
The Supreme Court ruled with a 6-3 majority that Trump exceeded his authority when he imposed tariffs via a law reserved for national emergencies.
Am I understanding this right?
1) US customer pays huge import tax on imported goods in the form of higher prices.
2) Seller sends the collected tax to the US government
3) US government will refund all/most of that tax back to the seller after this ruling
4) Seller gets to keep the returned tax money as pure profit (no refund to customer)
This will be so in some cases, but there are extra steps in others.
e.g. In a different path, 1 and 2 are the same, but things then diverge.
3) To recoup some of those tariff costs, the company sells the rights to any potential future tariff refunds. They recoup a portion of what they paid immediately but hand away the right to a full refund to another party, such as Cantor Fitzgerald. The seller might use this to reduce prices for their customers, but probably won't. They'll set prices according to what the market will support.
4) US government will refund all/most of that tax back to companies, like Cantor Fitzgerald, that bought the rights to tariff refunds.
5) Seller doesn't get any extra money back, so there's no money to refund to consumers.
IMPORTANT NOTE: Cantor Fitzgerald, while just one of the companies doing this, was formerly headed by Howard Lutnick and is currently owned and operated by his sons.
> The seller might use this to reduce prices for their customers, but probably won't. They'll set prices according to what the market will support.
The price the market supports depends on things like taxes and tariffs.
Why removing taxes lowers prices:
https://open.substack.com/pub/shonczinner/p/why-removing-tax...
How is this not reverse Byzantine tax farming?
Where you going with this?
Afaik, Byzantine (or reverse) and other private tax collection setups aren't illegal.
“Not illegal” != “very very good for everybody”
Sure. My point is strictly say what you want to mean.
If you believe this is bad for society then say "I can't see how allowing others to profit from your tax refund is good" and not "How is this not reverse Byzantine tax farming?".
Sure man - you do your thing, I’ll do mine. I prefer implicit meaning to explicit.
Some additional context to your note: Howard Lutnick is Trump's Secretary of the Treasury. And also was Epstein's literal next-door neighbor.
Lutnick is Secretary of Commerce. This is a smaller role than Scott Bessent, who is the Secretary of the Treasury.
You're right, I'm wrong, sorry, I was checking my memory on Wikipedia [1] which opens the section of his bio "Secretary of Commerce" with the line "Following the 2024 presidential election, Lutnick was being considered as secretary of the treasury." and I swapped the two roles.
While a smaller role, this is a worse conflict of interest as the secretary of commerce is directly responsible for recommending tarriff actions to the President.
[1] https://en.wikipedia.org/wiki/Howard_Lutnick#Secretary_of_co...
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?
Amazing. Did he get the role because of his skillset, of because of his skill at keeping his mouth shut?
His brother-in-law is a prison guard. Just kidding but would anyone be surprised?
And bought a house from Epstein for $10
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To the extent this is true, the entire thing could literally be a grift (I'm not saying Trump is smart enough to come up with this, just that people around him are, and he's grifty enough to go along with it):
1. Trump enacts the tariff, despite knowing it will be struck down.
2. The tariff extracts hundreds of billions from the economy.
3. Finance firms buy the potential refund for pennies on the dollar, knowing that Trump has no plan to defend the tariff.
4. The Supreme Court strikes down the tariff, as planned.
5. The finance firms profit on the refunds.
6. We are all poorer, Trump's cronies are richer.Trump has been obsessed with tariffs for decades. I fully believe he thought this was a great idea. Lutnick, on the other hand, quite obviously forsaw this eventuality (as did anyone who understands how power actually flows in the United States) and encouraged it while preparing to profit massively himself. It's an obvious play, good on him for getting away with it. It's clear at this point that this administration has utterly collapsed the idea of the rule of law, though. 15 years ago this would have been a scandal that would have led to firings and possibly impeachment
It's hardly "good on him". Why is he profiting from failed policies of the government he is a part of?
And now Scott Bessent has single-handedly made tariffs a seemingly illegitimate economic tool. Nice job.
Good on him? Did you forget an /s? Or do you really feel that if you can get away with grifting the public, good on you?
Umm this doesnt seem to be true: https://www.semafor.com/article/02/20/2026/cantor-fitzgerald...
Or is there another source for this claim?
The importer pays the tax and passes it on as higher prices to the consumer. So the importers are the one that had the tax collected from them and would be getting the refund.
The importer CAN be the seller, but other times the importer is a middleman in the supply chain.
To the CPAs among us: will the refunded import taxes be treated as extra profit for all the importers who paid them?
I could see an argument that they don't have a legal obligation to pass the refunds on to their customers, any more than my local grocery store owes me 5 cents for the gallon of milk I bought last year if the store discovers that their wholesaler had been mistakenly overcharging them.
The idea of getting a refund for mischaracterized tariffs is actually fairly common (it's called a duty drawback and there's a cottage industry around this). It's generally used when an importer incorrectly categorized their import under an HS code that has a higher duty than the correctly categorized HS code.
The difference this time is the scale is orders of magnitude larger. Will be interesting to see how they (importers and CBP) work through this.
A regular importer who routinely pays customs duties is now owed money by Customs and Border Protection. Can they now set off future duties against the balance owed them? Normally, reciprocal debt cancellation is legal.
The U.S. Treasury has a whole system for this, but in the other direction. If the government owes you money, and you owe the government money, the Treasury will deduct what you owe from whatever they are paying out.[1] But they're not set up for that in the other direction.
Smart money is that they will make some token comment about "leave it up to the states" or lower courts and then do absolutely nothing about it
The feds are the ones that control import duties, not the states. The courts will decide two years from now what to do.
I get how it works, I’m mostly talking about the how admin will spin it/shirk responsibility
> The difference this time is the scale is orders of magnitude larger.
The administration will just do nothing. They need 3 maneuvers for this to drag out longer than Trump 2.
There is no intention to follow the law here.
I wager he’ll:
1. Claim to refund the money to each taxpayer with a Trump-signed check.
2. The number of checks will not total $200 B. Any reporting to the contrary will take up space from the truth about Epstein.
3. Before 2028, a loyal SuperPAC will form with hundreds of billions in dark money.
"…refund the money to each taxpayer…"
I've got receipts.
Literally. I have receipts for hundreds of dollars where the tariff is itemized (from JLCPCB, etc.)
