Posted on 10/30/2018 6:37:00 PM PDT by TBP
“Who do you think pays it?” (Tariffs)
It will be distributed. Producers will have to eat some of the cost, to compete. The Chinese Government has already allowed their currency to weaken against the dollar, eliminating most of the cost to US consumers for the initial 10% tariffs (which makes the Chinese public the bill payers for that amount).
But your point is probably that that US consumers will pay the bill. Yes, there will be an effort to pass costs along to the consumer. Yes, costs to US businesses and consumers will rise for some of the items, for some time. But US consumers in no scenario will be paying a full additional 25% on ~$500 billion in goods (total Chinese imports). So the worst case is less than that $125 billion in additional cost across a $20 trillion GDP (0.625%).
Substitutions will occur. Some will occur immediately, because competitors have stock on hand, and US consumers will see no price change. Some substitutions will become available in a matter of months, as competitors expand production, and new delivery contracts are signed. Some substitutions will require new facilities to be built, which could take 2-5 years.
Businesses have had warning, and the lead times have been running already. President Trump started rotating business leaders through the White House with a week of his inauguration, telling them that production would have to be re-shored. He started telling everyone while he was still on the campaign trail - from his initial announcement as a candidate. The message has been strong and consistent, and its credibility has steadily grown - now undeniable. Many businesses are already far down the road of planning and preparing.
The CEO of manufacturing giant Foxconn, famous for its large assembly facilities in China, making iPhones and other iconic products, said that planning relocation is the company’s top priority, being pursued on an emergency basis - last year. This year they announced they are building in Wisconsin.
So who do I think will pay?
For the most part, I think that the cost will be avoided, by shifting to substitutes. What payments are made, will mostly continue temporarily, until final substitutes are available. I can’t think of anything on which no one else in world could possibly compete with China. They are replaceable. India has more people, and lower labor rates, for example.
What costs are imposed on the American economy will be only a temporary drag of a few tenths of a percent on GDP (worst case), which will purchase a long term addition to our industrial base - which will provide a long term stream of employment income, tax revenue, and corporate profits.
There will be particular products where shortages and price increases will be pronounced and apparent (low end bicycles perhaps), but I doubt that even the outliers will continue long term.
It’s a tax, and that’s an expense. They’ll pass that along to us.
“You know what? We have too much junk anyways.
We don’t need to buy so much stuff.
Just quit buying all that junk from overseas that you don’t need anyways, and voila` you’re ahead of the game.”
Amen to that. You’d be surprised what you can buy at a thrift store these days. I found a whole set of Revereware copper bottom, stainless steel pots and pans that were made in the USA years ago. They have a few scratches, but are better made than the most expensive pans one can buy at Macys.
People go to a store and pile up on stuff they don’t really need. Most small appliances and furnishings from China are cheaply constructed and not meant to wear for more than a few years. The grandkids can also do without lots of plastic toys made in China or just be content with less items for Christmas.
I’d rather pay more for USA-made quality that lasts, than imported garbage. 2 years ago, I invested in a “My Pillows” set. They were definitely worth the price. They plump up nicely and haven’t lost their fluff and comfort after several washings.
“It’s a tax, and that’s an expense. They’ll pass that along to us.”
Communist producers must compete on price. Their competitors don’t have that expense.
If they try to charge us 25% more, we can (will) buy from someone else instead - someone who offers the lowest price (no such tariff on US producers, or the rest of the world).
The tariff is on the communist Chinese - it makes them non-competitive on price. It is to cut them out of our market, because they lie, cheat and steal; and use the profits to undermine us and attack our allies. They are hostile, bad actors - communist dictators running an oppressive police state - who are not like other trade partners. Their 5 megaton city busters are targeted at US cities.
They have no monopoly power to force American consumers to buy their crap at any price - we only buy it because it is cheap. Anybody else who sells cheaper snap will up their former business.
In my view, President Trump does not want a trade deal with China, like he did with Mexico, Canada, the EU, Japan and Korea. I think that the objective is an economic divorce from China, to stop empowering them, and to wean America off any dependence on them. They are not our friends, they are active enemies in many ways. They are our biggest Strategic threat.
Those other major trade deals (an epic amount in less than two years) all include new enforcement to prevent communist China from using those markets to trans-ship their products into our markets. Closing those back doors, and preparing the US economy (through tax cuts and de-regulation) to be competitive enough to pick up much of the business from China, were the Strategic set-up, for these Strategic tariffs.
