Source: Adam Smith Institute
by Dr. Madsen Pirie
“As President-elect Trump weighs up the tariffs he has promised to impose, it is important to understand who will pay them. There is a popular misconception that when a country imposes tariffs on imported goods, it is punishing a foreign government or foreign firms. This is not a mistake made by economists. The tariff is paid at point of entry, and much of it goes to the government that imposed it. It is paid by the importer, a probable wholesaler, who passes it on in the form of higher prices for his or her customers. The usual aim of the tariff is to make imported goods more expensive so that people will buy good produced domestically instead. It gives the domestic producer an advantage by making the imported version more expensive.” (11/11/24)