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Tariffs only raise the money that people pay for. How many folks are just going to pay +25% more for anything than just buckling up and buying less?
Read another way, what part of the population does he think has $6 trillion sitting around?
The more likely outcome is decreased spending and either deflation or stagflation as the economy shrinks.
Raise $6T or transfer it from one class to another?
Asking for a former friend. You’re the economists.
That is $6 trillion from new tax called "Import tariff". Retail Price = Purchase Price + Transport Costs + Tariff + Profit Margin + Sale Tax
That's quite inaccurate. Many of these taxes are not additive but multiplicative:
Retail price = ((Purchase price + international transport costs) * tariff + national transport cost) * profit margin * sale tax
In other words, it's even worse than you wrote.
I tryed to be as simple as possible assuming that calculations were made separatly in different functions (programmer here). Anyway, tariff is a tax collected by custom office, payed by importer, included in final price that customer pays for the product.
Fait enough. I wanted to emphasize had bad this is on the purchase price, is all