Tariff is very simply a tax on goods being brought into a country. The importer (receiver) pays the tax when items arrive at your country. So a Tariff from China means that when China ships something to you and it arrives you pay the tax to Customs. That cost gets passed on to you the consumer. Now remember the cost of the item has gone up, this means the sales tax you pay will go up too. So really you are getting double taxed.
Will your things go up 25% if made in China? The answer is NO! Most companies will spread the cost increase out amongst all the items they sell. This won't eliminate the cost increase but it will keep it from looking worse than it is.
If I've lost you at this point feel free to write me and I'll see if I can clarify.
But what about China's tax on US goods? yes they will have to pay which means they will just buy from someone else as we will buy from other countries.
The joke is on Trump and the pain is on America, many of the companies in other countries are owned by China. So China will produce more off shore too. They are very flexible like that.
Example. I just bought a TV assembled in Mexico from a company in Korea made with Chinese parts. Still with me?
Why is Trump doing this? Very simply put it's called Insider Trading. If you know what the market will be doing before it does it that's called insider trading. If you manipulate the stock it's called "Stock Manipulation" just another crime for Trump. So if I cause the price of Soy Beans to drop, then run out and buy stock that's illegal.
Are we good so far? Bottom line we pay more tax......
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