Posted on 06/19/2018 5:20:46 AM PDT by reaganaut1
In recent weeks, several major rounds of tariffs have moved from proposals to realities, and major new tariffs have been threatened—shifting the stakes for President Donald Trump’s trade actions on the U.S. economy.
Tariffs raise the price of imported goods, increasing costs to consumers, and making domestic producers (who don’t face the tariff) more competitive.
Examples of how new tariffs might ripple through the economy have already been provided by earlier, smaller rounds of tariffs. These earlier examples also show why broad effects from tariffs, on the otherwise booming U.S. economy, might be hard to detect.
One of the first to go into effect under Mr. Trump came in January, with the imposition of 20% tariffs on washing machines.
While tariffs are formally paid by whomever imports the goods, the importers can pass their costs along to consumers. In the case of washing machines, that happened quickly: The index for laundry equipment in the Labor Department’s consumer-price Index, the nation’s main gauge of inflation, shot up by about 17% over the past three months.
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Mr. Trump’s steel and aluminum tariffs were announced March 1. For some countries they went into effect quickly. The European Union, Canada and Mexico were given more time to negotiate, but those extensions expired at the beginning of this month.
Prices for different types of steel and aluminum began to climb almost immediately, posting the biggest three-month price increase that has been recorded in years. While clearly inflationary and unwelcome for metal consumers, the jump in prices isn’t that much larger than typical volatility in the metals. And only a small portion of the metals ends up in consumer goods.
(Excerpt) Read more at wsj.com ...
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Saying its “like a tax increase” is total barf-bag.
Tax increases are essentially forever, while tariffs change day by day.
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A tariff is a tax increase, regardless of what you think.
Tax increases are essentially forever, while tariffs change day by day.
Really? I seem to remember that income taxes were lowered recently.
“I think he just wants to shut down trade with China, period — regardless of the domestic cost.”
That would be a silly objective, as is the conclusion.
I just heard Art Laffer opine that he doesn’t understand Navarro’s position, but that doesn’t mean his role is not coordinated with Trump.
You seem to lack business knowledge in the sense you believer one wholesaler is the same as another. I explained earlier that expenses incurred by similar businesses can be quite different. If wholesaler A pays $30k monthly in rent while wholesaler B pays $10k or perhaps owns his warehouse that very much impacts his cost of doing business and hereby his markup.
I never even mentioned the savings enjoyed by a business which buys in large volume. The per unit price is very different when units are purchased in quantity and mean 10% or more in what the eventual cost to retailer
It is certainly NOT debatable that taxes in part determine final cost to market of any product.
Nah.... that is the give and take of the negotiations.
It’s a game and the players enjoy the process that will ultimately yield some change
Why would prices go up?
You think the sellers are asking for the lowest possible profit?
Apple and samsung etc jacks up prices as do the clothing companies and show makers from their child and slave labor from overseas.
>> when in modern history have we had zero tariffs? <<
Hong Kong has been that way for many, many years, maybe ever since the British took over in the 1800’s. And Singapore is almost in the same category. The resulting prosperity cannot be denied. The data are as plain as can be.
Anyway, it’s not a question of “zero” tariffs but rather higher or lower average tariffs. And every piece of credible statistical research that I’ve ever seen has shown that lower tariffs lead to greater economic properity.
(Moreover, the latter “pragmatic” point is entirely separate from the matter of fundamental liberty that is involved. In my opinion, neither you nor the government or anybody else should have the right to tell me from whom I may and may not choose to purchase run-of-the mill products.)
>> I just heard Art Laffer opine that he doesn’t understand Navarro’s position <<
I think Art must be making an intentionally ironic understatement. He’s an excellent economist who completely understands the futility of the kind of 18th Century Mercantilism espoused by Peter Navarro.
That's not the debatable part. Taxes form a part of the cost to the consumer. Tariffs are a tax, therefore they will be passed along to the consumer as well. What's debatable is the idea that since tax costs are lower then businesses will meekly accept rises in costs in other areas. If they pass one along then they'll pass the other.
>> If manufacturers pass the cost of income tax on to the consumer then there is no reason to believe that they won’t do the same with other taxes like tariffs <<
Oh, c’mon. Don’t be so logical. It’s not appreciated by our mercantilist friends around here.
>> if the only thing making your business profitable is the artificially high prices that a tariff allows then why would you invest billions in building plants that could be rendered unprofitable by the stroke of a presidential pen or an act of Congress? <<
Excellent point! Wish I had thought about it!
Oh miss spell a word that proves you won. /sarc
>> I explained earlier that expenses incurred by similar businesses can be quite different <<
Doesn’t necessarily matter. Prices in a marketplace are determined not only by costs, but also by the demand curve and by the amount of competition.
Therefore, two suppliers in the same marketplace will have to set prices about equal to one another, even if the costs of one supplier are greatly different from the costs of the other supplier. It’s the most basic working of supply and demand.
That’s good. Apply a static model to a dynamic economic situation. Moronic.
Prices will be higher until domestic suppliers come on line. The situation is dynamic and not static like free traders would have us believe. Lies, bully scare tactics and deception are the hallmark of the free trader.
>> why America has some moral obligation to tolerate foreign countries imposing higher tariffs upon us <<
It’s not “us” that pay the costs of foreign tafiffs. Those countries are taxing their own citizens.
Ask the rest of the world. They ALL have higher tariffs than the USA, you idiot.
If we shut down all trade with the Gooks we’d lose $150 they lose $350B. Our economy is 18T/year. $150B is .08%. LOL!
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