US businesses and consumers pay 90% of tariff costs, New York Fed says (ft.com)

Article summary

The New York Fed has reported that US businesses and consumers pay 90% of tariff costs. The discussion around the article focuses on the effects and purposes of tariffs, with some arguing they are meant to change domestic behavior and others seeing them as a regressive tax. Tariffs are seen as having both positive and negative effects, with some arguing they can lead to increased domestic production and others pointing out they can lead to higher prices for consumers. The effectiveness and fairness of tariffs are debated, with some arguing they disproportionately affect lower-income individuals.

Main themes

• Tariff effects on domestic behavior
• Regressive tax impact
• International trade policies
• Domestic production and jobs
• Consumer prices and spending

What commenters say

• Tariffs are meant to change domestic behavior, rather than punish other countries, by influencing consumer spending and encouraging domestic production.
• Tariffs are a regressive tax that disproportionately affects lower-income individuals who spend a larger proportion of their income on necessities.
• The implementation of tariffs can lead to increased domestic production and jobs, but this may take time and requires a stable and supportive policy environment.
• The current tariff regime is seen as ineffective and potentially harmful, with some arguing it has led to higher prices for consumers and reduced competitiveness for US businesses.
• Tariffs can be a useful tool for addressing unfair trade practices, such as subsidies or lax environmental regulations, but their implementation must be strategic and targeted.
• The impact of tariffs on consumers and businesses is complex and multifaceted, with both positive and negative effects possible, depending on the specific context and policy design.
• The use of tariffs as a policy tool is often driven by political ideology rather than economic considerations, leading to unpredictable and potentially harmful outcomes.
• A more effective approach to promoting domestic production and jobs might involve investing in education, infrastructure, and research, rather than relying solely on tariffs.