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[quote=Anonymous]
From Paul Krugman, the Nobel prize winning trade economist.  For those who can't be bother to read, US businesses are paying for tariffs, and yes, they will pass it on to you the US consumer.
The Art of the Really Stupid Deal
Paul Krugman
In a matter of months, we’ve gone from a regime of very low trade barriers — achieved through generations of hard bargaining in international trade negotiations — to Smoot-Hawley-level tariffs. Many businesses, however, have taken comfort in the belief that extremely high tariffs were temporary, that they’d come back down as Trump began making deals with other nations.

But Japan has struck a deal — and is left facing a tariff of 15 percent, compared with an average of 1.6 percent BT (Before Trump.) Reports suggest that a similar deal may be coming with the European Union. At this point it looks as if we’re heading for a new normal in which most imports are taxed at 15 percent, while some face even higher tariffs.

Trump claims that foreigners will pay these tariffs, and Trump apologists are pointing to consumer prices, which haven’t yet shown a clear spike, as evidence that he’s right. But they’re looking at the wrong price measure. What you want to look at are import prices — the prices foreign producers are charging America, prices tracked by the Bureau of Labor Statistics.

If Trump were right, we’d be seeing a large fall in import prices, offsetting the tariff hikes. It would look like this:

That is, if you look at the right price measures, foreigners don’t seem to be paying any significant share of the Trump tariffs.

Who is paying? So far, the burden seems to be falling mainly on U.S. businesses, which are definitely seeing a sharp rise in costs. Look, for example, at the Institute for Supply Management’s report on manufacturing, which asks purchasing managers whether their costs have risen. The percentage answering yes has historically been a very good predictor of inflation a few months down the pike. And we’re currently experiencing cost inflation at levels not seen since the summer of 2022:[/quote]

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