flown-the-coop said:
How are tariffs impacting Caterpillar when tariffs are nothing but an additional tax paid for by the customers?
Customers who spend more on products due to taxes buy fewer products because they have less money to spend.
Tariffs inflict pain. The question is, who bears the brunt of it? The free market advocates will point out (correctly) that, regardless of who fares worse, it ultimately makes the pie smaller for everyone. The tariff advocates are hoping that foreign producers are not in a position to pass the cost on to American consumers, and absorb most of the hit by accepting lower profit margins, and that American producers can benefit from an advantage over foreign competitors but that only happens in some cases. Tariffs probably hit components placed in US assembled products as much or more as foreign products sold direct to consumers in the US.
The other factor here is that, if we would ever find the courage to rein in spending, then tariffs might present an opportunity for us to lower our deficit spending because, like any tax increase is designed to do, they generate revenue for the Treasury. And, as much as no one wants to raise taxes, there is no indicating that the US electorate has the will to endure enough pain in the form of reduced government spending to solve the problem without raising taxes.