Tariffs hurt China.
Tariffs are a TAX paid by the consumer buying foreign made products. Essentially they are a self imposed tax because you can make the decision NOT to by that foreign made product and buy domestic made products.
“It’s a tax, and that’s an expense. They’ll pass that along to us.”
Unlike a tax, it is not put on everybody.
If everybody has the same added expense (tax), it is still a level competitive playing field, and they will continue to compete with the same profit margins - the added expense raises all prices equally (passed on to consumers).
Consumers have NO options that don’t have that added expense (tax).
In a case where one competitor has much higher expenses than the others (tariff), just that one is not competitive on price. All the others will continue to compete on price with each other - just without the high cost producer, who is priced out of the market.
Consumers have other options without the added expense (tariff).
There are taxes that aren’t on everyone. It’s a tax the government charges importers, who then pass it along.
LMAO
All these pansies have still not figured out that his tariffs are intended to get other nations to lower their tariffs.
It’s a negotiating tool.
It’s embarrassing to watch folks wet themselves missing the forest for the trees.
If Europe drops their tariffs, the end result will be lower tariffs for everyone.
Oh the huge manatees.
Duh!
Except for one thing...
It only impacts companies importing things, from countries with the tariffs.
There is zero charge for goods not imported from a country which is not being charged a tariff.
The people who are opposed to tariffs are in my view, supporting the other countries, who are being charged the tariffs.
Period.
“There are taxes that aren’t on everyone.”
Yeah, sales taxes.
“Sh** flows dowmhill”, all costs are passed on to the most economically weak. Who can’t pass it on.
So far the costs of these tariffs have benn borne by China. Within China these costs are then passed to their weakest.
Less pay for the peasant, less opportunity. That’s a problem for their leadership.
And remember, this is all only because they won’t play by the rules.
“It’s a tax the government charges importers, who then pass it along.”
What don’t you understand about competitors offering a lower price?
If their competitors can offer a lower price, the communists CAN’T pass along their higher costs - they lose the business.
Tariffs on the Chinese don’t occur in a vacuum, or a monopoly, they occur in an open competitive marketplace.
If one gas station gets a 25% tariff placed on it, but not any of the other gas stations do, will you buy the expensive gas for 25% more, or buy it from another gas station instead? They won’t pass on a 25% price increase to you, if you can get it elsewhere much cheaper.
They can’t pass on their higher costs, if customers have better substitute options.
Patience is the game. You have to give
US businesses time to catch up. It took
years for jobs and manufacturing to
leave the US. It may take years to
get it back. To hell with inferior
Chinese made junk. I worked for 15
years at an American made bus plant.
It was gone virtually overnight,
due to greed and the bottom line.
Ride out the Trump storm....calmer
days are coming.
Carbon tax? This guy is a fool.
I asked on the FR Texas Board who had read the 194 page China Tariff List. Crickets.
Has everyone commenting here read the list?
For your edification:
https://www.scribd.com/document/388885888/US-China-Tariff-List-09-17-18
Loads of good copper bottoms Revere etc in my local thrift stores too. Corelle and Pyrex ware too. I look to re-live America’s great industrial past and who knows about the future, It is not yet written.
Just a misdirection from what the Fed is doing.....don’t go all concern-troll because some short term inconveniences pop up in a long term boon...funny how many who claim to be altruistic go all “NIMBY” if they have to suffer the least inconvenience...and then wonder how we got here.......hint, it’s because our selfish desires ain’t much different than the Left but when we manage to stifle them we can do great things.
Tariffs have no where near the impact as 8 FFR hikes and QE reversing. A 10-20% tariff on 200b in Chinese goods at most would be a 0.1% to 0.2% GDP drag if 100% of it was passed onto the consumer (and none of it($20b to $40b in $20T economy) born by the Chinese firm) AND the taxes collected were completely shredded and not put to any GDP producing goods.
I am amazed at the stuff I’ve seen in thrift stores.
I’ve seen brand new LL Bean and Land’s End clothes.
Lies. I work for a mfg co, and we have to pay the tariffs, but business is so good, they are paying bonuses. And carbon taxes are immoral.
And then again they MAY NOT. The economy is roaring and we win with Trump all the time. Any questions?
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