Economic, taxes, and tariffs discussion

[Judge Jude]

So according to this logic, consumers should now look to Hyundai or Nissan for their autos, instead of Ford/Chevy/GMC/etc.? After all, these car companies will get walloped with the new Mexican tariffs, but Nissan and Hyundai should emerge unscathed.

not many consumers get wrapped up in tariff philosophy. if they are inclined toward one car, but a tariff adds $2K to the price, they're liable to buy something about as good that is tariff-free, or hold off on buying a car, or even buy a nice pre-owned one because the price jump made that wiser option occur to them - in which case they wind up ahead of the game (unless they are aroused by new-car smell).

what most of them WON'T do is pay an extra $2,000 for the same product. I assume this is not controversial.

there are other problems with this tariff scheme, as I have mentioned repeatedly. but "consumer forced to spend $850 extra because well, they have to stick with the program" is not one of them.

[Hornsby]

[revo]

not many consumers get wrapped up in tariff philosophy. if they are inclined toward one car, but a tariff adds $2K to the price, they're liable to buy something about as good that is tariff-free, or hold off on buying a car, or even buy a nice pre-owned one because the price jump made that wiser option occur to them - in which case they wind up ahead of the game (unless they are aroused by new-car smell).

what most of them WON'T do is pay an extra $2,000 for the same product. I assume this is not controversial.

there are other problems with this tariff scheme, as I have mentioned repeatedly. but "consumer forced to spend $850 extra because well, they have to stick with the program" is not one of them.

Hmmmm.....if low cost goods are the goods that come from China, and now those goods will cost more, where will one find similar goods at that same low price? Have you been to a Wal-Mart recently? How bout a Home Depot or Lowe’s? Because JJ, I have to say, you probably haven’t based on your reasoning here.

And I also think you’re incredibly simplifying how supply chains work. What about cell phones? A family of four may buy 4 new phones every year or two. If they go up 20% as expected, do we all just start buying Korean phones?

So your answer is we all have to change what we’re doing because of one incredibly dumb individual in the White House? Really?

[Judge Jude]

1. China does not have a monopoly on all goods.
2. Consumers can choose to not buy these more expensive goods, due to tariffs.
3. They can choose to buy less expensive (and possibly lower quality) goods instead, and maybe not even notice the difference.

Disclaimer: revo is more of a finance expert than I am, and a straight shooter as well.
and I don't support the Trump tariffs.

I can't explain why he doesn't quite disagree with my narrow point - and it seems like he is not quite conceding it, either. it's a pimple on... well, let's not go there.

[revo]

What I’m saying is, go take a tour through a Home Depot or Wal-Mart. What you’ll find is that the majority of products there are Made in China, I hate to say. I would guess nearly all of the electronics are imported, and in HD’s case, nearly all of the tools. That’s how they grew, through cheaply made goods that the average consumer could afford. Maybe these producers/suppliers have Korean or Vietnamese factories not targeted by tariffs, but my guess is they don’t.

[The Feral Slasher]

all I know is my refrigerator broke and I'm not buying a new one until the alleged "trade war" is over.

[revo]

all I know is my refrigerator broke and I'm not buying a new one until the alleged "trade war" is over.

[revo]

It’s tariff-mania!

"WASHINGTON — The Trump administration announced on Friday that it was stripping India of a special status that exempts billions of dollars of its products from American tariffs, part of a deepening clash over India’s protections for its market.

The White House said that it would terminate India’s preferential market access to the United States as of June 5. The notice claimed that India had not given the United States “equitable and reasonable access to its markets.”

[The Feral Slasher]

It’s tariff-mania!

"WASHINGTON — The Trump administration announced on Friday that it was stripping India of a special status that exempts billions of dollars of its products from American tariffs, part of a deepening clash over India’s protections for its market.

The White House said that it would terminate India’s preferential market access to the United States as of June 5. The notice claimed that India had not given the United States “equitable and reasonable access to its markets.”

