EDINBURGH, Scotland (AP) — The United States and the European Union agreed to a trade deal setting a 15% tariff on most goods, President Donald Trump announced Sunday, staving off for now higher import taxes on both sides that might have sent shock waves through economies around the globe.
International trade is often done simply because it is cheaper. China is a manufacturing hub for a reason.
If European cars are more expensive people will buy an American car faster for example.
So, do you imagine there are factories producing goods that simply go unsold, (Tesla doesn’t count) just waiting for a reduction in foreign imports and/or an increase in price?
No, they’re producing to meet demands, having too much excess capacity is a waste of money, so they don’t have it.
cars are actually a funny example, because the tariff used to be 25%, so it actually decreased. But let’s pretend it didn’t. Let’s say a BMW just started costing 15% more, and people look for an alternative. They spot a US car, how much do you think that will cost? If you answered “14.5% more than yesterday”, you’re spot on!
But here’s the thing. There aren’t suddenly, magically more US cars to make up for the difference. The people who want that BMW-like car, will find it doesn’t actually exist at the previous price, simply because demand went up (and due to profit seeking).
Strange how you had to include “Tesla does not count” I wonder why you did that. Almost like you already know you are completely wrong and are admitting it.