Source: EconLog
by Pierre Lemieux
“College economics students know that a tariff is a tax charged to importers when a good enters the country and that this tax is generally transferred to domestic consumers by way of an equivalent price increase. So what Trump is really saying is, ‘very simple, a foreign state charges a tax on its residents, my own state will charge an equivalent tax to our own residents.’ Your tribe or collective harms its own, the tribe or collective I run will cause an equivalent harm to its members; it’s that simple. Not only does elementary economic theory demonstrate this conclusion, but it is continually confirmed by experience to the point where the mere announcement or expectation of domestic tariffs starts pushing up the price of the imported goods and of the substitute domestic goods.” (02/19/25)
https://www.econlib.org/the-basic-error-about-international-trade/