Comment by runako
12 days ago
The point of raising a tariff on a $100 imported good to make it cost $125 is because the US provider cannot profitably sell for less than $125. The tariff doesn't magically fix the domestic provider's cost basis.
If the US provider was able to compete close to the $100 level (as they already have incentive to do!), there would be no complaint and no need for the tariff in the first place.
Well taking that 34% number as reference. You could have been brought from 0% margin to 34% with a penstroke. US manufacturers were ground down just to the level of being unprofitable for the last 4 decades, of course they are close to the break even level.
Let's leave aside for a moment the notion that there are any significant number of US manufacturers making stuff for 0% margins.
So you suggest that increasing the tariff allows the US maker to increase their margin. We're not talking about them reducing input costs (in fact, the opposite in many cases), so the only way you could mean for them to increase their margin is by raising price. And to get the full benefit, you suggest they raise their price to match the price of the imports. And yes, this is what will happen, US makers will increase their prices because their low-cost competition is gone.
So you're now kind of agreeing with the poster you initially disagreed with.
(Of course, for many goods there are no US factories here and no reasonable ability to make the goods here at prices that would make sense, even accounting for high tariff barriers. So in those cases, consumers will just pay more for the same goods.)