Tariffs Haven’t Boosted Consumer Prices

   #3  

gobrian77

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It needed a new thread- my kid deleted my tariff thread fucking around with my iPad (my fault- I left the thread open, and I had essentially taught her how to do it by letting her delete a couple earlier double-posts with the usual 'Push this one- OK, now push this one...':lol:), but I had posted a study that showed how Americans paid nearly $1.5bil due to tariffs on washing machines alone (which Breitbart glosses over). It also doesn't mention how the average new house cost increased due to tariffs on construction materials. Previous tariffs could be absorbed or hidden at 10%, but not at 25%. When wholesale prices go up, what happens to retail prices? The article also doesn't mention that huge stockpiles of goods were purchased prior to the implementation of tariffs (there is basically no warehouse space left on the west coast)- that stock is going to be depleted and will be replaced with more expensive goods.

Effects of the 2018 Tariffs on Washing Machines - Econlib

https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_201961-1.pdf

How New Trade Tariffs Can Affect Your House Construction Cost | Remodel Works

This is the funniest part of the Breitbart article- they mention how toys and sporting goods weren't tariffed previously and their prices went down in 2018, so if they go up now due to new tariffs, it won't be a big deal (ignoring the fact that the tariffs would have boosted prices beyond what they should be, and the reasons for and levels of the pre-tariff prices are irrelevant:lol:). 'Paying less than a year ago' even if the price is increased because of tariffs is still paying more than you should be:

Toys, another big China import category, saw prices fall by a staggering 9.8 percent. Note that most toys imported from China have not yet been subject to tariffs but the decline so far means that even if they are included in later tariff rounds, consumers will still likely be paying less than they were a year ago.

Prices of sports equipment are down 2.7 percent. Most apparel was excluded from the first two tariffs rounds. Prices here are down 2.2 percent compared with a year ago, again implying there is room for tariffs without squeezing consumer wallets.
 
   #4  

tinhead

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Tariffs are the government's way of setting minimum prices for the products their "free market :timeout:" billionaire backers peddle.
 
   #5  

luckystrike

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Tariffs are the government's way of setting minimum prices for the products their "free market :timeout:" billionaire backers peddle.
You come up with that little chestnut all on your own?

Seems to me you've been mostly absent from the tariff threads

You should keep it that way
 
   #6  

gobrian77

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The average impact of the tariffs over the next year (as currently set- they'd drop if there's a deal) is estimated at $500-$800 per household- while that won't break anyone, that's ~$62bil at the low end of the estimate.

Trump's new tariffs will cost Americans about $500 per household, by one estimate

The ongoing trade war with China could cost the average American family hundreds of dollars.

It all depends on how extreme the White House gets with protectionist policies. But Oxford Economics laid out various scenarios that, at the high end, could cost U.S. households as much as $800.

On the lower end, if the 25% tariffs that went into effect Friday are permanent and China retaliates, the U.S. economy could lose $62 billion in economic output by next year, according to Oxford Economics. That total translates to an equivalent loss of $490 per American household.

If the tariffs hit all Chinese imports, the scenario gets worse:

In a more extreme example, the firm considered the administration imposing 25% tariffs on all imports from China — not just the current $200 billion. Should China retaliate, Oxford Economics estimates that the U.S. economy would be about $100 billion smaller by 2020. That would translate to an $800 cost per household.
 
   #7  

luckystrike

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The #'s quoted seem much less than I would've thought

I wonder what the cost of Chinese IP looting and cyber-espionage is?
 
   #9  

gobrian77

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The #'s quoted seem much less than I would've thought
It's averaged out over ~125mil households- that $62bil (at least) could easily lead to 100K+ job losses.

I'm for Trump kicking China's ass, but I don't want it to be a Pyrrhic victory.
 
   #10  

gobrian77

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Sure they haven't. Have you priced a 2x4 or a sheet of plywood lately?
Yup- loads of articles regarding construction materials going up in price due to tariffs- they're likely not included in the 'consumer goods' category, though.
 
