Tariffs
Today's entry is an excerpt from my new book, FQ: Financial Intelligence - Tariffs I should have included this in Module 7 but since it’s a late addition, I’m giving myself a pass. But I felt compelled to include it since it is all over today’s news and universally misunderstood. First, let’s look at the supply chain. Left is a simplified visual. At any point in this chain, products may traverse borders, whether they be component parts or completed goods, and thus may be subject to levies from the importing country. A tariff is the fee (duty) paid by the exporter to the country receiving their goods. Albeit some will quibble, technically, it’s a tax. What purpose does it serve other than to raise money for the taxing country? It is meant to ‘level the playing field.’ Here’s a simple example: BMW exports automobiles to the US from Germany. The cost to the US auto distributor purchasing said vehicles is $5,000 less than a comparable US-mad