Re:U.S. personal income posts first drop in over three years
by fountainofage on Friday March 01, 2019 @12:56PM
(#19283501)
It could also mean the demand for these items is very elastic, so manufacturers will have to eat the tax or higher manufacturing costs.
Re:U.S. personal income posts first drop in over three years
by nybble41 on Friday March 01, 2019 @02:29PM
(#19284416)
That assumes that manufacturers can reduce their margins without going out of business. That will not generally be true in a competitive market, however, since economic profit (which includes opportunity costs) tends toward zero.
You can put it off for a while, but not indefinitely. After all the justification given for the tariffs was to make less efficient local production more viable. Higher consumer prices are an explicit part of that calculation.