   #11  

Ricksgsxr

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Sort off topic in regards to pricing but I have been in logistics for over 35 years and anybody that ships Internationally from the U.S. would agree it is pia dealing with harmonized codes and the corresponding rates that apply much less just trying to determine what the corect actual commodity cod needs to be.

When shipping to Canada, France, the U.K and Puerto Rico are painless with seldom any delay for those Countries customs clearing which for those not in distribution Customs clearance is separate part of shipping and whatever carrier you use the service guarantees do not apply to the actual final delivery address due to each Countries clearance process which is sperate entity from the freight carries shipping times.

Ship to India which is the absolute worst Country I have seen to import From the U.S. They can and do change rules on a regular basis and can quickly seize your goods if you do notvompky with the ever changing rules. The demands I have seen i cluding for our proof of cost from our purchase orders and or invoices from our vendors is crazy.

Warranty replacements that could be refurbished and usually are have seen demand for the value used must equal new cost when it is not and clearly documented is not new, a warranty replacemnt not for resale ew, not for replacement.

Maybe it clears, maybe not no consistent pattern. On the other ones shipping New product and using the actual cost have seen many tines say 50 piece order will clear all but 1 or 2 pieces and than demand a new value and host of other items or they seize it. Same for several CarI bean locations.

Than you have China that has specific rules that require certain certification markings which mainly applies to electronic waste and expanded ROHS 2 standards. Not against that, the certifications are better than the rest of the World accepts but the product itself for the most part is identical to the non China versions.
This adds a bit to the cost of the product and ship a non China specific model pretty good chance will never get it back.

So my long winded reply you never hear in the news about what U.S. companies have to deal with when importing goods into International locations. The reverse to send goods to the United States is not only lower tariff cost but much simpler in most cases.

I hate shipping Internationally due to the tariffs which did not exist would make products less costly to sell and ship.

Setting up distribution in other Countries is not always the simple answer when the product still has to get there first and is taxed. Real estate I n Asia Pacific is insanely high.
In the European zone Venlo found us the best in cost as well as favorable import fees with added bonus if your client base is in the Euro zone shipping rates and destination times to arrive are similar to the lower 48 in the U.S where normally would have to ship International Air if shipping from the U.S
 
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   #12  

gobrian77

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So my long winded reply you never hear in the news about what U.S. companies have to deal with when importing goods into International locations. The reverse to send goods to the United States is not only lower tariff cost but much simpler in most cases.
That was a good post- thanks for that.

Regarding the part I quoted, I actually have been hearing lately about how China screws with US imports, and how they'll likely step that up since they can't match tariffs dollar-for-dollar (i.e. delaying the processing of containers full of perishable goods so they rot on the dock). As far as other countries go, there are numerous horror stories here regarding people getting screwed at Thai customs while trying to import cars and motorcycles.
 
   #13  

busa10

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Nobody said it wouldn't cost us to bring some manufacturing back from off shore. At least Trump isn't afraid to take the heat for doing it. Politically incorrect, but that never stopped him.
 
   #14  
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   #15  

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If you're on Facebook, Unbiased America throws in their 2¢ on the "why"

Hiking tariffs to 25% on half of U.S. imports from China — and China retaliating by raising tariffs to 25% on $60 billion of U.S. imports — would reduce U.S. gross domestic product by 0.3% in 2020. And applying the tariffs to ALL Chinese imports, which the president is now considering, would reduce our GDP by 0.5% in 2020. (And yes, that estimate takes into account the positive impact on some domestic jobs).

Increasing tariffs hurts the economy, and every economist — left, right, and center — knows this, including President Trump’s top economic advisor, Larry Kudlow, who is a huge proponent of free trade. So why, then, is the President considering an economic policy that would damage our economy?

Because it would hurt China’s even more.

A 25% tariff on half of Chinese imports would reduce their GDP by 0.8%. And applying it to all Chinese products would increase the damage to 1.3%. That’s nearly three times the pain the U.S. would face.

And THAT is why the Trump administration is threatening to raise tariffs. Not because they think it would strengthen our economy, but because the Chinese know it would hurt them more than it would hurt us.


.
 
