Sunday, January 26, 2025

Source of funds for tariffs

 

This statement/tweet isn’t exclusively true:





the foreign entities can simply lower their import prices in USD terms and access these foreign USD account balances as source of USDs to pay any new tariffs:

 



4 comments:

NeilW said...

They are taxes *some* people pay on imports. Other people choose local substitutes, and that money goes to Americans who then spend it further. It's all very straightforward once you realise there are Trump's people, and there are other people. Trump doesn't care if their net costs go up. You'd think people like Dean Baker would spot a redistribution when they see one.

Matt Franko said...

“US consumers pay all tariffs!” is a consistent mantra of the Trump deranged left in the US Neil… they just trying to be contrary to Trump…

Andy Blatchford said...

Sorry Matt but you don't understand the mechanics of this. Yes in a DDP contract the foreign company could pay the duties. But as the foreign company would have to become the importer of record and have to be IRS registered (also requiring a single entry or continuous bond)they become a US company so not a solution(you could employ a US agent to do it ...what we call indirect entities but thats more expensive) They could though just reduce their prices instead of going through all that.

I get a lot of enquiries about DDP to the US because importing is a bit of bureaucratic mare. It doesn't solve the issues by changing from DAP to DDP

Andy Blatchford said...

Amateurs talk tactics professionals study logistics. In the trade world amateurs talk tariffs professionals study regulations. If you went DDP above the importer of record is required to be legally the responsible party in compliance with regulations.