Posted on 04/22/2019 5:43:15 AM PDT by reaganaut1
President Trump’s decision to impose tariffs on imported washing machines has had an odd effect: It raised prices on washing machines, as expected, but also drove up the cost of clothes dryers, which rose by $92 last year.
What appears to have happened, according to new research from economists at the University of Chicago and the Federal Reserve, is a case study in how a measure meant to help domestic factory workers can rebound on American consumers, creating unexpected costs and leaving shoppers with a sky-high bill for every factory job created.
Research to be released on Monday by the economists Aaron Flaaen, of the Fed, and Ali Hortacsu and Felix Tintelnot, of Chicago, estimates that consumers bore between 125 percent and 225 percent of the costs of the washing machine tariffs. The authors calculate that the tariffs brought in $82 million to the United States Treasury, while raising consumer prices by $1.5 billion.
And while the tariffs did encourage foreign companies to shift more of their manufacturing to the United States and created about 1,800 new jobs, the researchers conclude that those came at a steep cost: about $817,000 per job.
Mr. Trump imposed the tariffs last year in response to a complaint by the Michigan-based manufacturer Whirlpool, which claimed foreign competitors were cornering the American washing machine market with cheaper models that threatened domestic manufacturers. The tariffs started at 20 percent per imported washer and rose to 50 percent late in the year, after total imports exceeded a quota set by the administration.
Mr. Trump, a self-proclaimed lover of tariffs, hailed the move as a way to help American production and jobs.
(Excerpt) Read more at nytimes.com ...
When the WSJ and the NYT agree about something you know it s wedge issue.
Winning! MAGA.
I think that for overall consumer costs to double the collected tariffs, American manufacturers raised their prices to in effect protect those manufacturers actually tariffed.
Or, the article is completely fake news
What an idiotic thing to say. The founders were ALL protectionists because they thought about the next century and not the next quarter. They we patriots too, unlike some around here. So I suggest you vote for Buttplug then, I am sure has bought off on this crazy destructive trade suicide one sided trade war.
You should feel dirty and stupid. The NYT, the defender of the common man, is coming out against import tariffs!!! Talk about an obvious attempt at a wedge issue. Did you know at one time the Republican Party was THE TARIFF party?
Superb point. More classic static analysis from people who have a vested stake in only one side of the argument.
They should allow the duty-free importation of washing-machines that actually work! The kind we had before the ‘Erf day’ queers started writing regulations.
Don't make me call you a coward again....
Personally I only by older reconditioned models. At least until the Bush era environmental specs which prevent them from actually getting your clothes clean are repealed.
So Samsung moved a plant here... Choices.
“Two weeks before the tariff announcement, Samsung had moved its production of washing machines to a new plant in South Carolina. In response Samsung said U.S. consumers will “pay more, with fewer choices.””
Although it would have been far better to have a U.S. Manufacturer pick up the slack.
Trouble is most of those have already been driven out of business.
So to repeat, prices are higher at first then become 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 look to quality to go up too. Yes, the one time inflation is worth it to me and a lot of other patriots.
That is the point. All dyers when up $92 so the domestic makers are reaping huge profits and adding shifts while the importers are taking in the shorts!!! I love it! Soon domestic supply will meet demand and the price will come down. . It is how a free market works.
So if prices have been suppressed because of dumping...
Then this is a natural result:
” prices for washing machines increased more rapidly than any three-month period in the 40 years data has been collected and those prices increased more than twice as fast as any of 300 other categories in the last two of those three months.”
Imports are down:
“Four of those five months, imports were down more than 30%.”
Excellent. So the tariffs are working.
What a dweeb of an author for this article... “(Yes, you can read those two sentences again.)”
But then, the article is just a ‘hate Trump’ article !
Liberals really and truly have zero sense of humor left. The (Laughter) cue is even in his catty response, and he still doesn’t understand.
Did the article show a steep decline in the sale of washing machines? If not, it’s just another hit piece by the Democrat media on the President. No one should believe the NYT at this point.
Harumph. I can’t find a single positive article on the tariffs !
I also bought American and didn’t note the difference. However, the NYTimes claims that I must have been left “with a sky-high bill for every factory job created.”
Of course companies love tariffs. They always have because it allows them to inflate their prices to match the tariff. Tariffs are, and always have been, a tax on consumers.
Lets see, so if the Tariffs are dropped, how quickly do these jobs go away?:
“NASHVILLE, Tenn., Feb. 28, 2017 – LG Electronics Inc. today announced plans to construct a new 829,000-square-foot home appliance manufacturing facility near Clarksville, Tennessee. The project, in the heart of Montgomery County, is expected to bring at least 600 full-time jobs to the area.
LG’s new Tennessee facility is expected to be the world’s most advanced production plant for washing machines. Starting in 2019, the factory will initially produce front- and top-load washing machines. Longer term, the 310-acre site offers the potential to expand for production of other home appliances.
“LG is proud to make further investments in America, to create jobs and to bring state-of-the-art home appliance production technology to the great state of Tennessee,” said Dan Song, president of the LG Home Appliance and Air Solutions Company. “Over the past six years, LG studied eight states for the location of this facility. Tennessee is the clear choice for LG’s latest major investment in America, due to the state’s excellent business climate, quality workforce and central location for distribution to our U.S. customers.”
Governor Bill Haslam said, “We are proud to welcome LG to Tennessee and thank the company for creating 600 valuable new jobs in Clarksville. LG’s decision to establish new manufacturing operations in Tennessee is a testament to the business-friendly environment, ideal location and highly-skilled workforce we offer to companies around the globe. I look forward to building a lasting partnership with LG in the years ahead as we work together to make Tennessee the No. 1 location in the Southeast for high quality jobs.”
Kim McMillan, Mayor of Clarksville, said, “LG’s level of investment and new jobs shows that Clarksville is living up to our commitment to be a great place to live, work and raise a family. Clarksville continues to prove itself as a great home for manufacturers that need a large and skilled workforce, shovel-ready industrial sites and outstanding infrastructure.””
The opportunity to repeal these environmental regulations was when Scott Pruitt was running the EPA. Instead, President Trump forced his resignation.
They were also big fans of sailing ships to trade goods.
Both were appropriate for the era but not for today’s economy.
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