Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

In stores yes, but on the Internet, including it in the price makes it easier to bump up prices. Showing the price without tariff allows you to easily compare before / after, and then when you see tariff added to your bottom line order (e.g. on Amazon) it should drive home the point that tariffs are a tax paid for by the consumers (which unfortunately lots of people still dont believe).


I actually think that would backfire:

I see two items for $5, but when I add the imported one, suddenly it costs more — and Amazon didn’t tell me that ahead of time or give me any way to choose the one without tariffs on the grid/list view.

This makes tariffs more effective because they can’t bump the domestic price to match — while giving customers a negative chock each time they choose an importer for a product.


In your example, why would the domestic seller keep their price at $5 if the other option costs $15?

They'll just raise the price of the domestic good to $13 and we will all pay $8 extra on a thing that used to cost $5.

If the price displayed is still $5 but tariffs added at the end, the domestic seller's $13 sticker price will not look attractive to buyers.


To capture market share.

For goods that have alternatives, businesses may choose to under-price (relative to their tariffed competitors) in order to gain sales and customers.


Right, but they'll underprice just below the floor price for the imported good, because why would businesses leave money on the table?

The choice for consumers won't be "choose between a $5 item and $15 item" it will be "choose between $13 and $15", like I mentioned above.

This doesn't work as easily if the sticker price for the imported good is $5 and the real price displayed at the end of the purchasing funnel. The local business will have to keep its sticker price at $5 to avoid losing customers when they initially compare goods or rely on customers to come back to them once they get faced with the tariff tax, which will also lose customers.


You say this as if the domestic seller wouldn't also raise prices.


I certainly would! If the foreign competition is now cut off I'd raise prices just below them. To do otherwise would be stupid.

This is were tariffs can go horribly wrong: it destroys the incentive for competition between companies.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: