The real problem is that Trump’s supporters don’t understand tariffs, and wouldn’t believe the explanation anyway because to them it just sounds like Orange Man Bad.
When the US imposes a tariff on Canada, importers of Canadian goods pay the tariff to the US government. To recover that cost they raise the prices they charge American customers. So Americans end up paying the tariff. The only damage it does to Canada is that the tariff could discourage US importers from buying certain goods from Canada if they can get them somewhere else without paying a tariff. That happens in some cases, but in others Canada is already the cheapest (or only) source of a high-demand item, so Americans will just pay the higher prices - the way they’re still paying jacked-up COVID prices for so many things, for example.
Millions of Americans, being too dumb or unwilling to grasp this, think these tariffs are Trump heroically saving them from the evils of foreigners who want to destroy their Freedom.
Ya. I watched the Doug Ford announcement, and he said parts can cross the Ontario border up to 8 times before making it into the vehicle or final product.
so $10 part -> $12.50 -> $15.625 -> $19.531 -> $24.414 -> $30.517 -> $38.146 -> $47.683 -> $59.60
So that $10 part from the first factory is now $59.60 and that’s before the fact that it probably increases in value at each step along the way to being refined into it’s final product.
Thats why he’s saying (as well as others) that they expect the factories on both sides to shut down within a couple weeks.
Edit: half of that if it’s a one way tariff where both sides didn’t put tariffs on the exact same items.
Tariffs, and other taxes, are not entirely passed to the consumer. The producers are also losing money because they’re selling less. Taxes are paid both by the consumer and the producers, the proportion on how much each part pay is unknown for me.
Let’s say a bottle of Canadian Maple Syrup is $5 before.
25% Tariff is $1.25
Let’s say the company makes $2 on each bottle before tariff. They really need to make $2 per bottle to cover expenses
So if a company still wants to make $2 a bottle still.
If they sell for $6.25 to try to cover the tariff (25% increase)
The tariff becomes $1.56
Instead of making $5, they would make $4.69.
Instead of $2, they would make $1.69
If they sold the bottle for $5, paid $1.25 tariff
They would make 75 cents
The number for $5 is $6.67
If the company sold the syrup bottle for $6.67. Payed $1.67 in tariff (25%). They would make $2.
Now, of course, they want to sell it for $6.67. Will people pay the increased price?
They can’t just keep selling them for $5 and make basically a 1/3 of their previous profit.
Prices have to go up. How much is up to the consumer.
If the consumer is willing to buy Official Canadian Maple Syrup 🍁 for $6.67. The consumer is paying the whole $1.67 tariff.
An interesting thing happens when people pay $8. The syrup company makes an extra $1, Government gets $2 tariff. It’s a win for everyone, but the consumer that lost $3. (Kind of scary if Trump gets a Maple Syrup company in Canada, goes around, ignores, or pays himself the tariff and sells a bottle for $5. Both are true Canadian Maple Syrup, it just has his name on it. Are you going to buy the $5 or the $8? Even if you buy the $8, he gets $2)
The consumer can’t win. Free economy is better.
~33% increase covers a 25% tariff
If the price settles at $6.
Company pays 50 cents
Consumer pays $1
Trump gets $1.50
Who even is in charge of the “tariff funds”?
Like people are happy with having to pay $1 to get the company to pay 50 cents? Like that’s a win?
Sad reality is Americans should not buy anything with a tariff. Paying a premium to help support Canada seems like a good thing but if everyone does it and everyone pays 33% more. The tariff funds makes out like a bandit all thanks to the consumers.
TL;DR: Company facing a 25% tariff will look to raise prices 33%. If they can they are fine or better. Consumers lose. I really like Vermont Maple Syrup
Would you mind changing “instead of making, they make” by some other precise verbs? Your explaination seems very interesting but, probably du to my poor english, I feel like you saying the same thing over and over while changing the numbers and I can’t grasp your explanation.
Combined with a strong dollar that’s a huge blow to U.S. agriculture and manufacturing. FYI U.S. Agriculture is in the worst overall depression of the past 50 years. The strong dollar has basically has given the entire industry a beating.
The real problem is that Trump’s supporters don’t understand tariffs, and wouldn’t believe the explanation anyway because to them it just sounds like Orange Man Bad.
When the US imposes a tariff on Canada, importers of Canadian goods pay the tariff to the US government. To recover that cost they raise the prices they charge American customers. So Americans end up paying the tariff. The only damage it does to Canada is that the tariff could discourage US importers from buying certain goods from Canada if they can get them somewhere else without paying a tariff. That happens in some cases, but in others Canada is already the cheapest (or only) source of a high-demand item, so Americans will just pay the higher prices - the way they’re still paying jacked-up COVID prices for so many things, for example.
