141–150 of 1001 posts
Someone figured out that the new tariffs are just our trade deficit with that country divided by the country's exports. I think more and more we see lots of evidence they don't know what they're doing.
I don’t buy the blanket statement that the consumer always pays the tariff. It depends on what alternative companies have. If a company can purchase the same clothing from Chinese, Vietnamese, or Mexican vendors, a tax on China only could make the Chinese vendors lower the price or risk losing the business. However, a blanket tax on every country, regardless of available alternatives, would leave businesses with fewe…
Tariffs are taxes.
I'm sure lots of hours will be spent researching the incidences of these across many industries.
As you note, one major factor is the presence of substitutes, but there are several others.
This won't bring home manufacturing but let's say that it will... The US doesn't have the people to do the actual manufacturing. I saw a video recently explaining how sectors like the military, construction and the automotive industry each have 100K+ positions that they are unable to fill. A return to manufacturing adds to that shortage. Apparently there's some 7 million young men of working age that are...missing in…
The best option would be to close the gap with immigration but alas...
From what I understand, de minimis exemption has also been removed. That is a huge, huge deal. It effectively means that all goods imported from China will be slapped with a 30% import tax, as soon as said goods arrive the US border / customs. Usually what happens then, is that the courier will pay that tax, and then bill the recipient later on - as well as charge some fee/fees for the work done. This is why in some…
The practical takeaway is that the average household will spend $3,500-4,000 more as a result of the tariffs. Clothes, furniture, toys will be about 30% more expensive, electronics will be about 25% more expensive, tires and jewelry about 15% more expensive, and industrial buyers are going to get hosed when they buy equipment.
There were major carve-outs for the auto industry (yay Michigan) and petrochemical industries (yay Gulf Coast); they’ll still get hosed on equipment but will mostly escape increases in cost of materials. Imported cars/trucks aren’t directly affected either.
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Meta discussion:
I can't do an analysis on the de minimis situation, I don't know of any public datasets that would allow such an analysis, and it's obvious that it will have extremely complex effects (and therefore, any first-order analysis would be very low-quality).
Note on ChatGPT-4.5 "Deep Research": I spot-checked the calculations for HS codes using my own research and the numbers seemed reasonably close to my own. https://atlas.hks.harvard.edu/explore/treemap is an invaluable resource for this kind of analysis. ChatGPT fumbled the bag on HS 30: Pharmaceutical products, by not excluding products listed in Annex II, which overestimated total tariffs by about 6% ($30 billion), but the net effect on households is still in the right ballpark (+/- 20%).
Edit: This isn't one of those simple low-effort posts that say "omg look what ChatGPT said". I'm capable of doing this analysis on my own, and I checked ChatGPT's work for the largest contributing categories of goods. Sometimes we disagreed by 10% or so, but overall the results checked out except for Pharmaceuticals, which I caught and didn't repeat misinformation in my "practical effects" tl;dr. The only way it is significantly wrong is if both myself and ChatGPT missed some large tariff category and assumed it was small - that could raise the real costs above the numbers in the analysis - but I checked all the largest categories that ChatGPT identified as well as all the largest categories from our largest trade partners shown by the Atlas of Economic Complexity, so it's somewhat unlikely that happened.
I purposefully didn't include 2nd and 3rd order effects (e.g. chained CPI) because they are usually relatively small, massively uncertain (my analysis would be worth as much as dog poop on a shoe) and those higher-order effects take too long to manifest. It's not worth predicting costs out 2+ years because the political environment is far too unstable. Just today, the U.S. Senate voted to block all the Canadian tariffs and end the "state-of-emergency" that this executive order is standing on. Front-page diplomacy or private back-room deals could make Trump adjust tariffs up or down on various nations multiple times this year. Who knows what the situation will be 6 months from now, let alone 5 years from now when global supply chains and pricing elasticity might re-normalize. The fact that ChatGPT didn't include these effects is a point in its favor, not a glaring oversight.
I'm not complaining about downvotes but if you are downvoting this, please let me know why so that I can improve. I put a lot of work into this far beyond just typing some crap into ChatGPT and I think these numbers add a lot to the discussion.
I think a lot of people assume the economic consequences like these have not been understood by the WH. Although I don't like this administration I beg to differ: they know what's going to happen, and they expect the coming storm because they seek what follows. They want to repudiate foreign held debt, or devalue it, by revaluation of the USD and they will wear what they think of as a one time economic shock to get t…
The weighted average of the new U.S. tariffs will be 29% it seems. Maybe they know the consequences, but to give you a idea... it was 1.5% before. The new ones will be equivalent to Brazilian tariffs in 1989 before opening the economy (31%, data from World Bank). Now, Brazilian tariffs, which have one if the most closed economies, by weighted average, is 7%. China, have 2.2%. The United States will be an autarchy, si…
I think a lot of people assume the economic consequences like these have not been understood by the WH. Although I don't like this administration I beg to differ: they know what's going to happen, and they expect the coming storm because they seek what follows. They want to repudiate foreign held debt, or devalue it, by revaluation of the USD and they will wear what they think of as a one time economic shock to get t…
Different countries have different tariff. Is there room for arbitration? In which a 3rd party business from a country with low tariff would buy a product in one of the countries with high tariff and export that to the US, taking a small cut.
I think a lot of people assume the economic consequences like these have not been understood by the WH. Although I don't like this administration I beg to differ: they know what's going to happen, and they expect the coming storm because they seek what follows. They want to repudiate foreign held debt, or devalue it, by revaluation of the USD and they will wear what they think of as a one time economic shock to get t…
I think a lot of people assume the economic consequences like these have not been understood by the WH. Although I don't like this administration I beg to differ: they know what's going to happen, and they expect the coming storm because they seek what follows. They want to repudiate foreign held debt, or devalue it, by revaluation of the USD and they will wear what they think of as a one time economic shock to get t…
> cheap labor factories again isn't going to happen in 2025
It is not going to happen ever unless we plan to move people from better paying jobs in McDonalds and WellsFargo to China styled factories or we allow much higher immigration levels from South America.
Trump admin and his advisors genuinely believe that tariffs are good, that they will create factories and jobs within USA and enable white families to raise families on a single income. They think rest of the world's existence is a mistake, they hate Europe, China, India and South America. They don't know much about Africa and admire Russia.
I think a lot of people assume the economic consequences like these have not been understood by the WH. Although I don't like this administration I beg to differ: they know what's going to happen, and they expect the coming storm because they seek what follows. They want to repudiate foreign held debt, or devalue it, by revaluation of the USD and they will wear what they think of as a one time economic shock to get t…