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.
...
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 ...
>> Prices will be higher until domestic suppliers come on line <<
If domestic producers could make and sell products at prices just as low as the foreign competitors, and do so at a profit, then they would already be doing so.
Otherwise, we’d have to assume that they’re not smart enough to recognize a good opportunity for a profit.
What? That makes no sense you dolt. Go to the link and read and learn something foe once you Free Traitor™ zealot.
>> They ALL have higher tariffs than the USA <<
No, that’s not correct. Some do, some don’t.
They can't. But almost.
The price will be higher, post tariff. Much higher at first them lower later on as domestic supplies kick in. The higher cost will be the difference in US labor/regs minus cheaper shipping costs. I'd estimate 5-7% higher. But quality will go up too. Yes, the one time inflation is worth it to me and a lot of other patriots.
Here's some help for you.
>> That makes no sense <<
I repeat:
When a foreign country raises tariffs, they are raising taxes on their own citizens, not on us.
If that fundamental fact doesn’t make “sense” to you, then so be it.
We are discussing USA's import tariffs. They are not paid foreigners. Stay on topic.
Canada, Singapore, Iceland, Norway, Denmark, Poland, UK, Finland, Belgium, Germany, Netherlands, France, Japan, Australia...
I could name more but you get the point.
Tariff rate, applied, simple mean, all products (%) - Country Ranking
>> list some countries with lower average tariffs than the USA <<
Singapore, Hong Kong, Iceland, Canada and Switzerland.
And higher than the USA?
Gabon, Chad, Benin, Grenada and Bahamas.
“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.”
It does matter
“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.”
OK, example.
We each own a whole appliance business in the same general area. You rent your warehouse for $30k monthly while my rich daddy left me my warehouse. Both of us employ the same number of people and use same utility company and pay the same R.E. taxes.
We both do right at 1 million per year in gross business and buy in the same quantity from the same mfr and so pay the same $ for our product.
In order to determine your net after expenses you need to take your 1 million and deduct $360,000, then salary, benefits, utilities, insurance etc all of which is the same as my expenses...and come to let’s say another $300,000. This leaves a net before tax for YOU $340,000. Taxes for you are about $70,000 leaving you about $270,000 for the year.
My business expenses however are 360,000 LESS than yours so my net before taxes is, $700,000 and after taxes is $553,000 or double yours.
So here come the tariffs and our supplier jacks up the price we pay 20%. If you want to maintain your $270k after tax profit you pass it along to the retailer and so would I, BUT I can easily absorb the increase based on my much larger bottom line and keep my prices the same which gives me a great price advantage with the retailers, allowing me to increase my volume at your expense.
With my expense advantage I could literally put you out of business if I so choose.
Every EU country, Russia, South Korea, China, Australia, Japan Taiwan ALL HAVE higher import tariffs than the USA you f-—ing idiot. Can’t you eve read a graph you stupid globalist hack?
Well you got 1 right out 13. Not bad for dumb a$$.
TARIFFS Over INCOME TAX
Wall Street Journal LOVES the Income Tax.
Workers love Tariffs and HATE Income Tax.
Send the Marines to “tax” the WSJ as an enemy of the people.
Can't be repeated enough! It is the people in general and not just the workers.
OBAMA’S TRADE WAR
In Obama’s trade war, the huge Communist China won. Now Commie China wants to censor our internet, and give us poor movies and poor quality slave products.
>> Can’t you eve read a graph you stupid globalist hack? <<
Thanks for keeping the discussion so civil!
You are a real credit to the FR community!
>> With my expense advantage I could literally put you out of business if I so choose <<
Interesting example.
So because you start out with a higher profit margin than me, the higher tariffs will allow your firm to put my firm out of business?
OK, whatever.
“So because you start out with a higher profit margin than me, the higher tariffs will allow your firm to put my firm out of business?”
“OK, whatever.”
Lol, you doubt me? What exactly do you know about running a business? I ran and owned one myself, did you?
The fact you cannot even understand my post despite my using an example aimed at a grade schooler tells me all I need to know about you.
I can clarify more if need be, perhaps bringing explanation down to a pre school level if you think it will help you. Let me know. I
Over the past decade I've witnessed textile and apparel companies run screaming back to domestic suppliers from offshore just because container shipping got sort of expensive temporarily, twice. I can guarantee you the same is happening in other industries due to tariffs. They'll bitch and moan of course, it disrupts their supply chain. But, their supply chain decisions are being made on the basis of sometimes razor thin differences in overall profitability, and as much as China has improved over the past decade it's still an absolute pain, the communications breakdowns, the timezone difference, the needlessly complex prototyping at a distance and the delayed time to market. There are advantages to domestic sourcing, and changing the cost-benefit dynamics will bring it home wherever there exists capacity to handle it. That's the problem though, domestic manufacturing has been utterly hollowed out with few survivors in some industries. That's the benefit longterm though, the impact will spread far and wide beyond manufacturing itself due to the need to build new capacity.
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