The white house numbers assume 75% of the tariffs will be paid by foreigners.
That’s actually not a crazy assumption for targeted tariffs. Imagine we only added a tariff to German cars. BMW and VW would have to compete with normally priced sedans, and lower their margins.
Of course, that doesn’t work if you tariff 100% of the suppliers of essential goods.
> BMW and VW would have to compete with normally priced sedans
What will keep the US auto makers from just being 5% under the imports' price? They will still win on cost, can blame Trump, and also capture all the money on the table.
That’s actually not a crazy assumption for targeted tariffs. Imagine we only added a tariff to German cars. BMW and VW would have to compete with normally priced sedans, and lower their margins.
Of course, that doesn’t work if you tariff 100% of the suppliers of essential goods.