   #16  

gobrian77

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If you're on Facebook, Unbiased America throws in their 2¢ on the "why"
I agree that's a good article- at least they mention how the upcoming election could very well affect Trump's actions, and it gives the source of tariff revenue (American business and consumers, who pay it as a tax- all the tweets implying China pays it are BS- at best, as some studies have shown, some product prices were lowered a bit to ameliorate it, but the new 25% tariffs will make that impossible- consumers ultimately pay it). One thing it doesn't note, though, is the state-owned/subsidized nature of the Chinese economic structure- there will be government support there to help businesses ride it out well beyond what will happen in the US (the $12bil subsidy that went to US soybean farmers isn't going to industries like Snail's wood exporting business- Americans at ground level will have a more difficult dealing with the potential issues).

If I were Xi, I might be thinking that seeing the US monthly jobs numbers turn negative and the unemployment rate rise, seeing the US GDP drop or possibly turn negative, and having the US markets take a dive (and again, possibly turn negative for another year), and having fallout from Red States that are taking the brunt of the damage is worth spending some of my huge cash reserves to calm the grumbling of my constituents (and what are they gonna do? Vote me out? Nope...) and taking the hit if it means Trump loses in 2020 (if he doesn't have a strong economy to run on, he's in big trouble). The Chinese think in terms of decades- Trump in thinking in terms of 18 months. If I were Trump, I'd be relying on my past business experience to guide me, which is being a hard-ass during negotiations (though I'd probably have saved dealing with China for my second term and let the economy continue to do well during my first). It's gonna be an interesting battle of wills.

THE REAL REASON THE TRUMP ADMINISTRATION IS THREATENING TO INCREASE TARIFFS ON CHINA
by Kevin Ryan

President Trump went on a tweet storm yesterday about how increasing tariffs would help the U.S. economy.

“Tariffs will make our Country MUCH STRONGER, not weaker… Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do,” the president tweeted. He said that, by placing a 25% tariff on all Chinese imports, the U.S. would bring in “over 100 Billion Dollars in Tariffs”. “These massive payments go directly to the Treasury of the U.S.” he explained.

The problem with this reasoning is that tariff revenue isn’t actually being “brought in” to the US. A tariff is not a fee paid by the Chinese government, or even by the Chinese company exporting products to the U.S. Instead, a tariff is a tax charged to the American company that imports the Chinese goods. The American importer in turn passes the majority of the cost of the tariff along to the U.S. consumer, mostly by increasing prices [1]. Thus, that $100 billion in new tariff revenue “from China” would actually come from the pocket of the American consumer.

And households (and companies) that have to pay more because of tariffs have less to spend (or save, or invest) elsewhere. Which is why tariffs reduce economic growth, far more than they “protect” domestic jobs.

Economic modeling based on the effect of past tariffs can give a good indication of the damage associated with the tariffs, and economists have already calculated the effects of the higher rates being applied to Chinese imports (and the retaliatory tariffs applied to U.S. products).

Hiking tariffs to 25% on half of U.S. imports from China — and China retaliating by raising tariffs to 25% on $60 billion of U.S. imports — would reduce U.S. gross domestic product by 0.3% in 2020. And applying the tariffs to ALL Chinese imports, which the president is now considering, would reduce our GDP by 0.5% in 2020. (And yes, that estimate takes into account the positive impact on some domestic jobs).

Increasing tariffs hurts the economy, and every economist — left, right, and center — knows this, including President Trump’s top economic advisor, Larry Kudlow, who is a huge proponent of free trade. So why, then, is the President considering an economic policy that would damage our economy?

Because it would hurt China’s even more.

A 25% tariff on half of Chinese imports would reduce their GDP by 0.8%. And applying it to all Chinese products would increase the damage to 1.3%. That’s nearly three times the pain the U.S. would face.

And THAT is why the Trump administration is threatening to raise tariffs. Not because they think it would strengthen our economy, but because the Chinese know it would hurt them more than it would hurt us.

Which makes tariffs an effective bargaining chip for the U.S. in the ongoing trade negotiations. “If you don’t agree to better terms, we can hurt you more than you can hurt us.”