Millions of Americans, being too dumb or unwilling to grasp this, think these tariffs are Trump heroically saving them from the evils of foreigners who want to destroy their Freedom.
Just tell them it’s a 25% sales tax.
Reports from people who know him, Trump is one of these people. He clearly doesn’t understand the process.
“I’ve been in the room when it’s been explained to him, and he doesn’t understand it, but he likes tariffs,” Bolton said.
not to mention any potential compound tariffs on complex goods likes automobiles for example.
Prices skyrocket immensely.
The housing market is only going to get more expensive, etc.
By compound tariffs, do you mean extra tariff fees due to repeated trips across the border in the manufacturing process?
Ya. I watched the Doug Ford announcement, and he said parts can cross the Ontario border up to 8 times before making it into the vehicle or final product.
so $10 part -> $12.50 -> $15.625 -> $19.531 -> $24.414 -> $30.517 -> $38.146 -> $47.683 -> $59.60
So that $10 part from the first factory is now $59.60 and that’s before the fact that it probably increases in value at each step along the way to being refined into it’s final product.
Thats why he’s saying (as well as others) that they expect the factories on both sides to shut down within a couple weeks.
Edit: half of that if it’s a one way tariff where both sides didn’t put tariffs on the exact same items.
Tariffs, and other taxes, are not entirely passed to the consumer. The producers are also losing money because they’re selling less. Taxes are paid both by the consumer and the producers, the proportion on how much each part pay is unknown for me.
Let’s say a bottle of Canadian Maple Syrup is $5 before.
25% Tariff is $1.25
Let’s say the company makes $2 on each bottle before tariff. They really need to make $2 per bottle to cover expenses
So if a company still wants to make $2 a bottle still.
If they sell for $6.25 to try to cover the tariff (25% increase)
The tariff becomes $1.56
Instead of making $5, they would make $4.69.
Instead of $2, they would make $1.69
If they sold the bottle for $5, paid $1.25 tariff
They would make 75 cents
The number for $5 is $6.67
If the company sold the syrup bottle for $6.67. Payed $1.67 in tariff (25%). They would make $2.
Now, of course, they want to sell it for $6.67. Will people pay the increased price?
They can’t just keep selling them for $5 and make basically a 1/3 of their previous profit.
Prices have to go up. How much is up to the consumer.
If the consumer is willing to buy Official Canadian Maple Syrup 🍁 for $6.67. The consumer is paying the whole $1.67 tariff.
An interesting thing happens when people pay $8. The syrup company makes an extra $1, Government gets $2 tariff. It’s a win for everyone, but the consumer that lost $3. (Kind of scary if Trump gets a Maple Syrup company in Canada, goes around, ignores, or pays himself the tariff and sells a bottle for $5. Both are true Canadian Maple Syrup, it just has his name on it. Are you going to buy the $5 or the $8? Even if you buy the $8, he gets $2)
The consumer can’t win. Free economy is better.
~33% increase covers a 25% tariff
If the price settles at $6.
Company pays 50 cents
Consumer pays $1
Trump gets $1.50
Who even is in charge of the “tariff funds”?
Like people are happy with having to pay $1 to get the company to pay 50 cents? Like that’s a win?
Sad reality is Americans should not buy anything with a tariff. Paying a premium to help support Canada seems like a good thing but if everyone does it and everyone pays 33% more. The tariff funds makes out like a bandit all thanks to the consumers.
TL;DR: Company facing a 25% tariff will look to raise prices 33%. If they can they are fine or better. Consumers lose. I really like Vermont Maple Syrup
Would you mind changing “instead of making, they make” by some other precise verbs? Your explaination seems very interesting but, probably du to my poor english, I feel like you saying the same thing over and over while changing the numbers and I can’t grasp your explanation.
There is both downward price pressure and reduced demand.
It does not change the “who pays” question.
The areas where they overwhelmingly voted for the orange dumbass are in for a shock. Here is a list of the products that canda has put tariffs on.
https://www.canada.ca/en/department-finance/news/2025/03/list-of-products-from-the-united-states-subject-to-25-per-cent-tariffs-effective-march-4-2025.html
Combined with a strong dollar that’s a huge blow to U.S. agriculture and manufacturing. FYI U.S. Agriculture is in the worst overall depression of the past 50 years. The strong dollar has basically has given the entire industry a beating.
Just wait until our first harvest season without immigrants!
A rapid increase in labor cost plus low prices. Now that’s a recipe for a fun party in bankruptcy court.
Obviously it’s the deep liberal swamp state’s fault. Trump’s going to make Canada pay for it.