Anasta Maverick
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#TrumpTariffs Many people hear the word "tariff" and assume it’s bad but don’t really get how it works. In simple terms, a tariff is a tax added to imported goods.
Let’s say China sells a phone to the U.S. for 7,000 RMB, which equals about $1,000. If Trump slaps on a 30% tariff, the price jumps to $1,300. That extra $300 doesn’t go to China it goes to the U.S. government.
Now, that higher price could scare off buyers, hurting the manufacturer’s sales and stock price. To stay competitive, the company might lower the export price to $800, so with the tariff it still sells around $1,040 in the U.S. But this also cuts their profit, which again hits performance and stock value.
No matter how they play it, exporters lose margin. And since many Asian countries depend heavily on U.S. markets, these tariffs put serious pressure on their companies’ earnings.
In short: Tariffs may look like a political move, but in practice, they raise prices, cut profits, and send shockwaves through the global economy.
Let’s say China sells a phone to the U.S. for 7,000 RMB, which equals about $1,000. If Trump slaps on a 30% tariff, the price jumps to $1,300. That extra $300 doesn’t go to China it goes to the U.S. government.
Now, that higher price could scare off buyers, hurting the manufacturer’s sales and stock price. To stay competitive, the company might lower the export price to $800, so with the tariff it still sells around $1,040 in the U.S. But this also cuts their profit, which again hits performance and stock value.
No matter how they play it, exporters lose margin. And since many Asian countries depend heavily on U.S. markets, these tariffs put serious pressure on their companies’ earnings.
In short: Tariffs may look like a political move, but in practice, they raise prices, cut profits, and send shockwaves through the global economy.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.