I got charged a $600 tariff from UPS to ship a $30 25-pound sandbag into the US from Canada.
UPS didn't even deliver the product.
I'm suing them in small claims.
We'll see what happens.
I imagine that even after the ruling, our ass backwards legal system will somehow say this makes sense, even though the tariff rate was never near high enough for that bill to make any sense.
Further, they're going to get refunded the $10 it MIGHT have cost them.
> 25-pound sandbag into the US from Canada.
It's not the point, but why were you doing this? Surely internationally shipping a sack of sand is more painful than getting a local one?
This could just be across the border.
> just be across the border.
It was interesting to see shops in the border towns of south & south east Switzerland buying & selling products from Italy, a relatively cheaper market.
I mean, when I was young we lived in Poland right next to the border with Slovakia and we'd drive over once a week for groceries and to buy fuel because it was just so much cheaper over there. Nowadays it's the reverse since they got the Euro - most Polish shops near the border cater to Slovakian shoppers and even accept Euro for payment.
> even accept Euro for payment.
Pre Brexit, I encounter a shop that did this in London and was surprised.
Having just been over there again, it's not hard to be entirely cashless, so the convenience isn’t missed.
Italians seem to like dealing in cash, with various taxis and hotels being cheaper if you pay cash. I guess that means it’s off the books?
American here. My experience is that the US dollar seems to be accepted in tons of stores in countries all over in the Americas Europe and Asia. Trade is trade it seems.
It wasn't the tariff. UPS has been tacking on a ridiculously high paperwork fee for the service of processing tariff payments. Other shipping companies have also had fees, but UPS is the main one that's made it exorbitant and disproportionately higher than the tariff itself.
I'm thinking the delivery agents such as UPS, Fedex, USPS now need to sue the United States so they can pay back all the recipients the fees they charged, plus interest.
There are going to be a raft of class action suits based on this.
As one of my lawyers once said, the only winners here are the lawyers.
“ As one of my lawyers once said, the only winners here are the lawyers.”
Congress is full of lawyers do it’s pretty natural that they make rules that favor lawyers.
I suspect that my recent experience confirms this. Our daughter shipped two suitcases home from the UK, paying some local company for "door-to-door" delivery. They contracted with UPS who demanded an additional $32 when the first bag showed up. For the second she paid the same fee online so they wouldn't require a check at the door.
That's a great question. I would also love to know that answer. I agree with you that they're not going to share the refund if the importer was the middleman in the supply chain, and same thing if the importer was also the seller.
There is a 1099 specifically for money received from the government.
I think the tax is basically on the profit made when you add up costs and expenses. Say:
Before: Importer pays China $10 for widget, pays $2 duty, sells to shop for $12 - profit zero, tax on that zero.
Now: Paid $10 for widget. Paid $2 duty, sold for $12, $2 refunded - profit $2, pays tax on the $2.
At least that's the normal way of doing accounting. There can be odd exceptions and complications in local laws.
Yes, I think that's the starting point. Another part of my question was whether a CPA applying GAAP would recommend recognizing the $2 as other income, or else as a liability against a future claim from the customer who bought the widget and is now seeking a partial refund.
I did what passes for research these days and concluded that if the claim is "probable and estimable," then it could be recorded as a "contingent liability" rather than other income. Relevant facts would include whether the tariff refund included a pass-through refund mandate (unlikely with this administration), or whether class actions for refunds against merchants were pending (inevitable).
I imagine the government will provide some sort of guidance for that kind of stuff?
Related question, unanswerable except maybe as a rough estimate: how much will it cost, in accountant/bookkeeper time, to do all the administrivia required to process all these refunds?
It depends on the terms of the transaction. Most business-to-business transactions would have the importer responsible for duties, but many, maybe the majority of business-to-consumer transactions have taxes & duties covered by the exporter and included in the final price which would typically reflect the additional taxes & duties in the prices. In those case, the exporter would be the one refunded.
at the end of the day, it's average joe who bought his things more expensive, and he won't get back his money.
That's what matters, don't care if it's the seller or a middleman that gets this money.
That's really a shame for american citizens, i'd be furious if i was american.
Many are beyond furious
Very few people voted for tariffs, specifically. They voted for a promise of a return to a world where they were on top.
> They voted for a promise of a return to a world where they were on top.
Very few were on top during The Gilded Age and it has been EXTREMELY clear for quite a long time now that the "Great" in M.A.G.A. is a reference to the 1880s, not the 1950s.
Where THEY were on top. Trump voting men wanted the world where they can rule over women. Trump voting whites voted to be over minorities. Trump voting christians want their religious state.
And so on and so forth. In each case, vote for Trump was to harm someone you look down at and to dominate over another group.
Begging for a 12h day of work every morning on the docks as a stevedore in crowds among hundreds of other men begging for the same job does not give one power to "rule over women".
They'd be too underpaid and exhausted to rule over their own dinner before falling asleep for the night.
No they absolutely did. Trump promised tariffs on multiple occasions: https://www.export.org.uk/insights/trade-news/us-presidentia...
When you vote, you vote for an entire platform and you especially vote for central campaign promises. You don’t get to say “I voted for a world where I’m on top” and then say “but not for the primary method the candidate promised to use!”
tariff were promised and implemented by Trump in his first mandate too, if you voted for him, you mostly voted for America Great Again Through Tariffs.
After the liberation day tariffs were announced, 34% of the people thought they were good.
https://www.kansascity.com/news/nation-world/national/articl...
Project 2025 was publicly available prior to the election. Tariffs were one of the many policies within the larger plan. If you voted for Trump you are responsible for the Tariffs, this is not a hoodwink where Trump rug pulled everyone after getting elected — it was literally there in the open.
Even beyond/disregarding Project 2025, tariffs were a well-known part of the GOP platform in 2024; it was even included and discussed at the Presidential Debate. The Harris platform even called it a tax at that time, to attempt to make it quite clear to the voter who, in the end, would bear the cost, and the Trump platform equivocated on who would pay the tax to distract from that Harris was right.
Even if you knew nothing of Project 2025 (somehow), you were warned.
On top you have news outlets and educated people not being clear what they are. See from the article:
He has long argued tariffs boost American manufacturing - but many in the business community, as well as Trump's political adversaries, say the costs are passed on to consumers
It’s reported as if someone still needs to figure out who pays the tariffs in the end. I’m aware that tariffs are a lever to potential move buying behavior and give incentives to move production locally. But in this instance and how it’s/ was implemented it’s clear who is the paying for it.
