this post was submitted on 06 Apr 2025
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Explain Like I'm Five
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If US companies are making cars and selling them at 20,000 each and another country starts importing their cars for sale at 8000 a piece, the government can put a tariff on that country’s cars to bring the price equal to or more than the 20,000 the US companies sell for so the US companies don’t go out of business by being undercut. The problem is that the other country can retaliate with equal or more tariffs if we import products there.
Tariffs are designed to be used prudently and only in extreme cases which would damage the countries business by radically different pricing of similar products.
The ham fisted broad tariffs that Trump is doing don’t fit any tariff model or make any sense.