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Politics : Formerly About Advanced Micro Devices
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To: Eric who wrote (1518355)2/1/2025 11:47:27 AM
From: Qone06 Recommendations

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bull_dozer
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Goose94
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I have my box of crayons out. I'm going to explain to the MAGA's how tariffs work using Walmart as a example.

Walmart is the single largest U.S. importer of consumer goods, surpassing the trade volume of entire countries 1. While Walmart is an American retail chain, not all products sold there are made in the US or supplied by American companies. Most of the United States still heavily relies on Chinese imports, including Walmart. Only roughly 20% of Walmart’s retail products are from US-based suppliers 2.

Some think the foreign companies that make the goods pay the tariffs, but the cost of a tariff is typically paid by the importer of the goods. When a tariff is imposed, it increases the cost of importing a product into a country.

Walmart's gross profit margin has been relatively stable over the past five years, averaging around 24-25% 1 2. In the first quarter of 2024, Walmart reported a gross profit margin of 24.81% 4.

You have to know the top information to understand the next calculations. I'm going to use small round numbers to simplify things.

Walmart imported from Mexico a item that costs one dollar before the tariffs. Applied a 25% profit margin and sold the item at $1.25.

After the tariffs Walmart paid one dollar for the item, 25 cents of tariff. Their cost is now $1.25 applied a 25% profit margin and now sells the item for $1.56

Mexico didn't pay anything. The Walmart customer pays it all.

It's simply a tax hidden as a tariff.
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