Thursday, March 6, 2025

Barbarism is like the tide

 So. 
Tariffs.

I think that we've all understood by now that tariffs are a lose-lose situation
and that it's not the exporting country but the importer who pays the tariffs,
and who then charges it on the buyers. 

So if the US puts 25% tariffs on Canadian goods, then it's the customer in the US who will end up paying it. 

But
it's not as simple as that.


Let me invent an example, knowing that the countries who got 'tariffs' from the US, played the UNO reverse card and put up tariffs as well.
It's a made-up example, I know that's not what happens to have flour but I don't know enough about industry to give a realistic example.

Let's say I am an American baker and I want to bake a cake and sell it.
I will use 'only American products' to keep the price down.

So I start with flour, from wheat grown in the US. 
Except it has been exported to Mexico to be milled into flour --> + 25%
The flour then comes back to the US --> + 25%
The bulk flour is then shipped to China, where it is put in bags --> +10%
It is then transported back to the US --> + 10%
Where the electricity to make the cake comes from Canada --> +25%

The final customer will not pay 25% more just because tariffs are 25% ... The final product costs much more than that.
And that will be the case everywhere in the world, even for countries without tariffs, simply because prices will go up.

We live in a globalized world, very few things are 'made' in just one country.

We need each other.


The absurdity of it all 
is captured in this fragment of the Italian movie 'Nothing left to do but cry' ('Non ci resta che piangere') from 1984, from and with Massimo Troisi and Roberto Benigni.

Here with English subs:




clara




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 It's always a White Christmas somewhere in the world...         Clara