.
Unfamiliar with this channel so I can’t vouch for accuracy.
https://youtu.be/lD3FX_wxqUI