Yup. I am the international buyer at my Made in America company. We pay the tariffs. We do not absorb them it gets added into the price. And when China is 50-75% lower than American made, another 30% tariff isn’t going to bring the business back here. I kept posting that on my Facebook for weeks before the election. No one listens.
Everyone seems to be wringing hands about policy, but this is just another datapoint that propaganda won this election.
Even worse, China has already begun moving their Chinese-owned production to Malaysia, circumventing the tariffs on Chinese imported finished goods.
I heard about this a few months back on a podcast about auto parts. China just shipped the fan belts they were making to a warehouse in Vietnam, rebranded them, and shipped them to the US, tariff free.
They did some sort of chemical analysis on the Made in China and Made in Vietnam belts and the formulation of the rubbers was identical.
Enforcement to counter this would likely eat up too much of the tariff money, so it just won’t be done. China will still get paid the same, and at minimum we’ll eat China’s additional shipping costs.
That is really interesting, what is the name of the podcast?
I was able to find it!
It is Planet Money - The Trade Fraud Protective 23 AUG 2024
Audio and transcript at that link, or you should be able to find it on your podcast app of choice.
It’s also power steering hoses in Thailand, not fan belts in Vietnam, so I hope that’s still ok. 😉
Thank you
My pleasure!
One possible silver lining:
By removing dirt-cheap goods from the market, this could make it more difficult to ignore the underlying problem: People are not being paid enough for their labor to afford the things they need at home. Instead, they are expected to depend on subsidized/sketchy foreign manufacturing, while corporations and the super-rich are being allowed to extract a disproportionate share of the world’s wealth from everyone else, hoard it, buy favorable legislation and policies, and avoid paying their fair share in taxes. This is already unsustainable; tariffs will make it more obvious.
(I don’t imagine this is why Trump wants tariffs, but perhaps he’ll accidentally place the straw that breaks the camel’s back, leading lawmakers to face either reform or revolution. Unfortunately, I think it’s likely to make things worse for the rest of us before it makes things better.)
That is not an issue, that’s how billions of people rose out of poverty.
Once again, corporate america will use this as an excuse to raise prices more than necessary, gouging the people and stuffing the pockets of CEOs.
The average American is already stretched to the breaking point with what overinflated goods they can afford. We’ll soon see people either buy just the bare essentials or start stealing at a much higher rate than we already have. Food riots might very well be a thing in the world’s richest country soon.
The genius part is now that Republicans are in charge of the government here, deficits no longer matter, and they will push through huge tax cuts on the rich. These massive tax cuts will only trickle down to working folks in the form of direct rebate checks, just to give Trump an excuse to have his signature all over them. Trump will convince these people that the additional money is to help offset rising prices, and his voters will believe it.
Deficits will no longer matter until after the midterms, and then if Democrats can gain back control of either house of Congress, the deficit will become a big problem again, that can only be solved by slashing more programs. The checks will stop, and Trump will blame Democrats.
Yep, and the prices will stay high even after the tariffs are gone.
Grocery stores are the worst about this too. Prices are still absurdly high despite there being no more supply issues from covid.
Correct. Trump’s 2017 tariffs raised the price of foreign made dishwashers by 20%. American manufacturers also jacked up the cost of their appliances, in order to match that price that customers were paying for the other brands, pocketing the difference.
That’s the point
inb4 products that have absolutely no supply chain dependence to China ‘somehow’ increase in price.
- It’s Walmart: what item they sell has no connection to China?
- It’s important tariffs actually the board not just China
I think a lot of their food items aren’t from China, and a few random things are even domestic. I think they sell Lodge cast iron pans, which are fully made in America.
I think his “plan” is a really big tariff on China and a moderate one on every other country?
That’s my understanding as well.
But, as the original comment suggested, it doesn’t really matter.
If every other cast iron pan goes up 15% in price, what do you think Lodge will do?
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keep their price the same, see modest relative increase in market share with a demand for investment in additional production, knowing full well the tariffs aren’t going to be permanent leaving them over-invested in production whenever they drop the tariffs.
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Also raise their prices by 15%, immediately show increased revenue at no additional cost to shareholders next quarter. CEO gets massive bonus.
I would imagine production cost for lodge could go up since they source the material from scrap yards and if the cost of iron in general goes up because a percentage of it is imported than the cost of scrap should increase as well.
Mexico is already threatening a reverse tariff.
Lodge doesn’t have shareholders, they’re family owned.