“ Even beyond/disregarding Project 2025, tariffs were a well-known part of the GOP platform in 2024;”
The tariff stuff is just a variation of the republican dream to replace income tax with a sales tax. Big tax cut for higher incomes while raising taxes for lower incomes.
Trump believed that Obama was a secret Muslim infiltrate sent to destroy America because he's black, that's what they voted for. Racism.
The rest of it was just gravy.
The problem is USA doesn't get good choices. Given the choice between a walking corpse and trump, they choose the corpse. Given the choice between a woman and trump, they choose trump.
Care to elaborate why a person is a bad choice because she is a women? Especially compared to someone who shits his own pants in the public?
This is loony, all these guys knew eachother for years before and have cordial if nor friendly relationships. The Clintons, Trump, Bushes, Obamas, etc.
In 2016 65% of Trump supporters believed Obama was secretly Muslim. [0]
Trump claimed that Obama was "the founder of Isis" and claimed MANY times that he was not born in the United States. [1]
So yes, he is completely loony... and very blatantly a racist who sends dogwhistles to other racists regularly.
No, he is not friends with Obama or Biden. In fact, Trump is the first president in 150 years to refuse to attend the inauguration of his competitor after losing. [2]
[0] https://en.wikipedia.org/wiki/Barack_Obama_religion_conspira...
[1] https://x.com/realDonaldTrump/status/508194635270062080
[2] https://www.whitehousehistory.org/photos/notably-absent-pres...
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These people are not necessary against tariff, they are against paying more for their stuff and having it benefit some middleman because the current government messed up badly.
I can otherwise understand how people would agree on paying more for their stuff if it allows their fellow citizens to have a job.
There are many reasonable ideas for import taxation. But what you describe was not what happened. China fought back with their own tariffs, and you may well have paid less import tax on your Temu knock-offs than you did for some widget made with both higher environmental and labor standards in some western European country.
You are pro thoughtless tariffs against every random country, because of temu ads?
Don’t panic too much yet, there are other legal bases for the tariffs.
We’ll see…
Check Truth Social, many are livid that the tariffs were found illegal. A lot of supporters of the current government prefer to pay higher prices for goods.
It's like a car crash, I have to rubberneck it sometimes for my own morbid curiosity.
So they basically figured out how to bribe all these companies?
Such a kleptocracy.
i read that Costco could actually refund everyone, as they can know exactly who bought what.
If they do, that's another matter, but they definitely can.
> The importer pays the tax and passes it on as higher prices to the consumer.
So it matters how we’re interpreting “paying”. One way to look at it is that if the cost was passed on to the consumer, the consumer paid it. The importer simply handed over the money.
and if so, do you really believe any importers who paid the tariff will further refund back to the consumer ? It's eventually a net win for the importer.
Or maybe this is used to justify a new emergency federal law that all purchases must be reported on your tax return, just in case the government ever needs to refund any illegally collected import taxes.
I think I'm kidding, but I'm not really sure anymore.
Indiana has sometimes required that for decades, though I think they finally adjusted the law a little after online purchases became popular.
Indiana charges sales tax like a lot of states, but only on things sold in the state or from a company located in the state. If you ordered something from California or overseas, no sales tax was charged. The law required you to track these purchases and report it on your tax return so you can pay the required sales tax.
That said, enforcement wasn't good and I don't know a single person that actually did so. A common tax fraud for the average person, I guess.
And honestly, I think any emergency federal law would be similar: It wouldn't be for refunds for the masses, but for surveillance and extortion.
Yeah, most states that have sales taxes have "use taxes" to cover this case and the case of a wholesale item (no tax) being used in house. It gets enforced primarily in retrospect and on big ticket items that the state does see, like a vehicle purchase.
Heh. Indiana charged sales tax at when you registered the vehicle the first time unless you had paperwork proving otherwise.
Very common for a private sale to put the price cheap, but not free - $200 charged sales tax on $200 and a free car was charged on the estimated value.
A federal law has to be approved by Congress, that isn’t happening. An executive order maybe?
That would be no more legal than what the Supreme Court just struck down.
There have been no decisions about refunds. The court avoided addressing that.
That topic will surely go back to the courts, kicking and screaming
Personally think it should not get refunded. There’s no sane way to get it back to its source. And no one group should be making profit from it. Best if it stays with the government like a federal forfeiture so in theory we all benefit from it as citizens , maybe it goes against the national debt or lessens our deficit next year.
Not a bad idea, but how do we prevent this from creating incentives to engineer similar situations in the future?
Presumably such future attempts would be stopped immediately given this ruling.
So illegal actions shouldn't have consequences for anyone?
That's a good way to deter such acts in the future
That’s a separate issue from where the already paid tariffs should go
No, it isn't. Because there is no deterrent against future illegal actions in the future, if there won't be reimbursements.
Trump will just declare illegal tariffs again, until the Scotus strikes it down and then repeat
>"maybe it goes against the national debt or lessens our deficit next year."
And help to prosecute those who broke the law and raised illegal tax /s
Government is a poor spender, we should not be handing them more money
We all participate in this system through, most of “us” passively. Use the normal means to enact the change you want to see
It is more complicated than that.
Seller sold forward contracts to recoup tariffs at a lower price and passed on the benefits to the consumers already. E.g. For every $1 seller paid as tariffs, seller sold a contract to someone for $0.25 saying if government ever refunds the buyer of the contract can keep it. The $0.25 already passed to consumers as benefits.
> Seller gets to keep the returned tax money as pure profit (no refund to customer)
Not to the specific customer but this benefits will now get passed to future customers as prices will be lowered than usual (lower than pre-tariff prices) due to competition.
Note that consumers who paid more were not necessarily paying the tariffs. Stores like Costco, Walmart increased prices across the board and socialized the impact of tariffs. Even if there was some mechanism to return tariff money to consumer, there is no way you could return it to someone who paid higher due to this socialized nature of price increase.
Guess who took the other side of those forward contracts: https://www.wired.com/story/cantor-fitzgerald-trump-tariff-r...
It’s worse. Sellers raised prices citing tariffs. Not only does the seller get a one time bonus, the prices are now permanently raised as we all know prices are never coming down
The willingness of the customer to buy from competitors is the only thing that ever effects prices.
Seller wasn’t involved in the tariffs. Rather the importer paid them, etc.
> Seller wasn’t involved in the tariffs. Rather the importer paid them
Strictly speaking it depends on the Incoterms agreed upon by the seller and buyer[1]. If the Incoterms are DDP, then the seller should pay import duties and taxes and as such is involved.
Of course sellers are typically trying to run a business, so they'll bake the taxes and import duties into the sales price. So effectively the buyer ends up paying for it, just indirectly.
This was relevant when the tariffs were introduced, as sellers with DDP goods in transit had committed to a sales price which included any tariffs and would have to swallow the extra costs when they got the bill from the freight forwarder.
[1]: https://en.wikipedia.org/wiki/Incoterms#Allocations_of_risks...
Seller doing the importing, so they pay the foreign entity for their goods and sends the appropriate cut to the US Government. At that point, they either eat the additional cost of business or make their customers do so. Or something in between.
Tariffs are like a national sales tax.
The person who wants it imported, the buyer?
I guess by seller parent means the US company who sold the product to the US customer not the seller who sold it to that company.
Can I get compensation from UPS or FedEx for making me pay illegal tariffs - and making me pay a fee to them for processing it too?
(I know the answer is practically ’no’, but it does still seem to me that the bureaucracy and companies that went along with this obviously illegal operation bear some culpability...)
> Can I get compensation from UPS or FedEx for making me pay illegal tariffs - and making me pay a fee to them for processing it too?
I can see why you are mad, but it seems like the were fulfilling their legal obligation (at the time).
The good news is that having directly paid UPS and not a middleman makes it much more likely that you will receive the money back. If anybody does.
> it seems like the were fulfilling their legal obligation (at the time)
Rather, their illegal obligation (at the time)?
It was clear from the start these import tariffs are illegal. Only congress can set them. It says so in the constitution! Hand waving at some pretend emergency doesn't give you the right to ignore constitutional law.
The logistics companies should probably have fought these clearly illegal tariffs from the start. Instead they played along and collected the fees. There's probably some interesting legal precedence here to be made, should this argument hold in court.
That's be nice, but I place more blame on the half of Congress that was OK with this.
If everyone sued them in small claims over it, there probably would be a whole lot of default judgments.
Then you’re on your own to collect.
You’re always on your own to collect.
Unclear.
I am certainly planning on seeking reimbursement from DHL and FedEx for the difference between the Trump rates, and the previous MFN rates. And if not, request charge backs via my credit card issuers.
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Refunds are very complicated. How does the co even know who bought? As it goes thru several layers of distribution chain. Assuming they want to refund of course. I suppose they will claim they reduced prices (or more likely deferred price increases, how nice!)
And then not all tariff was absorbed by importer - some suppliers would have cut prices to compensate wholly or partly. We would never know as it is likely buried in various other discounts and contract terms not a line item that says "for tariff". Down the chain, others with margins could have done the same. That's probably why the inflation impact was less than scary scenarios painted by some economists.
Sometimes the consumer (more) directly pays when buying from overseas, most of the time you're right it gets rolled into the price at checkout if the company is large enough or just in larger prices buying in the US. I've had a few packages I had to pay extra import duties on with the UPS/FedEx agent fees tacked on top mostly kickstarters.
Understandable. With the intentional chaos since last year, tariffs were changing mid-shipment without any prior notice.
It's less that and more that the sender just didn't arrange to prepay it for the receiver rather than it being in flux. A lot of shippers do handle it to avoid the surprise for customers but some didn't have the setup to do the prepayment.
What I think is interesting is if there is going to be a legal distinction between a seller raising their prices 10% for the item itself vs. a seller charging a separate line item for tariffs/customs/duties.
I can see a situation where the courts find that a general price increase is simply they - an offer to sell at a price the buyer accepted regardless of the seller's motivation to increase pricing. However a line item that very clearly states that a charge is for duties paid might be treated differently?
Very curious to see what the legal minds have to say in this scenario. In a way it may punish companies for doing what many to most consumers feel was the "right" thing to do - add a surcharge that can easily be removed if the situation changed in the future vs. using a general increase as a new price anchor.
You are right but the current admin arm twisted folks from showing that kind of line item.
Or the government will not refund, and add more illegal tariffs. That wouldn’t be surprising, unfortunately
> 4) Seller gets to keep the returned tax money as pure profit
Seller may not reduce the price as well. Thus, continues to keep the raised price due to tariffs as free profit.
Unless there's only one seller, why won't one of them just lower their price slightly to gain a market share edge and increase their total profit (even if margins slightly drop)?
In October, I bought a $250 product from a Canadian company + about $30 shipping & taxes and thought I was good. A few weeks later, FedEx sends me an $92 bill for the duty that they had to pay. I just ignored it since I was never given that notice up front. If they really wanted it, they could have had the vendor contact me. But at least they're not getting that bit of profit now.
For what it’s worth, FedEx paid the tariff on your behalf .
You owe them, and I wouldn’t be surprised if they withhold future packages to your address until you settle up.
If they’re smart, they set it up so you owe the government.
I'm also ignoring a bill, from UPS, that is a few bucks of duty and a much larger $14 fee. Presumably the large fee is because UPS isn't meant to collect taxes, but they can suck it.
they may start rcharging you warehouse storage fees and demurrage fees. chec out what happens if you dont take the delivery
>> 1) US customer pays huge import tax on imported goods in the form of higher prices.
Not according to the current administration: https://www.youtube.com/shorts/CODFD3j623E
According to them, China and others are paying the tariffs, so any refunds clearly have to go to China...
You are downvoting the messenger. In a way...its an IQ test...
"Trump says China is paying for his tariffs" - https://www.nbcnews.com/politics/donald-trump/fact-check-tru...
"Trump Incorrectly Has Insisted ‘China’s Paying the Tariffs’" - https://www.nytimes.com/video/us/politics/100000006661985/tr...
"Fact check: Trump and Vance keep falsely describing how tariffs work" - https://edition.cnn.com/2024/09/09/politics/fact-check-trump...
I think people are getting ahead of themselves on the refund business. Refunds might be on the table, they also may not be. It may be a years long battle. Trump and co might put up enough resistance that many firms find it too costly to fight.
There are usually a few companies between the importer and the consumer. So the importers could only refund the business they sold it to and likely won't if nothing was specified in the purchase contract.