That said, the Chinese have one major advantage in this fight that we don’t. Their leaders don’t face an election next year (or ever, for that matter).

If the Chinese call our bluff, and Trump goes through with his threat to drastically increase tariffs, there’s a very real possibility that our economy deteriorates to the point where Trump doesn’t get re-elected.

If that happens, the Chinese would no longer be facing the hard ball tactics of Trump, but instead would find themselves across the negotiating table from someone like Joe Biden, whose family has deep financial ties to China.

[1] Importers can also switch to higher cost, non-Chinese suppliers to avoid the tariff, with the higher cost getting passed along to the consumer; or they can reduce their profits; or use cheaper quality materials; or any combination of these. The bottom line is that the consumer ends up bearing most of the burden.
 
   #17  

Terry_Schiavo

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So one segment of this tariff... is bicycles. The chinsy garbage Walmart kind. So the producers of these shitpiles can simply move production out of China and into Vietnam or Taiwan with no real change in supply times or costs to avoid the tariffs. Problem is... these junkers are pretty much guaranteed garbage dump fillers vs something which costs a few hundred more thats durable and repairable. Most of the walmart bikes arent even scrap worthy.
 
   #18  

gobrian77

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Of course- changes in supply lines from China to other (usually but not always Asian) countries is already happening (while this would reduce the trade deficit with China, it doesn't make a dent in the overall trade deficit- it just moves it from one place to another)- the same thing is happening to US exporters due to the tariffs China imposed in retaliation (Russia, Canada, Australia, Brazil, Vietnam, India, etc are all happily stepping in with cheaper alternatives to what's produced in and exported from America).

Much of what the US exports agriculturally (close to 20% of which goes to China for -$25bil per year) can be sourced in other countries, albeit at (usually) higher prices- these other sources will start looking more attractive if US products are tariffed at 25%- even if tariffs are dropped after a year or so, China importers might be happier with their new suppliers, or might have made contracts that last for multiple years, leaving US exporters out in the cold beyond the period of the trade war.
 
   #19  

luckystrike

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Not a FOX news link...

Ohio manufacturing CEO explains that cracking down on China has meant stability and predictability for his business.


 
   #20  

gobrian77

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Note that the chyron in the video states ''Trump's Trade War Helping Ohio Washing Machine Giant, Costing Consumers'. The cherry-picked sound-bite doesn't tell the whole story.

Whirlpool and other washing machine manufacturers have passed down the tariffs to their customers to the tune of over $1.4 bil- the price of a washer/dryer set is up about 12% combined, even though there's only a tariff on washing machines- of course they're happy, as they're able to fuck over consumers beyond the tariff increase:

Trump’s Washing Machine Tariffs Stung Consumers While Lifting Corporate Profits

If you can't read the NYT article due to their blocking it, try this one- Trump's Washing Machine Tariffs Put Consumers Through Wringer: Study | HuffPost

President Donald Trump’s tariffs on imported washing machines — imposed at the behest of Whirlpool — pumped $82 million into the U.S. Treasury. But American consumers footed the bill — and more — paying a whopping $1.5 billion in increased costs passed along to them last year, according to new research.

That’s in line with other research. A study last month found that the president’s trade war cost U.S. businesses — and consumers — $3 billion a month last year in higher prices.

The tariffs boosted washing machine prices by 12%, according to figures in the University of Chicago study. They also drove up dryer prices by the same percentage, even though they were unaffected by tariffs. Researchers believe manufacturers simply took advantage of the washing machine tariffs to raise prices on an often-paired item.

Like the first comment under the tweet says, 'Now do bankrupt farmers'.
 
   #22  

gobrian77

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What does that mean? I've been arguing my side of various issues (political and otherwise) here for going on twenty years, often with you on the other side- we've been going back-and-forth on tariffs for quite a while (over a year) without pejorative comments (for the most part), and you pull the above post out of your sphincter?:lol:

I also post about rabbits and baby birds- don't hate on me because I'm multifaceted.:razz:
 
   #24  
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not seeing much difference here, 1/2" osb is still under 12 bucks, 2x4's 2.40 something, I'm not seeing it.
2x4 is over 3 dollars, up like 80 cents from last year, if you want one that won't warp immediately, and 1/2 OSB was $8 a sheet a year ago, now it's 12 bucks you say...so have you not been paying attention or what?
 
