Spain should remember: Tariffs start at home
While Spain criticises Trump’s tariffs, tourists are paying extra to visit the Balearic Islands. Is this fair?
Before Spain starts moaning about the infamous Trump tariffs perhaps it should look closer to home because tourists are paying an additional tax to come to the Balearics and other places in Spain which could be described as a holiday tariff. It has been sold the same way as President Donald Trump announced his tariffs, to save the USA or in this case to save the Spanish environment and ease the footprint left by tourists.
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Spain isn’t paying the tariff on its goods to the USA, ( but will eventually pay for it another way) the importer pays and will pass some, or all of it on to the consumer. The consumer pays or doesn’t purchase. If the latter happens, as is very likely, then the importer imports less. Spain therefore exports less. If no new markets can be opened then inevitably sales fall, production reduces; profit becomes loss, jobs go, economy stalls. Spain pays the price of there being a tariff. Meanwhile, Trump plays golf as he and the rich ride out the slump and pick up bargain price businesses through their lower priced stocks and share acquisitions (unless the business goes totally bust). ultimately they will become even richer and more powerful whilst almost everyone else is reduced to eating sawdust and gristle. The American Dream? As Fraser says, “We’re doomed, all doomed!”
MyselfOne needs the be extremely cautious in believing any of trump's rhetoric. Most of it is fabricated. Trump says that 20% is "reciprocal", and estimates that tarriffs on American goods is something like 34% (so he's being generous) but most nonpartisan economists are baffled at that figure, since they find the average EU import duty on American products is around 3%. And no, Spain doesn't pay the tariff. The importers do, and consequently, the American consumer pays it in higher prices. That means that a bottle of Campo Viejo (already heavily taxed and selling for roughly $15 per bottle in the US) will now be about $19-$24 per bottle on US supermarket shelves. Yes, $24 is more than 20% hike, but there will be some profiteering on the part of the importers in the process.
Comparing Mallorca's tourist tax to Trump's idiotic tariffs? Seriously?
“Spain may complain about the 20 percent surcharge it will have to pay on its exports to the United States” Another one, like Trump himself, who doesn’t appear to know how tariffs work. The US importers are the ones who will have to pay the 20%, not Spain! That this will affect Spain’s exports for sure as demand will fall but Spain doesn’t pay the tariff.