Though this is obviously a first so expect a billion lawsuits about this.
> Seller gets to keep the returned tax money as pure profit (no refund to customer)
Elections have consequences.
5) US Gov uses a different law 6) Go to step 1
yes, because the US elected a clown, and this is the clown show.
When I have bought things internationally, I have always been the one doing the importing. This means I paid some Trump taxes and I will get my money back.
I hope so!
Trump responds that it will be litigated, like 5 years worth . . .
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Most of the total tax collected seems to have been absorbed by the importers, lowering margins.
Where did you hear that? It is conclusively the opposite: https://www.cbsnews.com/news/trump-tariffs-consumers-busines...
The price of googs this last year bed to differ. Maybe for some bigger companies on certain products but what stores like Walmart did was spread the price increase across all products so it wasn’t as obvious. And that’s now where it’s going to suck the most, prices are not going to come down. Ends up being a free handout to them.
Why do we repeatedly say that tarrifs are passed off in full to the consumer in the form of higher prices? Isn't that as obviously wrong as the argument for them, that they're paid entirely by the other countries?
Is there a reason to believe, or evidence, that it's not a mixture of the two?
edit: I want to highlight esseph's reply has a link to evidence that last year's tarrifs were passed off 90% to consumers, which is exactly the type of info I was looking for.
"American consumers bore 90% of last year's nearly six-fold tariff increase, adding $1,000-$2,400 to average household budgets, despite overall inflation dropping to 2.4% in January 2026."
https://www.forbes.com/sites/petercohan/2026/02/15/consumers...
Exactly the type of info I was hoping for, thank you.
Here's evidence : https://www.kielinstitut.de/publications/news/americas-own-g...
"Importers and consumers in the US bear 96 percent of the tariff burden."
I have to assume that some of that 4% has second order negative effects on US importers and consumers.
Profit margins can not always go down by 4% and in those cases goods and services would then not be available to US importers and consumers is only one example.
My assumption is that the 96% statistic does not fully encapsulate the negative costs to consumers. I have to to wonder how much higher the burden is over 96% when all second order effects are taken into account.
That's not just consumers. That is "importers and consumers"
Importer != Consumer. I think that's very obvious to anyone paying attention to this whole thing. In fact, it's a small minority of imports that are direct to consumer.
It absolutely is a mix of the importer (e.d. manufacturer, producer, wholesaler, retailer, etc.) absorbing some in their margin and the consumer picking up the bill via price increases for the rest.
It's quite obviously not 96% being paid by the consumer across the board just from looking at the CPI numbers.
All this study states is the obvious: foreign producers didn't lower their cost by much in response to tariff burden. They largely charged the same rate to a buyer in the US vs. a buyer in Germany.
This isn't to defend the tariff situation - just that this study gets trotted out a whole lot in an extremely disingenuous manner. Other data that exists is better that measures direct consumer impact.
The study makes it clear that the people footing the bill for the tariffs are in the US - it is not the rest of the world paying Trump's taxes, it's Americans, whether directly as consumers or importers.
For goods for which no domestic equivalent alternatives exist, why would the foreign suppliers lower their prices to compensate for the tariffs (which are paid by the importers to the government)? More generally, the cost of the tariffs will be split between foreign suppliers and local importers/consumers according to the competitiveness and availability of domestic suppliers, and according to market elasticity for the respective goods.
Well, they would likely have to lower their profit margin because the demand is reduced by the higher prices. Fewer purchasers will want to/be able to buy the item at the higher price. The supply and demand curve will find a new equilibrium, but it isn’t like the sellers are going to sell the exact same quantity of items with the price exactly increased by the tariff amount.
That assumes that demand is meaningfully elastic, that suppliers have room in their margins to absorb it, and that they're willing to. That is obviously not the case for a lot of things.
Products with inelastic or less elastic demand we can skip over because it's pretty self explanatory.
Products like the random cheap widgets a lot of us would buy from random Chinese sellers are often high volume low margin products with a lot of competition. Think about stuff like a USB->TTL serial board that's basically two connectors, one cloned chip, and a few supporting components on a single layer PCB. Hypothetically this is an ideal case for free market economics and these things should have already been basically as cheap as they can be at every step in the chain.
For less competitive items, particularly lower volume specialty items, a vendor may also decide that it's just not worth sacrificing profits in other markets by letting them know there's room to come down. A lot of the independent hardware designers I've been wanting to buy things from sell out every batch one way or another so they just don't care, demand exceeds supply even if demand from the US is reduced. Others have decided the volatility of the situation just isn't worth it with the risk of products getting delayed or additional charges added resulting in chargebacks and lost products and have simply stopped selling to the US altogether.
You know they can also sell to other countries than the US which would pay a higher price than the new lower price pre-tariff to the US?
Well, the analysis by the Federal Reserve said that domestic entities (consumers and companies) paid 90% of it. So, yes, saying that consumers pay it all is wrong, but it's less wrong than saying that foreign countries pay it all.
I don't recall seeing a split between domestic consumers and domestic companies, but I'm fairly sure that consumers are paying more than the 10% that foreign entities are.
> by the other countries
That makes zero sense. You mean “by lowering the profit margin on the goods sold to the US by that specific company”.
Countries don’t pay tarrifs (bar state intervention), companies do.
But yes, it’s probably a mix of the two: raising prices and lowering profit margins.
It is a mixture of the two. But my reading of various studies indicates that in this mixture, the majority was passed to consumers in the form of higher prices.
What an odd thing to say.
The businesses in the other countries are, you know, businesses. Even if it were Chinese companies that were paying the tariffs, that will be baked into the cost of the good.
This is literally first-day economics. No such thing as a free lunch. The cost of the item that the end user pays should reflect all costs associated with production and distribution to that end user.
I have no idea how the fuck the rumor that these tariffs will be “paid by other countries” started. If there are suspicions that the tariffs are temporary then they might be willing to eat the cost temporarily so it’s not passed onto the consumer immediately, but that’s inherently temporary and not sustainable especially if it would make it so these companies are losing money.
https://en.wikipedia.org/wiki/Tariff
A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials and is paid by the exporter.
