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US companies, consumers are paying for tariffs, not foreign firms

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Re: US companies, consumers are paying for tariffs, not foreign firms

#171

Post by ben_w »

fsckboy wrote: post #108
yongjik wrote: post #104

Earlier quoted context omitted.

If you believe that any agreements with Trump provide certainty, I have a bridge to sell. The rest of the world now knows that any promise made by the US government is not worth the paper it's signed on, and is planning accordingly.

the rest of the world is complaining bitterly. they would not be doing that if their solution was as simple and painless as you like to think

They said "planning accordingly", not "will have an easy painless time"?

When my flight home from Stansted to Berlin was cancelled, and the replacement, and the airline's next free seat wasn't for another week, I definitely both planned accordingly *and* complained hard.

Re: US companies, consumers are paying for tariffs, not foreign firms

#172

Post by kdmoyers »

CGMthrowaway wrote: post #87
xnx wrote: post #28

Crazy that one of the major policy initiatives of the all Republican/Maga government is to impose a huge consumer tax increase. Maybe calling these "import taxes" instead of "tarrifs" would help emphasize that to the average voter?

[flagged]

Dude, I write the checks, I assure you: the importer pays, no one else. I import the stuff, I pay at the port, I get my stuff. Now I take my wildly expensive stuff back to my building and try to stay in business. Whatever macro economic stories might be playing out, it starts with an American business paying a fat tax to get his materials.

Re: US companies, consumers are paying for tariffs, not foreign firms

#173

Post by ndsipa_pomu »

david-gpu wrote: post #160
ndsipa_pomu wrote: post #157

Earlier quoted context omitted.

That's assuming that the voting machines accurately counted the votes and weren't tampered with

Tom Scott provided an excellent explanation of why electronic voting is a terrible idea. Original: https://m.youtube.com/watch?v=w3_0x6oaDmI Follow-up: https://m.youtube.com/watch?v=LkH2r-sNjQs

Haven't watched them (yet), but I don't think it's because of the electronic side of things, but more the closed source, black-box nature of the specific devices. It would be possible to design a reasonably secure, open source voting system that would allow voters to validate their votes.

Re: US companies, consumers are paying for tariffs, not foreign firms

#174

Post by ThunderSizzle »

supertrope wrote: post #51
swordsmith wrote: post #47

Everyone focusing on consumer prices. But tariffs also function to incentivize domestic reindustrialization, which has huge national security implications. You see this clearly in the venture space as increased investment interest in hardtech and manufacturing. It's great that the federal government is looking long term again.

An N95 mask made in China costs $0.30. One made in the USA costs $1.00. A 25% tariff was enacted by executive fiat. The made in China mask is still cheaper than the USA made one. Few hospitals buy American. PPE manufacturers in Malaysia win.

It's clear that a 25% tariff isn't enough in this example.

It's very basic though. Americans have to follow laws, including regulations from EPA, OSHA, building codes, routine inspections (e.g. health inspections), and taxes and permits.

External companies don't face as many of these hurdles. Mexico doesn't have to report to the EPA or OSHA, so if implementing better work environments or cleaner air is important, tariffs act as a tax to instead manufacture in America and, in effect, follow those regulations.

Re: US companies, consumers are paying for tariffs, not foreign firms

#175

Post by supplied_demand »

CGMthrowaway wrote: post #114
supplied_demand wrote: post #110

Earlier quoted context omitted.

== hints at pressure on corporate margins.== And if those hints become reality, might prices rise to re-increase margins? Do you make the same argument about the corporate income tax being absorbed by companies? Or do you assume that tax makes its way to consumers through price increases? What about increases in the minimum wage?

They are reality (OP says GM took a $1B hit), and no, they aren't

It’s odd how you claim this will impact foreign companies, but your only example is a US-based company.

The question was, do you believe companies will just accept lower margins or if they will eventually increase prices to re-coup those margins?

If you think they will just absorb it, would you apply the same logic to minimum wage or corporate tax increases?

Re: US companies, consumers are paying for tariffs, not foreign firms

#176

Post by buuuuutee »

linotype wrote: post #37
xnx wrote: post #28

Crazy that one of the major policy initiatives of the all Republican/Maga government is to impose a huge consumer tax increase. Maybe calling these "import taxes" instead of "tarrifs" would help emphasize that to the average voter?

That’s the point. It’s not crazy. Tariffs are regressive taxes. Rich people buy more stuff, sure, but as a percentage of their income they net out as beneficiaries of shifting taxes from income to spending. It’s totally rational if you want to increase taxes on the bottom 80% to subsidize the top 20% (and especially top 5%).

[dead]

Re: US companies, consumers are paying for tariffs, not foreign firms

#177

Post by supertrope »

ThunderSizzle wrote: post #174
supertrope wrote: post #51

Earlier quoted context omitted.

An N95 mask made in China costs $0.30. One made in the USA costs $1.00. A 25% tariff was enacted by executive fiat. The made in China mask is still cheaper than the USA made one. Few hospitals buy American. PPE manufacturers in Malaysia win.

It's clear that a 25% tariff isn't enough in this example. It's very basic though. Americans have to follow laws, including regulations from EPA, OSHA, building codes, routine inspections (e.g. health inspections), and taxes and permits. External companies don't face as many of these hurdles. Mexico doesn't have to report to the EPA or OSHA, so if implementing better work environments or cleaner air is important, tar…

Yes off-shore manufacturers have lower labor and environmental standards. Wealthy countries indirectly benefit from exploitation.

