Trump on tariffs: Does he really not get it? Or is he pretending?

Mr Trump has once again  "imposed tariffs on" Mexico. He talks as if the Mexicans will pay these tariffs. Well, whoever pays, the prices for Mexican goods will rise, and American consumers of those goods will pay more. Mexico not only makes consumer goods but also components for products made or assembled in the USA.

A tariff is an import tax, levied to bring the prices of imports up near (or even above) the prices of domestic products. Their net effect is to raise domestic prices.  They are sometimes coupled with export subsidies, so that prices of domestic products in foreign markets will be lower. The justification has always been to protect domestic industries so that they can thrive on the domestic market. The effect has always been that domestic prices are higher.

I wonder: does Mr Trump not understand this? I've seen Facebook posts that show the poster believes that tariffs will be paid by the foreign manufacturers, and that the money will flow to the USA. So is Mr Trump playing to this misconception? Or does he make the same mistake?

Update 20190907: Trump has now imposed tariffs on Chinese goods. Steve Paikin (host of TVO's The Agenda) chatted with a Michigan boater this summer while on vacation. This man knew the tariffs would hurt his business, but believed that "We have to stick it to the China." I think this attitude shows a general misunderstanding of both tariffs and international trade. Econ 101 again: International trade is about goods, not money. Money is merely a method of tracking the relative values of the trade goods, which encourages both fair trade and efficient resource allocation.

Cheaper foreign goods prompt domestic producers to use domestic resources more efficiently, and/or to reallocate resources to unmet needs and wants. In the short term, there will drops in production, hence drops in profits and employment. However, as long as people believe that the business exists to make money and provide jobs, attempts to alleviate the pain will be misplaced. Instead of supporting shifts in domestic production, there will be attempts to prop up failing industries. When the other country imposes countervailing tariffs, healthy industries will be hurt as their foreign markets shrink. Either way, domestic resources will be wasted.

We see both these effects in Trump's trade war. The steel and coal industries have not recovered as Trump's base expected. Steel has used the tariff protections to shift into even more specialised product, and employment has not (and will not) reach pre-Rustbelt levels. Coal continues to be replaced directly by gas and indirectly by solar and wind  power. The soy and pork farmers receive billions of dollars to replace their lost sales. And domestic vendors have not repatriated production as expected, but are shifting it to countries that Trump has (so far) ignored.