If an analysis says that "domestic consumers are paying 90%" of a tariff then they are simplifying the process that others are describing here as "baked into the cost" and I would say, more accurately, "the cost of tariffs are recouped from consumers/businesses by those who paid them (the importer)" The economic burden of tariffs falls on the importer, the exporter, and the consumer. [Wikipedia]
If economists are saying "consumers pay tariffs" then I would expect to see a notation on the price tags and a line-item on my receipts, but the cost of the tariff must be paid by the importer, or there won't be a consumer who can purchase the goods, let alone bear the costs of their tariffs.The importer is the consumer...
> then I would expect to see a notation on the price tags and a line-item on my receipts,
Trump started threatening anyone who was going to do that, because he doesn't want his face attached to price hikes.
I am just saying that it eventually is paid by the end user, regardless of the bureaucratic steps in between. We can try and figure out who is directly paying them but I feel like that detail is unnecessary to my overall point.
US Consumers pay in fungible dollars, and so if your company paid for three pizzas eaten by an AWS team, and I paid for 1 ounce of Maersk fuel oil, and our Starbucks venti latte purchases paid to rethatch Juan Valdez's hut, who can even trace the serial numbers on our $1 bills?
A tariff is included in the cost of a product by the final seller. The final buyer ultimately pays the tariff.
It doesn’t matter who sends the actual tariff payment, it gets priced into the cost of the product.
It wasn't a "rumor" it was explicit deliberate disinformation. Unfortunately many people in the US have insufficient education and accurate news feeds to realize.
See also: disinformation that "other countries charge us the same tariffs", which turns out to be either a plain lie, or they mean VAT (a sales tax, like we have in the US).
Here's Trump's claims debunked in detail: https://www.factcheck.org/2025/08/recapping-trumps-deceptive...
"But we found that Trump’s so-called “reciprocal” tariff rates weren’t based on tariffs that other countries charged on goods coming from the U.S. Instead, the Office of the U.S. Trade Representative came up with the rates by dividing the size of a country’s trade imbalance with the U.S. in goods by how much America imports in goods from that nation. "
> The cost of the item that the end user pays should reflect all costs associated with production and distribution to that end user.
Eh, standard business school logic these days is that if you want to maximize profits, you should charge what the market will bear, not your costs + some fixed profit.
So if you're already charging what the market will bear, there may be more wiggle room to absorb some of the hit of tariffs, so long as it still leaves you making enough profit or in a favorable position. It still comes down to what maximizes tariffs: at higher prices, demand drops, but at lower prices, your profit/item drops.
Still, yeah, from what I understand, the bulk of the tariff costs were passed along to customers.
Sure, there might be some wiggle room in some of the margins, and when tariffs were like 10% that might have been something close to “sustainable”, but that doesn’t extrapolate forever. When Trump enacted 125% tariffs on China, they by definition couldn’t eat the cost.
> I have no idea how the fuck the rumor that these tariffs will be “paid by other countries” started.
It's what POTUS was saying since day 1. That we've been getting ripped off and we're gonna make the other countries pay us etc etc etc.
It is, as I said in the post, obviously wrong - but that's where it comes from.
Well its completely wrong. Tariffs are regressive consumer taxes that hurt people who make <$200k/year the most while enriching the inner circle of crony capitalism. Corrupt and should be prosecuted for such criminal robbery of the American people
I guess I mostly don't understand how anyone believed it.
He ran on lowering grocery prices, and he was going to do this by making tariffs. So his plan boiled down to "I'm going to lower prices by raising prices".
With Trump it can be tough to tell if it's idiocy of malice but at some point I suppose it's a distinction without much of a difference.
I've had multiple HNers message me saying that their gas bills and grocery prices have never been lower, and that since day 1 of the new administration prices have dropped. Looking at trends across all states, I wonder how they came to that conclusion at all.
Maybe they’re weird outliers, but I’ve noticed with stuff like this that people will just make shit up.
It's much more true than saying that the foreign company pays it. Depends on how much slack there is in profit margins for both the exporter and importer, but the consumer does pay most of it, like 90%.
I recommend that commenters shell out and pony up for a thesaurus before its import duty is magnified sixfold.
Does anyone have a good explanation on how supposedly other countries were paying the tariffs? If so, nothing would deter the american consumer from buying foreign?
Useful site for daily tariff updates: Trade Compliance Resource Hub.[1] They've marked which tariffs are now invalid and which are still valid.
[1] https://www.tradecomplianceresourcehub.com/2026/02/20/trump-...
This law firm seems to be on top of changes. The site just updated with Trump's latest proclamation.
Section 122: Implemented (effective Feb. 24, 2026) [1]
That's Trump's new 10% tariff applied to most countries. There are some exceptions. Most of the extreme per-country tariffs are gone. For now, anyway. Trump may add Section 201 tariffs later, but those are per product category. What Trump can do in this mode doesn't include most of his per-country "deals".Amusingly, the new 10% tariff doesn't apply until Feb 24th, so you have a few days to avoid it. All this expires July 24th, because the law being invoked here has a time limit unless Congress extends it.
[1] https://www.whitehouse.gov/presidential-actions/2026/02/impo...
> because the law being invoked here has a time limit unless Congress extends it.
Like many similar US laws it probably has a time limit expressed in lapsed Congressional days.
Heavy emphasis on "Congressional days".
Catch me up here, has the Congressional "clock" (count of lapsed days) been restarted since the current admin shut it down as almost the first order of business for 2025?
https://news.ycombinator.com/item?id=43358343
Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day for purposes of section 202 of the National Emergencies Act (50 U.S.C. 1622) with respect to a joint resolution terminating a national emergency declared by the President on February 1, 2025.
Is it still "legally" the first week of the 119th United States Congress 11 months later ?The IEEPA one works where it can last as long as the "emergency," which Congress can vote to end. The "days don't count as days" game just lets the House have an easier time of not bringing it up for a vote.
This other authority is different: it's limited within the law to 150 days and then has to be extended by Congress. So the same kind of strategy of just avoiding a vote doesn't work here. They could monkey with the deadline, but can't do so any more easily than just actually extending the tariff for real. Of course just like today you can have Trump jump to some new authority on day 151 instead.
> it's limited within the law to 150 days and then has to be extended by Congress.
Isn't that one also limited to targetted tariffs? He's applied it worldwide...
> Of course just like today you can have Trump jump to some new authority on day 151 instead.
Of the many articles on this matter written in the last 24 hours, a few that I read sketched out other sections of old never used law that Trump might land on after the current "new" 10% tariff expires its 150 day life.