I'm ok with this, because I feel the policy was well thought out

[Judge Jude]

I don't buy any of this, because it seems way too risky.

and I am not a supporter.

but if it somehow works, some here will have no social media to inform them of that fact.

and if it doesn't work, some here...

and THAT'S why they call me Judge Jude

[umjewman]

I'm ok with this, because I feel the policy was well thought out

I would say that Trump probably ate some Indian food, got nauseous and decided to make this move. But, there's no way he would eat Indian food.

[Judge Jude]

What I’m saying is, go take a tour through a Home Depot or Wal-Mart. What you’ll find is that the majority of products there are Made in China, I hate to say. I would guess nearly all of the electronics are imported, and in HD’s case, nearly all of the tools. That’s how they grew, through cheaply made goods that the average consumer could afford. Maybe these producers/suppliers have Korean or Vietnamese factories not targeted by tariffs, but my guess is they don’t.

my point is that most consumers will not simply pay whatever markup is imposed on them by manufacturers after a tariff, which is the overwhelming narrative out there. if you can afford to do so and decide to do so, that's great. but most will find alternatives - even if less appealing. as I've said, there are all sorts of problems with these tariffs, but "consumer will have to spend an extra $850 a year" is dopey. they don't and they won't.

[revo]

my point is that most consumers will not simply pay whatever markup is imposed on them by manufacturers after a tariff, which is the overwhelming narrative out there. if you can afford to do so and decide to do so, that's great. but most will find alternatives - even if less appealing. as I've said, there are all sorts of problems with these tariffs, but "consumer will have to spend an extra $850 a year" is dopey. they don't and they won't.

Here's why this may be incorrect: these numbers were not just pulled from the sky, but taken from the actual damage done by the 2018 10% tariffs imposed on China. The Federal Bank of NY did a study which determined these 2018 tariffs imposed an annual additional cost of $419 per family. With the tariffs now having increased to 25%, they now estimate the damage will be $850 per family. This, of course, does not include the tariffs on Mexico and now India & Turkey (both of which may not make much of an impact), but that means these numbers may be low.

Their analysis takes into account "deadweight" costs, which means rather than importers paying tariffs, they look to other suppliers who may be more expensive than their previous supplier but less than the expense with tariffs included. So in other words, they believe importers are ALREADY buying goods from the cheapest options available -- which your reasoning does not take into account.

Not sure how you can disagree, unless you're disagreeing with their logic.

https://libertystreeteconomics.newyorkfed.org/2019/05/new-china-tariffs-increase-costs-to-us-households.html

[Judge Jude]

this

"So in other words, they believe importers are ALREADY buying goods from the cheapest options available -- which your reasoning does not take into account."

has nothing to do with this:

""consumers will have to spend an extra $850 a year" is dopey. they don't and they won't."

I honestly am stumped as to why you seem to believe consumers do not adjust their buying habits if prices rise. they absolutely do.

[revo]

this

"So in other words, they believe importers are ALREADY buying goods from the cheapest options available -- which your reasoning does not take into account."

has nothing to do with this:

""consumers will have to spend an extra $850 a year" is dopey. they don't and they won't."

I honestly am stumped as to why you seem to believe consumers do not adjust their buying habits if prices rise. they absolutely do.

And I'm honestly stumped that you don't see that they didn't in 2018.

Do you have any proof of your statement? Or is it just conjecture? Because I just showed you proof that consumers did NOT adjust their buying habits in 2018, that they just paid the higher prices.

Should I show you how much in additional costs Americans paid on washing machines, tarriffed by Trump in Jan 2018? Using your logic, they should have forgone buying them -- but they didn't. Consumers just absorbed the increase, to the tune of an additional $100 per unit, all caused by tariffs. Giddy/greedy manufacturers also jacked up the price of dryers by the same amount, and they WEREN'T hit by tariffs, because hey, why not? You're gonna buy a dryer if you're buying a washing machine! Yet American consumers still bought them. I'm stumped that you don't believe this.

https://www.nbcnews.com/business/consumer/trump-s-washing-machine-tariffs-are-costing-americans-almost-100-n999461