People buy foreign goods for one of two reasons. Low price or high status. Which applies to you?
Poor people buy foreign goods because they have no choice but to buy cheaper goods when they’re available, regardless of where they come from.
The irony is that poor people are more likely to be “team players”. They know that buying locally can help their neighbors, so try to use local businesses when possible. And that scales up to buying US produced goods, where possible, too.
The wealthy, however, buy foreign goods because of the status it gives them. A Jeep Grand Wagoneer may get them from A to B well enough, but it doesn’t shout “I’m better than you” like a Rolls Royce Cullinan does. Supporting local businesses is irrelevant to the wealthy. They prioritize spending more on products that both give them and highlight their higher status. They don’t want to be a team player, they want to own the team.
Tariffs make cheap foreign goods more expensive for the poor people who have to buy them. Ironically, tariffs increase the status of foreign luxury products, as high price is a large part what makes luxury products high status.
Targeted tariffs can help American businesses compete against unfair foreign competition. However, broad, across the board tariffs just make it easier for businesses that are badly run by lazy, wealthy owners to compete without becoming more efficient.
And those wealthy owners can afford higher prices because they’re in the wealthiest 10% of Americans, who hoard 67.4% of the country’s wealth, while the poorest 50% of Americans share just 2.5% of the wealth.
Should tariffs be used to protect key American businesses against unfair foreign competition or to make wealthy Americans even wealthier?
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