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

bloomberg.com

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

#51

Post by supertrope »

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.

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

#52

Post by bediger4000 »

dragontamer wrote: post #22
drewcoo wrote: post #12

Tariffs are supposed to change consumer behavior. What's next? Is Bloomberg going to be telling us that fluoridation is preventing tooth demineralization and not actually helping the Communists?

The President and his followers think that Tariffs are something foreigners pay. And they still think that.

I feel like we can't impugn any kind of belief about what Trump thinks about tariffs.

It appears to me that Trump sometimes uses the threat of tariffs to get him myself some emoluments. After that, many of his tariffs seem nonsensical

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

#53

Post by tuatoru »

In my trade economics textbook years ago it was stated that the cleared customs cost of an imported good is no more than 30% of its final consumer price, and more typically 10%. The rest is inland logistics, retail costs, and marketing.

Further to that, 80% of the economy is services or otherwise has nothing to do with imports. Tariffs are not affecting haircuts or yoga classes or bank fees.

Seems to me like tariffs are being used as a convenient excuse.

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

#54

Post by avidiax »

tuatoru wrote: post #53

In my trade economics textbook years ago it was stated that the cleared customs cost of an imported good is no more than 30% of its final consumer price, and more typically 10%. The rest is inland logistics, retail costs, and marketing. Further to that, 80% of the economy is services or otherwise has nothing to do with imports. Tariffs are not affecting haircuts or yoga classes or bank fees. Seems to me like tariffs…

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.

You might argue that the retail channel can eat the difference, but it doesn't make sense to make the same absolute margin on goods that are subject to volatile tariff policies. It makes it hard to predict how many units will sell, how much stock to maintain, and creates a big risk that any units on shelves will suddenly be devalued when these tariffs are rescinded.

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

#55

Post by abnercoimbre »

jauntywundrkind wrote: post #49
linotype wrote: post #37

Earlier quoted context omitted.

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%).

Which matches the rest of the seeming plutocratic moves afoot in the past 6 months. Taking huge chunks out of American opportunism (defunding science, health care, education, space, and so much else), blowing a huge chunk out of social welfare programs: that's going to cause amazing downgrades for most people. Paths to success closed, cost of getting by vastly higher. (All while walking over all over habeus corpus, w…

You're effectively saying humanity replaced monarchies with a global (often faceless) ruling class.

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

#56

Post by quantified »

abnercoimbre wrote: post #55
jauntywundrkind wrote: post #49

Earlier quoted context omitted.

Which matches the rest of the seeming plutocratic moves afoot in the past 6 months. Taking huge chunks out of American opportunism (defunding science, health care, education, space, and so much else), blowing a huge chunk out of social welfare programs: that's going to cause amazing downgrades for most people. Paths to success closed, cost of getting by vastly higher. (All while walking over all over habeus corpus, w…

You're effectively saying humanity replaced monarchies with a global (often faceless) ruling class.

Yup, that's it. The analysis fits. Brexit helped push the UK on the same path.

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

#58

Post by RhysU »

tuatoru wrote: post #53

In my trade economics textbook years ago it was stated that the cleared customs cost of an imported good is no more than 30% of its final consumer price, and more typically 10%. The rest is inland logistics, retail costs, and marketing. Further to that, 80% of the economy is services or otherwise has nothing to do with imports. Tariffs are not affecting haircuts or yoga classes or bank fees. Seems to me like tariffs…

What was the textbook and would you recommend it? This is an area where I would like to read something substantial and good.

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

#59

Post by legitster »

AnimalMuppet wrote: post #27
legitster wrote: post #13

A reminder, most tariffs will not be paid because consumers will just shift their spending habits to match or just buy less. Tariffs are a double edged sword because the hurt purchasing power of consumers without really generating much money for the government. The administration is going to focus on the fact that tariffs don't really drive inflation, but are going to miss the forest for the trees: prices won't go up…

I don't think that's quite right. Here's a thing with a punitive tariff on it. People won't buy it because the price went up too much . It is because prices went up that nobody buys it. (And we all become poorer because we can afford less, whether or not the price increase shows up in the inflation statistics.) Tariffs have their own Laffer Curve just like income taxes do. Sure, you can set them so that the governmen…

I think that's correct to say it's not an on-off switch, but I am just saying that inflation should not be an expected outcome of tariffs.
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