You'd have to somehow convince or force hospitals to pay more for disposable medical supplies. They're not going to pick the USA made mask when they can get a Malaysian one. Domestic manufacturers are only going to build new plants and hire with a long term policy shift.

Americans would be pissed once everything triples in price.

Re: US companies, consumers are paying for tariffs, not foreign firms

#178

Post by nobody9999 »

fragmede wrote: post #137
sremani wrote: post #97

Earlier quoted context omitted.

Birds did not read Ornithology to fly. Accumulation of knowledge is useful but real world experience and hard earned wisdom is more important. That is what you test-taking, credential hustlers do not understand.

Birds didn't read Ornithology in order to fly, sure. But you can be damn sure the engineers at Boeing cracked a textbook on the way to making the 747. Real-world experience teaches you how you survived. Education teaches you how others failed. You need both to avoid old mistakes and make new ones. It’s not about credential hustling, it’s about having more tools in the toolbox.

>It’s not about credential hustling, it’s about having more tools in the toolbox.

Yes. However, there's a strain of anti-intellectualism in the US that denigrates knowledge and learning, as Isaac Asimov observed:

"Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means 'my ignorance is just as good as your knowledge'"[0]

This is discussed in greater detail in Tom Nichols 2017 book The Death of Expertise[1].

This is exacerbated of course, by the Dunning-Kruger effect[2]. I mean, heck, why should I go to a cardiologist for my heart condition? I'm a plumber and watched youtube videos about the cardiovascular system. Which is exactly the same as indoor plumbing, so I'm doing my triple bypass surgery myself. Fuck you, medical establishment. With your "school" and "residency" and other gatekeeping. It's all a scam! Anyone (and especially me!) can do all of this stuff without some "doctor"![3]

[0] https://www.goodreads.com/quotes/84250-anti-intellectualism-...

[1] https://en.wikipedia.org/wiki/The_Death_of_Expertise

[2] https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

[3] Yes, that's hyperbole. But as we've seen in this discussion, similar ideas abound in other areas. And more's the pity.

Re: US companies, consumers are paying for tariffs, not foreign firms

#179

Post by iaaan »

JumpCrisscross wrote: post #164
klooney wrote: post #116

Earlier quoted context omitted.

They change week to week, but they're consistently an order of magnitude above where they were.

> They change week to week, but they're consistently an order of magnitude above where they were They've about doubled [1], from $55bn to $110bn. [1] https://www.politico.com/interactives/2025/trump-tariff-inco...

Ah, so a base-2 order of magnitude /s

Re: US companies, consumers are paying for tariffs, not foreign firms

#180

Post by owenversteeg »

avidiax wrote: post #149
owenversteeg wrote: post #141

Earlier quoted context omitted.

>Right, but if you double the cleared customs cost with a 100% tariff, many of those additional costs are levied as a constant margin, which tends toward doubling the retail price. I’m sure you can find short term examples of this, but in the long run consumer products tend towards a pretty “fair” price given the cost of retail, marketing, shipping, returns etc - all of which are things that do not anywhere near doub…

Just because some retailer makes 3-5% profit overall, doesn't mean that the gross margin on each product is 3-5%. It very much isn't. I've heard doubling the import cost is typical. This allows enough margin for holding stock, the warehouses, floor space, lighting, staffing, transportation, insurance, promotion, clearance, etc., which eat up most of this gross margin. The fair price accounts for all of these costs, w…

I’m not sure exactly what argument you’re making here, but if you want the sticker price to double when the tariffs equal the import price then you need one of three things: 1) imports directly to consumer, 2) every cost must be in direct proportion to the imported cost, 3) someone must end up with astronomical margins.

1) makes up a tiny fraction of trade. Case 2 is obviously unrealistic. I will lay out a simple example for case 3: WidgetCo sells a widget in partnership with MarkCo for marketing, InsCo for insurance and JungleCo for warehousing and shipping.

Widget costs $10 in China and shipping to the US warehouse is $2. Marketing is $8: 3/4 fixed costs and 1/4 commission based. Shipping from US warehouse to the customer is $6, warehousing costs are $2, and insurance is $1. All the company’s other internal expenses are 15% of imported widget cost plus $1.50/widget totaling $3 per widget. That totals $32/widget and they sell for $33, a 3.0% net margin or $1 net profit per widget.

Now, let’s imagine that tariffs have just increased from 0% to 100%. Shipping and warehousing are fixed costs. Being generous to your point, let’s say marketing commissions and insurance are calculated on the imported price (which is unusual.) That brings the new cost to $46.5, with a retail price of $47.95. That’s a 45% increase, nowhere near doubling. If you want the price to double, you will end up with astronomical margins. InsCo’s margins remain the same, but WidgetCo now takes $8 per widget, of which $2.05 is additional pure profit. Net margin is now 7.3%: (1.45+2.05 or $3.50 per widget.) 2.35x the net margin in a competitive industry? You’re toast, buddy. But it’s far worse for MarkCo and JungleCo. Both MarkCo and JungleCo are now raking in $16 for work they used to do for $8. If their net margin was 10% before, now it is 55%.

Now, it’s worth pointing out that the numbers in this example are quite generous to your point. In reality, most products are not sold for three times their Chinese factory cost, and many products have (legitimate or not) processing steps in other countries, or steps which could be easily relocated to other countries, which is of course what happened with the first Trump tariffs.

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