How tariffs work, or rather why they really don't.

[Crepitus]

Spelled out in a simple metaphorical parable.

A wealthy Cadillac dealer orders a pizza for his family every Friday night. His family loves pizza from a particular restaurant because it's the best tasting pizza and the Cadillac dealer likes the price. He's even developed a friendship with the pizza delivery boy who cycles several miles to bring them their pizza.

One day the Cadillac dealer is doing his accounts and has a thought: 'Over the years, I've given the pizza delivery boy thousands of dollars and yet never once has he bought a Cadillac Escalade from me. How is that fair? This guy is ripping me off.'

The more he thinks about it, the more angry he becomes.

'I'm running a massive trade deficit with that kid on that bicycle. He is deliberately not buying my cars to screw me over. I'm a Cadillac dealer and he's a puny kid on a bike. I hold all the cards. I'm going to put a stop to this.'

So, the following Friday night he confronts the delivery boy. 'You have been robbing me for years. I'm subsidizing your business with thousands of dollars and yet you never buy my Escalades. So, I'm going to impose a 50% surcharge on every pizza you deliver to this house and there's nothing you can do about it!'

The pizza delivery boy looks confused. 'I'm sorry but I couldn't afford to buy or run a Cadillac Escalade even if I needed one, which I don't.'

'I don't care,' says the Cadillac dealer. 'It's not fair me subsidizing you thousands of dollars. Why should I be paying you these subsidies?'

'Because you like my pizza and that's what they cost. That's not a subsidy. It's called trade,' answers the delivery boy.

'Well, it's not trade if you refuse to buy a Cadillac, so I'm going to charge 50% on top of the price of your pizzas so I get some payback.'

'Who are you going to charge?'

'My family!'

'How's that going to work?'

'They're going to be livid! They'll be so angry that the pizza is going to cost 50% more that they'll stop telling me to buy them from you. They'll start making their own pizzas and you'll go bust!'

'Can they make pizzas this good? Do they even want to?'

'That's not the point!'

'And how many more Cadillacs will you sell if we go bust?'

'Who cares? At least I won't be being ripped off by a mere pizza delivery boy on a bicycle!'

'OK. Here's your pizza. Keep the tip. It was nice doing business with you.'

Maybe this will help a few of you understand.

 

[okfine]

Take it out on the little guy. A real community builder.

 

[TroglocratsRdumb]

 

[Maxdeath]

I got to give it to you your understand of the real world or economics is really weird.

 

[Donald H]

For those who are 'sincerely' interested.

A wealth transfer from the poor and middle class can be imagined. They pay the high prices while the government and their very wealthy clients reap the benefits.

That's also consistent with Trump's overall needs.

This is the best answer so far for what motivates him on tariffs. He can always say that the profits made can and will be turned over to the working class.

 

[MisterBeale]

How to be a leftist:

 

[Donald H]

View attachment 1097555

Revenge to inflict pain on America, with their goal being to dissuade Trump.

 

[Calypso Jones]

If tariffs don't work why are other countries using them?

 

[Rawley]

Spelled out in a simple metaphorical parable.

A wealthy Cadillac dealer orders a pizza for his family every Friday night. His family loves pizza from a particular restaurant because it's the best tasting pizza and the Cadillac dealer likes the price. He's even developed a friendship with the pizza delivery boy who cycles several miles to bring them their pizza.

One day the Cadillac dealer is doing his accounts and has a thought: 'Over the years, I've given the pizza delivery boy thousands of dollars and yet never once has he bought a Cadillac Escalade from me. How is that fair? This guy is ripping me off.'

The more he thinks about it, the more angry he becomes.

'I'm running a massive trade deficit with that kid on that bicycle. He is deliberately not buying my cars to screw me over. I'm a Cadillac dealer and he's a puny kid on a bike. I hold all the cards. I'm going to put a stop to this.'

So, the following Friday night he confronts the delivery boy. 'You have been robbing me for years. I'm subsidizing your business with thousands of dollars and yet you never buy my Escalades. So, I'm going to impose a 50% surcharge on every pizza you deliver to this house and there's nothing you can do about it!'

The pizza delivery boy looks confused. 'I'm sorry but I couldn't afford to buy or run a Cadillac Escalade even if I needed one, which I don't.'

'I don't care,' says the Cadillac dealer. 'It's not fair me subsidizing you thousands of dollars. Why should I be paying you these subsidies?'

'Because you like my pizza and that's what they cost. That's not a subsidy. It's called trade,' answers the delivery boy.

'Well, it's not trade if you refuse to buy a Cadillac, so I'm going to charge 50% on top of the price of your pizzas so I get some payback.'

'Who are you going to charge?'

'My family!'

'How's that going to work?'

'They're going to be livid! They'll be so angry that the pizza is going to cost 50% more that they'll stop telling me to buy them from you. They'll start making their own pizzas and you'll go bust!'

'Can they make pizzas this good? Do they even want to?'

'That's not the point!'

'And how many more Cadillacs will you sell if we go bust?'

'Who cares? At least I won't be being ripped off by a mere pizza delivery boy on a bicycle!'

'OK. Here's your pizza. Keep the tip. It was nice doing business with you.'

Maybe this will help a few of you understand.

Seriously Creepy, WTF? Communist China is a pizza delivery boy? You need to log off and go for nice long hike today.

 

[Rawley]

I got to give it to you your understand of the real world or economics is really weird.

More like "misunderstanding"

 

[1srelluc]

If the guy was a moped dealer he might have a beef.

 

[Crepitus]

If tariffs don't work why are other countries using them?

How successful are their economies vs ours?

 

[Crepitus]

Seriously Creepy, WTF? Communist China is a pizza delivery boy? You need to log off and go for nice long hike today.

Maybe you need to look up "metaphorical".

 

[Crepitus]

I got to give it to you your understand of the real world or economics is really weird.

I gotta admit, I didn't really expect any of you to get it.

 

[Rawley]

Maybe you need to look up "metaphorical".

Backatcha Creepy. You told a story.

 

[Maxdeath]

I gotta admit, I didn't really expect any of you to get it.

Of course not your understanding of things is too simplistic

 

[Donald H]

I gotta admit, I didn't really expect any of you to get it.

You got it pretty much right on with your signature. Now it's obvious how you're making them crazy. And to add to that, they've completely hooked into Trump coming to their rescue.

It sort of had to happen that way, now that no more US led wars can work.

The reason why China and Russia have made Iran the big player in the ME now.

 

[Crepitus]

Of course not your understanding of things is too simplistic

LOL!!!

The simplicity is for you kids!!

I'm trying to help you.

 

[Maxdeath]

LOL!!!

The simplicity is for you kids!!

I'm trying to help you.

Then you’re just too simple for adults. Go play

 

[Crepitus]

Then you’re just too simple for adults.

Oh, if only you guys were real adults.

None of this would be happening.