While I'm not a fan .. credit to the Project 2025 people behind Trump that really put the effort into gaming out the overthrow of the established post war US order .. seemingly no loophole left unexplored.
It couldn't happen to a more deserving act of vengeance.
Apologies, but I'm having a hard time parsing your sentence.
What exactly are you saying?
The GP is using a snowclone of the original: "It couldn't have happened to a nicer guy".
For example, if your boss is very rude and disparaging, but then he gets fired, you would say, sarcastically, "It couldn't have happened to a nicer guy", implying there's some element of karma at work.
By analogy, GP is saying these tarrifs were an undeserving act of vengeance. I assume "undeserved" in the sense that it wasn't deserved by those on the receiving end.
Roger. Surely it's twisted a bit more with the kind of things Trump spews, but for instance a great leader wins a well-deserved Nobel Prize, and you say it couldn't have happened to a more deserving contender.
You say the same thing when a complete moron fails to win the same prize.
Equal fairness to all ;)
Ah.
Thank you. :)
Free trade is leftist now?
I thought a minute ago "communist China" was the protectionist one and "free capitalist America" was the one in favor of free trade.
I remember the anti-WTO protests and the peripheral movements that sprung out of that like No Logo, and the sneering directed at the anti-globalism protesters from people like Paul Krugman, who swore that the Great Depression was caused by Smoot Hawley and insisted there would be massive gains from trade.
Later, he fessed up and said that was another Noble Lie. There has been a lot of lying in the history of the economics profession, unfortunately, all for the greater good, I'm sure.
When these tariffs hit, I also expected broad price increases as well as a recession, when this didn't happen, I began to reassess some things.
In retrospect, I think that the massive expansion of investor rights in the late 1990s and early 2000s, culminating in the Clinton era agreements, was not really about trade at all, but about power -- e.g. getting the rest of the world to adopt legislation and reforms that would enable foreign investment/outsourcing.
I don't think the American consumer benefitted a whole lot, nor the American worker, from this movement.
I also don't think the rest of the world benefitted, apart from East Asia, but the East Asian countries famously industrialized not by pursuing unfettered trade, but by pursuing an export-led growth model with limit controls on capital inflows. E.g. they restricted trade by restricting foreign investment, the exact opposite of the WTO consensus.
Part of the reason I don't think trade was all that important, and what is important to the western consensus is investor rights and subordination of national policies is that the US has no problem levying sanctions on a large part of the world, and when these sanctions are levied, you hear barely a peep coming from the press or from economists about these sanctions.
Likewise, the EU just imposed massive sanctions on Russia, generally with the broad support of their think tanks and economic experts.
So I think trade in general is just a lot less important than we have been told. The real prize were the investor rights agreements and agreeing with western geopolitical goals.
I mentioned this to a friend who was bemoaning the terrible human rights situation in Iran, and I pointed out the human rights situation in Saudi Arabia, and said the moment KSA directly challenges western power in the same way Iran has, you will start hearing all sorts of complaints about human rights in Saudi Arabia.
It's not about human rights either. Just like it's not about trade.
I think these types of situations are a real test of character for the experts. It should be an eye opening moment for a lot of people.
> When these tariffs hit, I also expected broad price increases as well as a recession, when this didn't happen, I began to reassess some things.
"this didn't happen" except for the over $1,300/household in tariffs paid for by us, directly attributable to tariffs in A SINGL YEAR, that is.
Why do you call it investor rights when you have in mind power via sanctions?
To me, the latter is an outcome of the former. So the ultimate goal is to integrate the nation in a subordinate role into the western system, and a range of pressures levied against nations that refuse that. Investor rights is a key part of that because it means foreign capital floods into the country, buying up assets, funding political parties and local NGOs. The result of that is that western satellite offices offer the best jobs for local elites. It completely changes the local society and aligns the interest of local elites with western interests.
Once a nation is integrated into that system, the US can, for example, disrupt their economy by freezing assets or imposing sanctions because now the elites will lose their jobs, and this is often enough to change the government policy. In this way, we exert enormous control over the domestic politics of other countries. We do not care so much about deindustrialization in the US or the foreign nation losing key industries. This is basically how the US pulled Armenia into its orbit, but not only Armenia, many other countries have been subordinated to US interests in this way.
It's similar to how, in the European financial crisis, the European Central Bank was threatening to destroy the banking systems of Ireland or Spain if they didn't adopt certain political policies that Brussels wanted. They caved. The ECB would not have the power to do this if these nations refused to adopt the Euro or to be integrated into that system. The same thing was done to Greece. First a rush of foreign investment into Greece, then a debt crisis, and now the EU is dictating domestic political outcomes in Greece. Remember that foreign investment is just another way of saying foreigners hold your debt and own your assets.
This is why China has strict limits on foreign capital inflows. It does not want to be integrated as a subordinate role into the Western system. Russia also has adopted this role. I am not saying this as an enemy of China or Russia, nor am I an an apologist for them. What I'm saying is that their policy is rational, just as the east asian nation's mercantilist development model was also rational. It worked! This despite the classical economic critique. That tells me we don't really know the full story when it comes to trade and development.
I'm also not saying that classical economic welfare arguments for trade are entirely wrong. A trade restriction should have an effect of raising prices and reducing output. But clearly a 15% rate is not particularly noteworthy, given that 70% of our economy is services. The freakout about the tariffs was primarily political, because the tariffs were levied against allies not enemies, and they were levied with the aim of encouraging domestic production, not overthrowing geopolitical rivals. This is why the Europeans, in particular, were so offended by the tariffs. It was certainly not love of free trade, given the rising number of sanctions enthusiastically adopted by Brussels.
Anything other than fawning allegiance to whatever Donald Trump said most recently is "leftist" now.
Did you even see the press conference? There is now an additional 10% tariff. Like I said before, your short term victory was quickly extinguished with additional tariffs. The Supreme Court just ruled that this specific tariff tactic could not be used. So an alternative tariff plan quickly replaced it.
It disturbs me to see this behavior in my country alt-right voters, or better said, fanatics. The party is full of contradictions, and they will go with the flow, double down and rationalize all of them.
Maybe the problem is that they make it part of their identity. Voting for a different party according to their agenda is reasonably easy, but it's hard to reject who we are.
In the end, they're supporting a lying, corrupt, violent, fascist party and they don't see it - to them, it's the other parties doing that, even though this one has the most accusations (with evidence backing them up, not just made up).
