ELI5: Why are so many things so much cheaper in America than anywhere else? (Clothing, Cars, Electronics, ...)

I've never tried before, but today, I shall. So basically, there are geo-socio-economic hands at play here. On one hand the US dollar is the most versatile currency in the world(Based on Oil), and rightfully so. Also, the US economy commands and influences the global economy through agreements or force. (See Russia) So, If a foreign company wants to start selling things in the US, then they have to pay import fees, the currency has to be converted, and it has to be competitive with comparable alternatives.(luxury cars vs luxury cars etc) Once all that is done we end up with a general number, a ballpark price for what their product could be sold for. That's not the selling price, but it's a start. So we take this ballpark price and start evaluating whether or not it actually would sell, because nothing sucks more than liquidating assets for product, then being stuck with an unsaleable product. So maybe they drop the price, or maybe they recognize that the cost of shipping and logistics makes it so that it would cost more then they would profit. Now, excluding the BMW pricing in your post, those 2 companies are American, and are treated more favorably than foreign imports as far as taxes and Uncle Sam's slice of the American Dream. But to tell you the truth, its not so much that things are cheaper here than other places, rather, other places economies and currencies are weaker, so not only do international companies have less negotiating power, foreign governments have rather excessive taxation on luxury goods. For example, when I was in Shanghai this past Christmas, I was informed of the price of a car. Not of a specific car, but of taxes, certification, administrative fees, luxury tax, etc, which made it so that a new (2000's) car literally costs more than double the price of the American counterpart. It is so much more expensive, that Ex-pat friends of mine will buy a car stateside, pay 2-3 thousand to ship it, and then still pay all the fees associated with "the privilege" of driving. and still save 20-40% of the total price.

Sorry if i got off topic, or if i didnt paint the picture well enough. But I did want to comment on "Arguments that I heard in the past which I think are wrong: US is a bigger market: No, the EU has both more people and in combination has a higher GDP US is a bigger country, therefore its different (Australia is even bigger, see BMW example) People want to pay a lower price in the US: So do people elsewhere, I want to pay the smallest amount of money for everything as well."

First, the US IS a bigger market. We have more disposable income than any other nation in the world. GDP is irrelevant when talking about actually selling and exchanging currency for products.

The US is a bigger country in regards to coast-to-coast population density. Finally yes, everybody wants to pay a lower price, HOWEVER, the US has the buying power to force unfavorable outcomes. Its like this, US and EU.

US: wanna sell your product over here, sure thing, knock off 70% of asking price and go for it.

Merchant: But then I'll lose money

US: ok, then don't make ANY money over here. (Did I mention we spend more than everyone else?)

Now the merchant is screwed because half of barely anything, is technically more than nothing. But is unsustainable. HOWEVER, they built a quality product, so quality that they outpriced their domestic client base, and now have to sell extremely expensive BMW's in Germany(to offset perceived losses), and relatively inexpensive BMW's in the US, Or else they won't get any American money. Global economic relations rely on changing perspectives and adaption.

TL;DR: American products are cheaper in America because of favorable tax codes that benefit domestic companies. Foreign products are cheaper in America because the nature of American business is to fuck you over at any given opportunity, which includes taxing, out pricing, refusing to do business with, and general bully tactics. This forces international business' to play bullshit politics with one of the best bullshitting governments to date. This creates a global setting where the value of X could be ABC in America, however back at home they have to charge ABCDEFG, to offset losses internationally. Capitalism.

/r/explainlikeimfive Thread