   #26  
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As long as building materials never go back down in cost, will help America. I understand the big picture there. Food, other consumables though, they are screwing us over bigly.
 
   #27  

Snail

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Tough shit.
 
   #29  

Snail

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The mills bought cheap logs when the export market collapsed. The cheap logs are rotting in decks because the domestic demand isn't strong enough to reduce inventory.

You'd think this situation would result in lower lumber prices, but you'd be wrong. The cost has gone up, presumably to off set their losses from the cheap logs rotting in their yards.

I don't give a fuck, my equipment is laid up, insurance cancelled, contracts cancelled, crew released and permits cancelled.

I don't anticipate any changes for at least a year.
 
   #30  

gobrian77

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Sorry to hear that- I know this trade war ate into your bottom line the last year or so. I was optimistic it was going to end a couple months back, but that was because I bought the official narrative, which obviously wasn't accurate.

Hopefully 2020 will be the year you get back to business (if you even still want to).
 
   #31  

Terry_Schiavo

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rotted deck logs?? Sheathing and 2xs have to be made to a certain standard.
Lets take a private company like Huber... 2.3 billion last year, not too shabby for a private company.
 
   #33  

Terry_Schiavo

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Thats what has been wrong with Mr Lucky ... his deck log(s) are rotted! Makes sense now that hes running the Richard Gere Guinea Pig & Hamster Hotel/Daycare
 
   #35  

Snail

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One door closes, another door opens.
 
   #37  

Master-Cylinder

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I remember being at Lowes a year or two ago and the stack of 2x4's had Product Of Germany stamped on them! WTF!?
 
   #38  
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2x4 is over 3 dollars, up like 80 cents from last year, if you want one that won't warp immediately, and 1/2 OSB was $8 a sheet a year ago, now it's 12 bucks you say...so have you not been paying attention or what?
2x4s have been over 3 dollars since the two hurricanes hit the south over a year ago....along with just about all construction lumber. id seen them over 4.50 for a 2x4x8 at one point in lowes last year.
 
   #39  

Hapo

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...there is camp ground in CT that makes big $$$...it was a farm and one year the farmer tried out the camp ground idea on a small part of the farm after reading an article in some magazine...

...he made out so well that the next year he discontinued farming and put his effort into developing the camp ground...

...now his decedents run a huge successful operation that includes a fancy resaruant...
 
   #40  

hedgehog

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Shit, even Larry Kudlow has contradicted trump on his “making billions from China because of the tariffs “ and said that the American consumer is the one who ends up paying when he was interviewed on fox!

Either trump is deliberately lying to his base and hoping they have no understanding of how the tariffs work, or he’s as dumb as the cons claim AOC is, and has no idea.
 
   #41  

Terry_Schiavo

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:razz::billyv::hang3::comeandgetsome:
2x4s have been over 3 dollars since the two hurricanes hit the south over a year ago....along with just about all construction lumber. id seen them over 4.50 for a 2x4x8 at one point in lowes last year.
yah retail lumber tends to be higher than wholesale/trade suppliers. Considering its more of a durable good...the price is still low.
 
   #42  

Snail

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LS, how are your indices doing?
 
   #43  

Snail

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Good news! The trade war has lowered the price of stocks for U.S. consumers!
 
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but i thought stocks/wall street/etc etc only impacts the upper class? shouldnt it be a good thing that all us rich white folk are down 2% on the day? closing that income equality gap!

or at least that was the spin when the markets were closing at record highs day in and day out =)
 
   #48  

Snail

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When rowing a white water boat in a fast rapid with standing waves it's important to make your stroke at the bottom of the swell to keep your oars in the water; if you try to row while on the crests you'll likely whiff.

Same with stock market.
 
   #49  

sailUSVI

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The piling on ($$$) from company’s that are not effected by tariffs will be alarming...
 
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