We already knew that Trump didn't care what the courts said, America is pretty much dead with trump, so nothing shocking, your deserved vengeance wasn’t delivered.
This may not reflect the tariffs shipping and customs attempt to gather. Generally shipping companies just comply with what the customs agents say is required and at least publicly the Trump admin is saying they're going to continue collecting last I heard.
Great news for people who had to bend over backwards pretending this disruptive, nakedly corrupt behavior was "good, actually."
But unfortunately, there are other channels for them to effectively do the same thing, as discussed in oral arguments. So still not a major win for American manufacturers or consumers, I fear.
> Great news for people who had to bend over backwards pretending this disruptive, nakedly corrupt behavior was "good, actually."
Actually they’re still doing it. I saw it not 2 minutes after seeing this post initially. The justifications for why they were “good, actually” has gotten increasingly vague though.
Sure, but now SCOTUS can say they are not a rubber stamp for POTUS. "See, we just ruled against him. Sure, it's a case that doesn't really solve anything and only causes more chaos, but we disagreed with him. This one time."
> ...but we disagreed with him. This one time.
They've actually done so numerous times already and have several cases on the docket that look to be leaning against him as well. There's a reason why most serious pundits saw this ruling coming a mile away, because SCOTUS has proven to not be a puppet of the administration.
Yeah.
If you look a little closely you'll see their current project is to establish the "major questions doctrine," which ultimately reduces executive power by stopping Congress from giving it all to the executive. It looks pro-POTUS when it reduces the power of executive agencies, and it looks anti-POTUS when it reduces the power of executive orders. It's really about resetting what powers Congress can delegate.
If so that’s great. Congress has long become too complacent and willing to just wait for their parties turn to use presidential overreach.
It is not. The conservative justices work to create imperial presidency with no checks, except in major economical issues that threaten to harm themselves.
And even this ruling had 3 of them objecting, claiming tariffs should stand.
>because SCOTUS has proven to not be a puppet of the administration.
Several justices are openly taking bribes
[flagged]
No. Like actual bribes over a 20 year period.
https://www.propublica.org/article/clarence-thomas-scotus-un...
https://www.propublica.org/article/clarence-thomas-harlan-cr...
Granting the argument that these are bribes, I don't see how one (not several) justice taking bribes from not Trump means the Court is in Trump's pocket.
I think it's already clear (https://news.ycombinator.com/item?id=47093049) that you struggle a bit with causality.
https://www.citizensforethics.org/news/analysis/harlan-crows...
> Harlan Crow is more than Supreme Court Justice Clarence Thomas’s secret patron—he’s also deeply intertwined with the shadowy world of Republican dark money. In fact, Crow personally took part in the creation of the post-Citizens United dark money system and secretly helped bankroll some of the new groups.
I'm waiting for the link between _Trump_ and alleged bribes to Clarence Thomas.
Despite the "where there's smoke there's fire" idiom, smoke is not fire. You still have to find the fire if you see smoke before you call it fire.
By the analogy, your going linking smoke A to smoke B to smoke C and claiming Fire A caused Fire C. The same broken logic you used in the linked thread.
Proposing an explanation that fits the facts doesn't prove that explanation correct and, more importantly, it doesn't disprove any other explanation that also fits the facts.
Anyway, I stopped responding to the previous thread because your conspiratorial thinking is impervious to argument. If I had noticed it was you I was replying to, I wouldn't have replied.
> I'm waiting for the link between _Trump_ and alleged bribes to Clarence Thomas.
Republican activists bribe Thomas for decades. Republican president in office with… significant need for friendly SCOTUS decisions, and got to appoint several of them.
Connecting those dots seems... trivial?
Except for all the other blatantly unconstitutional rulings in his favor. Presidential immunity one will go down in history as a black stain on America and the courts.
and still this current ruling was a 6-3 vote.
I was flabbergasted that SCOTUS actually said that the concept of no man being above the law had caveats.
Earnestly, I think you need to actually read that opinion. They said some things the president does, he is immune for. And they pushed it back down to the lower courts to define the categories of official acts they laid out.
A hallmark of the Roberts court is leaving something technically intact, but practically gutted and dead.
You can still technically bring charges against the president for things they do while in office.
Practically speaking, after that ruling, you cannot, short of hypothetical scenarios so incredibly unlikely and egregious that even the incredibly unlikely and egregious acts of this administration don't meet that bar.
AFAIK bringing charges in office had much less to do with that case. It was dismissed because he was elected president. Which seems more like a pacing problem for the prosecution. In office, they are the prosecutions boss. You’re never gonna be able to charge a sitting president. That’s what impeachment is for. Then you prosecute.
It was pacing issue only because supreme court created lawless situation. The current state of things is literally their ideological project and work succeeding.
The initial indictment wasn’t until Aug 2023, 3 years into Bidens presidency.
there is no just world in which that man is not in prison for jan 6th and his corrupt handling of classified documents
I never said the world was just. But that doesn’t mean the Supreme Courts decision was as blatantly ideological as everyone imagines. Thomas concurring opinion was blatantly ideological as all his opinions are
Kavanaugh's dissent it honestly deranged
Yep.
The president doing horribly fascist things with ICE like obliterating habeas corpus? Using the military to murder people in the ocean without trial? That's fine.
Screwing with the money? Not okay.
See also how the prez is allowed to screw with any congressional appointees except the federal reserve.
When they rule for Trump it’s proof they are just a rubber stamp. When they rule against Trump it’s somehow also proof they are a rubber stamp?
SCOTUS rules for the rich and powerful. Most of the time Trump is aligned with them. Sometimes he does dumb shit like tariffs, or things that upset the order the rich and powerful want to maintain, and they rule against him.
How do you not see how they got that from what you wrote?
The argument is obviously that this is not enough to disprove rubber stamping.
"also proof" is a strawman, plain as day.
Is this a serious question? Hahah
The damage goes far beyond the wallets of business and consumers. The unilateral, arbitrary tariff setting has little do with money and everything to do with the power it gave Trump. And was one of the primary instruments used to destroy relationships with our foreign allies including our closes neighbor..
To that point it was always relative to the advantage it gained overall when used as leverage for negotiations, now the issue is what other forms of leverage remain? Whether the outcomes of the agreements are good or not is one thing but there’s room for the argument that perhaps tariffs are a better form of leverage when compared with other available options.