I promised myself I would keep my mouth tightly sealed throughout this election season. But then Barack Obama interrupted my YouTube music program and told me I need to do something.
Well, here I am.
Here’s an example of how a tariff works. I’m pretty certain they all work in this fashion. I’ve been mentally explaining this to my Trump-flag waving neighbors:
For $10, I just bought a nifty little flashlight from Lowe’s. It’s LED and has batteries and three modes and is really nice.
It’s made in China.
We’re using round, simplified numbers for the sake of example.
I paid $10 for it, but Lowe’s, in order to pay their lease and their employees and their insurance, only paid $5 for it.
They bought it for $5 from a distributor who provides this kind of product to big retail chains. In order to pay his lease and his employees and his insurance, he marked it up to $5 from the $2.50 he paid for it.
He paid $2.50 to the importer, who… employees, insurance, etc., marked it up from the $1.25 he paid to the Chinese manufacturer.
Now, suddenly, there’s a 100% tariff on all goods coming from China.
The importer has to pay $1.25 to the Chinese manufacturer, and another $1.25 to the US government.
He can’t pay his employees or his lease or his insurance if he doesn’t raise his price, so he passes the increase on to the distributor. Instead of $2.50, the price now has to be $5.
The distributor has lost all of his profit on the flashlight at $5, and now must sell it for $10 to Lowe’s.
Lowe’s is big, big, but they can’t sell a product at cost or they’ll go out of business.
Now, when I go to buy another flashlight, son of a biscuit, it’s $17.50! Seems like just last month it was only $10!
At that price, it’s not such a good deal. Maybe I don’t want a new flashlight.
So, I don’t buy the flashlight – almost nobody does. Lowe’s actually stops selling them.
The distributor takes a huge financial hit on one of his biggest money-makers, and has to lay off half of his employees.
The importer goes out of business altogether because nobody in the US is buying what he imports. He lays off all of his employees.
Over time, the Chinese manufacturer will see that they are selling fewer flashlights to the US market, and will either make them more cheaply, or quit making them altogether.
At that point, the Chinese economy is hurt by the tariff.
Until that happens, it’s you and me paying the price of the tariff. And Lowe’s, and the distributor, and the importer.
A tariff is a tool, but it’s not a good concept of a plan for our economy. It hurts our country first.
That’s why I’m urging you, whether you’re red, purple, blue, or of no color whatsoever, to vote for Harris/Walz. Here’s a link to their website.
Choose freedom.
End of commercial.
John D Reinhart 
I got really in debt once, and boy did I have to pay to get out. There will be some medicine we got to take to heal our financial mess. We’ve tried the other way. Can’t keep doing the same thing. There comes a point you got to pay the fiddler. You’re probably right that it might be hard and we may suffer a little. The country spoke in a big way. I think most of us know you can’t keep doing the same thing. But we will see. Four years from now I might be crying in my tea cup wishing I had taken a different course. I guess time will tell and the jury is still out. You did a good job of explaining this, but most of us know. We just also know we got to fix this. 36 trillion. Unbelievable.
Donald, thanks for the comment. I should never have veered into politics – clearly my mistake.