How does the tariff pay for the wall?

How does imposing a 20% tariff encourage Mexico to pay for the wall?

Is it because less people will buy the product, forcing Mexico to dish out the money for the wall? I'm confused here.

Bump

Trying to argue with libshits here. Need a response.

by increasing the price of Mexican goods it makes it so American companies to look elsewhere for those products. This will cause Mexican companies to put pressure on their government since they lost all that business. In all likelihood Trump doesn't expect them to pay for the wall, but expects them not to fight him when it comes to border issues, and to get rid of the trade deficit. He always take a strong negotiating position.

it is a negotiating tactic. it will let the warlocks and mexican intellectuals realize that simply paying for the wall will be the far cheaper option.

the art of the deal

/Thread

Alright I will try to explain it, just to make clear there is no direct answer. It all depends on different variables.
If you hear economists or journalists claims x will happen because of y, they're lying.

1. Trump imposes a 20% import tariff on Mexico.

1.1 Mexican companies will raise their prices with 20% to nullify the tax, making the consumer pay for it. Keep in mind that if Mexican products rise 20% in price, people will be les inclined to buy them due the fact that they lost their 'cheap' status. (there could be US products with the same price)

Mexican sales-rate drop

1.2 Mexican companies will reduce their profit margin with 20% to keep their marketshare. This will lead to lower profits but an unchanged situation for the consumer.

Mexican profits drop

1.3 Mexican companies don't want to lose their marketshare or profits so they will start moving to the US and produce their products there to bypass the import-tax.
logic = paying 20% on every product the coming 20 years >= building a factory in the US?

a 20% tariff on imports from mexico would bring in over 50 billion dollars in revenue, if we use 2015's numbers for imports. More than enough to pay for the wall

So what happens when they say, "no"?

jfc it's like a glass of inner city niggers discussing economics in here

Here's how a tariff works

#1. Import good
#2. Sell good
#3. US takes 20% of the gross

So if Mexico sells a car into the US for 10k, US will reap 2k from them. If they raise the price to 12k the tax becomes 2.4k.

They willingly fuck themselves and have (more) riots on their hands.

Then americans have to pay 20% for products made in mexico, meaning people will be encouraged to buy from china instead.

>a 20% tariff
Tariff is another word for tax dumbo. The Mexicans selling stuff in the US will have to pay the US Government 20% of the price as a tax.

this

Meaning the consumer pays for 15% of the wall in your scenario.

Just like any business tax, the cost will be passed on to consumers, one way or another. It baffles me that conservatives who understand this fact when we're talking about corporate income tax are so willfully blind to it when Trump is proposing a tariff.

mexico already paid for the wall

It's a bargaining point. HE will tell them that if they pay for the wall, he will drop the tariff to 5% or 10%.

Pic related happens

You keep thinking that the American consumer market's prices are determined by the good or service's innate value.

The price is determined by what people are willing to pay. That's flexible but not 20% flexible. What it's going to do is bring all these companies that are based in the US but use outsourced facilities to manufacture goods, back into the US and employ Americans will full time middle-class jobs.

College grads shouldn't be flipping burgers or working at starbucks. They should be running CNC machines and welding, getting paid a good wage for it. Like we used to a few decades ago, before deregulation at the behest of (((Economists))) like (((Milton Friedman))), who while having a lot of good things to say; seemed unable to recognize that global free market is a rat-race to the bottom for 99% of the human population.

that's gonna be US reality regardless of how your little trade tussle goes

Wettest year in HISTORY for california, best time to impose tax on produce imports. We'll have a bumper crop and no competition.

Hope people are ready to pay $0.25 for an avocado.

Let's assume that's all true. What makes you think that won't cause prices to increase even more than 20%? People won't pay more than they'll pay. But companies won't sell at a loss, either.

But that's all irrelevant, since none of it adds up to mexico paying for the wall.

That assumes that Mexico is the only source for the product. If it's a commodity with many different sources the price to the customer may not rise at all.

And while all businesss do try to pass on costs to the customer they are not always successful. For example I have a house that rents for 1300. If the HOA (DAMN THEM) raises my fees from $75 to $180 a month I would have a difficult time passing that on to my customer, since other landlords are still offering similar properties at 1300. I may have to eat the whole cost.

I assume you mean minimum wage increases (across the board price increase) and not income tax, since income tax is after profits and easily avoided with accounting.

CRISIS

If we're talking commodities, then mexico will just stop selling to the US. There's no way a supplier of a commodity can pay a 20% tariff and not be selling at a loss. So in the commodity scenario, imports from mexico go to zero, tariff generates zero revenue. Ergo, mexico is not paying for the wall.

Your rental-house example is more or less the same. If you're still profitable with the increased fees, you might just eat the cost. A larger fee increase would force you to either raise your rent or exit the market.

And I was talking about corporate income tax. Lefties are constantly bleating about raising corporate income taxes, and righties always respond that consumers will be the ones ultimately paying it. If you think you can just make profits disappear with accounting tricks, then all the accountants in the Fortune 100 must be incompetent.