President Trump is proposing a 20% tax on Mexican imports which he says will pay for the border wall.
That tax will largely be passed on to consumers in the form of higher prices for those imported goods, which tend to cost less than the equivalent US made products anyway. So now consumers will be paying more for the same stuff because the money to offset the tax the importer will pay will come out of their pockets.
For example, keeping the margins simple, a product with a landed cost of $10 might sell for $20 after wholesale and retail markups today; it will now have a landed cost of $12 and would sell for $24 assuming the same markups. That extra $4 is coming from the consumer.
So who is it that will really be paying for that stupid wall? Here's a hint - it's not Mexico.
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