Trump's Mexico import tax threat

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>>1759268
learn about price elasticity

mexico will take most of the burden generated by 20% tax, and us cizens will have minimal to no effect due to other subsidies

>>1759581

Not really. Mexican producers will just increase their price by 20% to compensate for the tariff. US consumers will therefore face a higher price on Mexican products, so they're the ones who don't benefit from this at all.
But hey, the US government gets richer, and a wall will be built!

>>1759268
so, are we really hurt by this or nah?

>>1759602

Are you stupid? I thought this was the business board. Mexican companies that sell products to the US WILL NOT change their prices. Trump's policies have no direct effect on the price of Mexican products, but in the price at which they are sold to the American consumer. That's how a tax works. The American people will pay in the short term since a 20% increase is nothing when Mexican products are as competitive as they are. If they weren't competitive prices it would make sense to tax Mexican products to give an edge to American products, but as they are right now, it will still be cheaper to produce in Mexico (even without NAFTA) when you consider that the federal minimum wage in the US is $7.5 an hour while it is $5 A DAY in Mexico. So for sure, the American people will pay.

>>1759602
What will happen is that the price will remain the same, the customers in the US will keep buying, but the workers will get a wage cut amounting to 20%, and the raw material supplies will be bargained down maybe 5 to 10%; both will be told to blame Trump.

>>1759704
>So for sure, the American people will pay.
Truth for the reasons you stated.

>>1759731

Not true.

>>1759636
You'll keep on buying the same shit but 20% more expensive, cause 'muh rights' redneck still does not stop consuming and he still can't compete.

Also, the 20% is only on the trade deficit, not on all trade, as far as has been stated.

>>1759755
oh, fuck that shit.

>>1759268
Depends on the structure of the tax, but basically without price fixing, any "tax" gets passed on to the end consumer. 20% import tax on shit just means everyone raises their price by 20%, and the revenue comes out of US citizens pocket. There is a bit of wiggle room in there for elasticity if demand and what not. The price may not rise a full 20% if there are American producers undercutting, but most of this money is coming out of our own pockets.

>>1759268
The cost of living disparity between US and Mexico is enormous. A 20% tax on Mexican imports would still keep them competitive. On top of that, the peso has been losing value, something /pol/ cirlcejerks about, which means their products are becoming cheaper to import. US manufactures will not be able to compete on price point even with the tax. With no US manufacturer able to compete you're left with buying from the same producer but it will now cost more. That means US businesses and consumers are the ones who are going to be paying that 20% tax.

I should note this "plan" was apparently Trumps' team thinking out loud, as they stated. It was also a proposed range of 5-20% possible tax on imports from Mexico and possibly other nations.

One last thing. US has a slightly higher trade deficit with Japan than with Mexico. Why doesn't he attack them as hard as he doing to Mexico? And of course there is China, with which the trade deficit absolutely dwarfs that of Mexico. Yet he's hardest on Mexico. Seems to me he's pandering to his voting base. Mexico is a weak state so it's easy to bully around and the proposed tax will give his voting base the impression that Mexico is paying for the wall and that it will bring back manufacturing to US. It won't but reality and politics rarely work in unison.

>>1760278
/thread

Great summary, couldn't have said it better myself. There's a reason those goods are imported from Mexico in the first place.

>>1760278
He pulled out of the TPP and wants to label China as a currency manipulator. He's been very vocal about CHYNA for a good long while now about how they're taking us to the cleaners.

>>1759581

This.

Also we can easily get goods from other 3rd world countries. Mexico is beyond fucked. Anyone with a basic understanding of business gets this.

Their presidents plea is in vain.

>>1760557
You're wrong, but let's play pretend like you are right.

>Mexico is fucked
>more Mexicans overstay their visas or employ coyotes because only the really fucking dumb ones run through the desert like a game of red rover
>the wall does fucking nothing
>illegal immigration is an even bigger problem

Way to go, trumpkins.

>>1760584
Additionally, if no American buys Mexican goods then the US tax payer pays for the wall.

>>1760376
He pulled out of TPP because pandering, and if he labels China a currency manipulator it'll increase the likelihood of the Chinese government saying fuck it and letting their currency float freely, which would crash the value of the yuan.

>>1760376
But TPP was an agreement *against* China. And now most countries currently/formerly in TPP want to join RCEP, China's version of TPP. So by killing TPP, the US is playing into China's hands. It's the one big inconsistency in Trump's actions, I can't get over.

These agreements are not about short-term gains. They're about long-term control. The same with TTIP. A combined US/EU market assures dominance for decades to come, because the biggest markets will obviously dictate most rules and regulations in international trade. China and India are on the rise and it used to scare the US shitless, hence why they wanted to form coalitions dominated by the US against them. Now China gets its turn and I don't think they'll pass up the opportunity.

Buy bitcoin inmediately. It's soon going to become the go-to tool for mexicans to keep sending money across the wall.

>>1760631
>Additionally, if no American buys Mexican goods then the US tax payer pays for the wall.

Well, Mexico would suffer if no American buys Mexican goods. Even if they don't front the money, they will "pay for it" with lower trade revenue.

Slap a 20% tax on Mexican goods and suddenly Mexican goods are no longer competitive with imports from other countries. Importers will try to pass the 20% tariff on in the form of a price increase for US consumers, but at that point US consumers have other options. The end result is that Mexican imports will be less desirable and importers will stop importing them.

Mexico will suffer because its imports aren't being consumed as much anymore, while Americans will see slight price increases as they turn to other countries for their imported goods.

>>1760650
>implying that China wasn't going to be allowed into the TPP after a year or two

The "it'll stop China guys" was just a meme to generate public support for it.

After it was ratified, China would have been in there within a year.