A single Orange coming in from Mexico isn't the $1 we pay at the store (forgive me, I'm in CA). Most of the price is the markup generated within the country by greed and the fact that the food distribution network over the past 20 years was allowed to be gobbled up by just a few companies that have, clearly, decided to illegally set up price fixing agreements (through intermediaries) (think real page for produce).
While true, if that same orange now incurs a $0.50 tariff tax at the border (it will likely not be that high, just a "value" picked from thin air), then in order for all those greedy food distribution networks to maintain their same profit margin as before the tariff, your orange at the store now must cost $1.50.
And, assuming the food distribution network are "greedy", then they will not want to reduce their own profit in order to absorb the tariff costs, so they will most likely just pass the costs of the tariff directly onto you at the store.
The tariff at the border will be around a half penny for a single orange (if that). The actual price markup that gets it close to a dollar is in the distribution companies and the grocery chain itself.
Ignoring the fact that food distribution is actually highly competitive, dispersed, and low margin - getting a fresh orange year round in most corners of the country for even $1 is nothing short of a logistics and trade miracle.
The prosperity we enjoy is being taken for granted by the people who seek to destroy it.
Comments
A single Orange coming in from Mexico isn't the $1 we pay at the store (forgive me, I'm in CA). Most of the price is the markup generated within the country by greed and the fact that the food distribution network over the past 20 years was allowed to be gobbled up by just a few companies that have, clearly, decided to illegally set up price fixing agreements (through intermediaries) (think real page for produce).
While true, if that same orange now incurs a $0.50 tariff tax at the border (it will likely not be that high, just a "value" picked from thin air), then in order for all those greedy food distribution networks to maintain their same profit margin as before the tariff, your orange at the store now must cost $1.50.
And, assuming the food distribution network are "greedy", then they will not want to reduce their own profit in order to absorb the tariff costs, so they will most likely just pass the costs of the tariff directly onto you at the store.
The tariff at the border will be around a half penny for a single orange (if that). The actual price markup that gets it close to a dollar is in the distribution companies and the grocery chain itself.
Ignoring the fact that food distribution is actually highly competitive, dispersed, and low margin - getting a fresh orange year round in most corners of the country for even $1 is nothing short of a logistics and trade miracle.
The prosperity we enjoy is being taken for granted by the people who seek to destroy it.