That comes with its own caveats, but they’re not the same ones you get with publicly traded companies.
I agree with you. In addition to what you are saying, if Lodge exports to other countries and these countries fire back with tariffs of their own, there will be increased pressure to raise prices in the US to make up for the loss of revenue abroad. I’m not from the US and don’t know if that is the case for Lodge specifically, but it will surely be the case for a lot of US brands
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I didn’t know Lodge only used American iron - do you have a link to that somewhere? I tried finding it on Google but couldn’t. It’d be useful to have handy when talking to the “America doesn’t manufacture anything anymore” crowd
Hey now, the Waltons need some extra cash. Who could even get by on a measly four million dollars a hour in this economy?
Gotta prepare just in case one of them gets drunk and murders a person with a car again.
The fact that they’re sending this message now means they will use this as an excuse go raise the prices even higher than nessesary to increase their profit margin. If they really cared about consumers then they should have been yelling from the treetops BEFORE the election.
They said this the last time it happened… During his last presidency.
Walmart Chief Financial Officer Brett Biggs said in an interview that higher tariffs will result in increased prices for consumers.
If only someone else said something about how bad these tariffs would be…
https://amp.miamiherald.com/opinion/article292867514.html
https://www.euronews.com/business/2024/11/04/how-much-could-trumps-tariffs-damage-europes-economy
https://thehill.com/opinion/finance/4938752-trump-economic-policies-impact/amp/
https://amp.cnn.com/cnn/2024/10/16/politics/trump-fact-check-john-deere-economy
https://www.semafor.com/article/10/18/2024/what-are-the-consequences-of-trumps-tariffs
https://www.businessinsider.com/trump-tariff-threat-john-deere-economists-baffled-2024-9
https://fortune.com/2024/08/16/trump-tariffs-trade-war-inflation-economic-policies-joachim-klement/
https://www.cbsnews.com/amp/news/yellen-speech-tariffs-will-increase-inflation-risk-trump/
I’m not saying no one was warning us against tarrifs, just pointing out that Walmart specifically waited until after trump was elected (apparently twice now) to announce their warning about tarrifs.
Walmart doesn’t have an obligation to educate the American electorate.
Yes that is true, so ask yourself why they would make such announcements after they know it won’t change anything. Best case scenario they are trying to save face for when the tarrifs drive up prices. Worst (and IMO most likely) case is that they use it as an excuse to further increase their profit margins, much like they and other stores did when there was an increase in inflation.
While I don’t disagree, from a business standpoint, yeah, exactly what you said, the reality is they’re coming. When prices go up, they just told everyone who to blame, rather than trying to deflect after having to raise prices.
Ah, well let’s hope voters don’t need a third warning just from Walmart to realize the danger the next time this pops up.
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Glad they said this after the election
/s
They don’t give a shit that the customers will be paying more. In fact, if anything, they probably love the excuse to jack up prices further - or further cut their workforce to the bone, or whatever the latest fad in padding executive compensation packages is.
I’m sure they probably do - shit as Walmart is a depression in consumer spending is overall bad for them.
What are the customers going to do? Buy from someone else? Wal-Mart is already often the cheapest option around.
It’s already often the only option around. So many small businesses like local supermarkets and hardware stores got closed down in small towns by Walmart moving in and now there’s no alternative. I see it all over in central Indiana and Illinois.
No but they’ll buy less overall even from Walmart.
Buying less, but they’ll be spending the same amount of money, barring rises in other expenses not directly related to tariffs (rent, utilities, etc). Their quality of life will simply go down. Wal-Mart doesn’t care about that. We could all be medieval peasants for all they care.
Less sales but more expensive, so same income, less costs.
Also less regulations, so they can sell crappier and cheaper alternatives for the same price.
Also, lower taxes on big corporations.
And they’ll probably be able to use the private prison system to turn shoplifters into very cheap slave labour, saving on wages.Seems like a win-win situation for Walmart, though not so much for its customers.
No shit.
Tariffs alone will not revive domestic manufacturing, the demise of which has numerous causes, but two in particular.
1.) Corporations maximising profits. I don’t think this needs much of an explanation.
2.) Consumer apathy. By which I mean consumers not giving a shit and consistently buying the cheapest garbage possible without regard for the long term cost. Quality products cost more money up front and ideally have a lower total cost of ownership. But, the average consumer only cares about the price tag on the shelf. The long term costs of this behavior and the related disposable culture are enormous.
Unfortunately, one of those costs are the loss of middle class jobs cranking out products at a plant in Ohio because now the plant is an empty field and the jobs got shipped overseas.
Reminds me of this Jib Jab video from like 2005.
2.) Consumer apathy. By which I mean consumers not giving a shit and consistently buying the cheapest garbage possible without regard for the long term cost.
This has some validity, but it is not as simple as just saying, “American consumers are stupid” and having done with it.
Quite a few shoppers, possibly even the majority, are living paycheck-to-paycheck and cannot afford anything other than whatever the cheapest thing on the shelf is. They are barred from making sound long-term purchasing decisions because they don’t bring in enough income to afford the superior product, even if they wanted to. It’s a case of, buy what they can afford regardless of low quality, or nothing. This is the real life version of the Vimes’ Boots Economic Theory.
I will also point out that a huge portion of spending by individual Americans is on perishable commodity goods with largely inelastic demand, the purchasing of which cannot be put off. In plain English, that’s food and fuel. I will also point out that these are two categories that are to many decimal places absolutely not tied to Chinese importation in any way whatsoever (in fact, the vast majority of food sold in America is grown and packed in America, and when you take prepared foods into account that number rises to near as makes no difference to 100%) so we automatically know that any supposed “tariff” increases on these products are in reality just a bullshit profit grab by retailers and/or Kraft-Heinz or Nabisco or whoever the fuck.
There is a link between tariffs and food prices, the vast majority of American agriculture is mechanized and the machines and their parts are mostly manufactured overseas. As are the trucks that account for a huge percentage of the distribution network.
It’s also impossible to know if the 30$ item will actually last twice as long as the 15$ item. What is clear is the price tag.
Yeah, people act like there are all of these high quality substitutes available. There isn’t, and they aren’t coming back.
Just take a gander at the buy it for life subreddit. Every comment on each post is “Yeah this product was high quality, but since then they have cut x, y and z corner and the quality is now trash”. A lot of those products are American made, and now they are crap.
So no, I don’t care anymore because it’s a crap shoot. Nothing is indicative of quality, not even price anymore. I have dirt cheap Chinesieum items that have far outlasted their USA made counter parts, some already almost by a decade.
Trying to speak sense to Americans. You are in for a rude awakening. They will blame the high prices on space lasers.
And immigrants, “wokeism,” and Obama, Joe Biden.
Tariffs make companies able to compete better within the walled garden, but weakens their competitiveness worldwide. It creates a race to the bottom inside the garden, but makes them weak outside the border. They also makes prices increasefor the local buyers. Costs get passed along, it’s not as if manufacturers are going to absorb increases, they don’t need to. GM, Ford, Chrysler are all going to pass them on (as any domestic manufacturer)
Where does the money raised by the tariffs go?
Mar-a-Lago
They are effectively a tax and are collected by the federal government. One of Trump’s yapping points is to get rid of income tax and use the money from tariffs to replace that lost tax income. This will hurt 90% of people in the US because the amount they will pay in higher product costs due to tariffs will be higher than the cost of the taxes they pay. The wealthy on the other hand won’t have to pay their fair share.
Yeah, no shit. How the fuck do people think tariffs work?
In their minds, they literally think of them as some sort of “cover charge” that foreign manufacturers pay to get their goods into the US, and that they will do so gladly and neither seek other places to sell nor raise their prices. They think that these companies will eat the losses until they decide to build factories in the US, or they will simply wither away and American factories will sprout up like dandelions in a sidewalk.
The fact that all of it is completely wrong doesn’t matter, because the people telling them otherwise don’t have on a red hat and an ill-fitting suit.
If they knew how tariffs worked, fewer of them might have voted for the dumbass proposing to make things cheaper by raising them.
The same way they thought “Mexico will pay for the wall” was gonna work - they didn’t think about it at all.
They just blindly trusted the habitual liar, despite all evidence to the contrary.
“Think”?
They are also super easy to explain. It is a tax. That is increasing yet another tax - vat.
USA doesn’t have VAT
Cool. Sales tax then. Almost the same thing. Consumer pays it.
My new job came with a 10k sign on bonus and I just got the first half 3 months in. I have to pay the whole thing back if I leave within 2 years. I was planning on keeping all of it in high yield savings in case I need to slap it back down on the table and run, and best case scenario at the end I have a house downpayment.
Y’all. I got taxed more on this check than I made in working hours. I got the 5k bonus and 3k of working hours. I paid over 3k in taxes and didn’t even net 5k this check. It was 4900 something.
I understand that I’m not “poor” anymore but I’m still paycheck to paycheck (I wound up just paying off some credit card debt; I’ll get a loan if I need to run). More importantly I have a real job. I’m not some marketing desk jockey or a landlord or an MLM “entrepreneur,” I’m an inpatient bedside nurse. I don’t want to sound full of myself but how does Jeff Bezos not pay any taxes and I’m over here paying 37%???
Taxes are usually taken out using the monthly amount like a yearly amount. You’ll probably get a lot of it back when you pay taxes for the year.
You will definitely get a lot back. They tax it like you make $8k every month.
You should reduce your tax amount that your company is paying for you to the IRS. You can calculate it yourself and tell your company to modify it.
Form W-4 is the paper you’re supposed to use, they may have a digital version they prefer, but that’s the thing to look for. You can adjust your withholdings that way.
Withholding. That’s the word I was looking for. I shouldn’t be on the internet seconds after I wake up.
I would check with your local laws but it’s very rare those kinds of policy are enforceable. If you need to pay them 5k to quit, it’s akin to slavery.
No, they’re actually pretty common in certain industries, and definitely enforceable, at least for sure within the state of California. If you sign a contract that says you get a certain amount of money for starting a job, contingent on working for them a certain length of time, that’s typically paid out on day 1, but you have to pay it back if you leave early.
Ya for sure, my point is more that compagnies will use it even in place where it isn’t enforceable. Although it’s an anecdote, it did happen to my sister in a place where it wasn’t allowed. They didn’t even ask again after the first time she told them to pound sand.
I also really doubt if it’s enforceable in California if there is a valid reason. I can’t imagine a company going after someone if they quit because of a toxic environment, lax safety standards, sexual harassment or something similar. But I’m just making an educated guess tbh.
I knew about it in California but it always surprises me with its reputation.
I wouldn’t doubt companies would use it any place it’s not enforceable, and at least attempt to collect.
I’m not sure the nuances of it, other than having talked to a couple of people who were in that situation, talked to an attorney, and ended up paying. I would suspect having a valid reason like sexual harassment wouldn’t affect if it’s enforceable per se, but give you a lot of leverage to convince a company it isn’t worth pressing the issue.
Yeah slavery is pretty much just legal in a bunch of the US. It could be worse, I could be a prison laborer or one of those immigrant nurses who have been basically legally human trafficked into high violence positions like psychiatry, ER, or skilled nursing facilities (nursing homes, lots of dementia with little support / backup). I do work psychiatry but I’m an actual psych nurse as opposed to a medical specialty nurse who got suckered into it with no actual psych experience and now is stuck dodging punches to keep their green card. It’s really hard to not sound prejudiced when honestly my biggest problem with them bringing in so many international nurses is that they’re doing the immigrant nurses dirty. The fact that their abuse exists as a mechanism to depress my wages is just icing on the shit cake.
Obviously. The point is, that if you make the product in the United States, you won’t pay the tariffs.
Who would have thought that importing a product from China is when the 30% tariffs would apply?
Biden never rolled back Trump’s 2017 Tariffs. Why didn’t he?
Oooooooooo
The problem is that it makes everything more expensive. With the alternatives costing 30% more all the domestic just raise their prices by 30% to match. Of course that gives some wiggle room for domestic to be like maybe 1% lower but basically everything shoots up because capitalism and extracting as much value as possible.
Like when the steel and aluminum tarrifs went into effect the domestic prices jumped up with it.
I think once China slapped on retaliatory tariffs om farmers and the US had to drop a new wave of subsidies it locks in the tariffs a bit until a new wave of negotiations can be made. I suspect China stalled those negotiations in hopes they could dupe trump into a better deal.
Given Trump is saying that the trade deal with Mexico is bad (the deal he negotiated) and is threatening tariffs on Mexico its clear he is just using tariffs as a scare tool. Unfortunately every world leader saw him get dog walked in the debates and knows he’s a moron so now its unlikely he’ll be taken seriously.
We need more tariffs and subsidies not less.
Major costs for most people are housing, transport and groceries - mostly domestic products already. We’d be far better off reducing those prices first.
Realistically the US would need to import raw materials for things like electronics so for a lot of things it would just raise prices and domestic infrastructure/manufacturing would remain unchanged.
This is why Trump wants immigrant labor camps
In the end, this glues China and Europe together to prepare the next disaster…
It would have been helpful if they made this statement before the election.
