there are so many second order effects here who knows. for example (and im not saying this will always be the case) if a tariff pushes a foreign company's good out of the us marketplace and the customer is "forced" to pay 2x for something domestically manufactured that lasts 4x as long, did the american "pay for it"? how would this look in bulk economic data (spoiler it would look bad because consumption went down)
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
#62Everyone 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.
You incentivize domestic industrialization by actually doing that (but it's hard and takes planning). In fact uncertainty about tariffs make investment less likely (and more expensive, because you have to buy equipment and steel, and copper at 50% tariffs).
So no, you don't get re-industrialization, you get stagflation. It's idiocracy.
Re: US companies, consumers are paying for tariffs, not foreign firms
#63That this is surprising to a large group of Americans speaks to how uneducated a lot of them are. Not sure if it has something to do with the underfunded school system?
Re: US companies, consumers are paying for tariffs, not foreign firms
#64Try asking ChatGPT what are the intended effects of these tariffs. It's to benefit ALL Americans.
Also, obvious political bias.
Re: US companies, consumers are paying for tariffs, not foreign firms
#65there are so many second order effects here who knows. for example (and im not saying this will always be the case) if a tariff pushes a foreign company's good out of the us marketplace and the customer is "forced" to pay 2x for something domestically manufactured that lasts 4x as long, did the american "pay for it"? how would this look in bulk economic data (spoiler it would look bad because consumption went down)
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Re: US companies, consumers are paying for tariffs, not foreign firms
#66That this is surprising to a large group of Americans speaks to how uneducated a lot of them are. Not sure if it has something to do with the underfunded school system?
Red states are red states for a reason. Lowest income, lowest educational attainment, rural poverty and struggling schools.
It’s a pernicious problem exacerbated by conservative media that’s 24 hour xenophobia and jingoism. It’s not just the US look to your countrymen dear reader!
Re: US companies, consumers are paying for tariffs, not foreign firms
#67In 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…
Import taxes can affect the price of, say, yoga classes. Not direcly of course (unless maybe you're following a correspondence/video course from India where you need to buy imported tapes), but you can think of it like this:
The price of food is based on the price of domestic produce and the price of imports. If taxes are levied on food imports it will raise the mean price of food. As yoga instructors need food to do their job (in fact, they need it to live), they would have to raise their prices.
Re: US companies, consumers are paying for tariffs, not foreign firms
#68As much as Bloomberg used to be a great business resource, it seems a bit bias now and the paywall is super annoying. However I’d still consider it a legitimate source.
I can say from my supply chain experience, which I can’t really disclose, other than to say it’s substantial in my world, I directly negotiate purchases from Asia (various regions) of between $25 million to $75 million per year.
If those statements are in conflict with my various NDAs then it was a typo.
Moving on, since the tariffs have hit, the deals I’ve negotiated have had substantial pre tariff discounts. For example, a widget that used to cost me $219k before tariff now costs me $159k plus tariff.
My takeaway is yes, consumers are going to pay more as the post tariff price is higher than the pre tariff price. BUT the suppliers are taking haircuts, and they are getting more aggressive with eachother. The Chinese government doesn’t want to directly say they are going to further subsidize production costs in China due to American tariffs, but some of this is happening and may accelerate as demand further drops. Just my humble opinion.
Re: US companies, consumers are paying for tariffs, not foreign firms
#69there are so many second order effects here who knows. for example (and im not saying this will always be the case) if a tariff pushes a foreign company's good out of the us marketplace and the customer is "forced" to pay 2x for something domestically manufactured that lasts 4x as long, did the american "pay for it"? how would this look in bulk economic data (spoiler it would look bad because consumption went down)
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This isn’t remotely true, the United States is the second largest manufacturing nation by value [1]. And manufacturing is still the dominant industry in many regions of the US. We might not be great at making consumer goods, but consumer goods is only a small subset of all manufacturing.
Re: US companies, consumers are paying for tariffs, not foreign firms
#70there are so many second order effects here who knows. for example (and im not saying this will always be the case) if a tariff pushes a foreign company's good out of the us marketplace and the customer is "forced" to pay 2x for something domestically manufactured that lasts 4x as long, did the american "pay for it"? how would this look in bulk economic data (spoiler it would look bad because consumption went down)
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that's really not true. for example, i stopped buying shit underwear and bought made in the usa underwear and it's been great.