this post was submitted on 27 Apr 2025
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That's second order operation... They can try sure but profit margins will be squeezed which is the entire point of my original comment.
Not necessarily. Depends on demand. If demand is relatively inelastic for their good or service, they can and will reliably pass the cost of tariffs on to consumers and maintain their profit margin.
They can try, sure. And when tariffs are applied to every single country, they'll likely succeed.
Corporations aren't altruistic, and their default position is growth. The ones that do pay tariffs will eventually have to increase their prices to compensate, and the ones that don't are free to increase their prices for profit while still undercutting their competition. The baseline price of goods will shift, which fucks over consumers far more than it will hurt corporations.
And suppose tariffs do eventually go away: are they going to pass the savings down to consumers? Hell no. That $3.75 tomato is the new normal, and now they get an extra $0.50 in profit for free.
When Trump introduced tariffs on washing machines in 2018, domestic makers not only increased their prices to match foreign made products, they increased the price of dryers too (since they are often bought together).
These policies are inherently anticompetitive (think of tariffs as a handicap applied to foreign corporations and products) but in practice they're more likely to favor large coporations over small.
Prices will go up at the announcement of tarrifs, and wont come down when they're halted, in reasing profit margin. After what the other guy said. Tarrif expenses will always be passed down to the end user