Economic, taxes, and tariffs discussion

[DMT]

Facts are open to interpretation in Trump's America.

JJ I posted a link explaining inelasticity of demand. Yes, there are certain non-essential items that consumers can forgo or find alternatives to, but there are plenty of goods that they can not. And considering these tariffs are impacting suppliers of components as well, they're not even going to understand how they're being impacted.

https://www.thebalance.com/inelastic-demand-definition-formula-curve-examples-3305935

[Judge Jude]

"consumers did NOT adjust their buying habits in 2018, that they just paid the higher prices."

if true, imagine how stupid those collective executives are. they could have been charging more all along, but they were too dumb to see it.

if you can charge $100 for a product or charge $75, and the consumer will eagerly accept either price, why would any company on this Earth charge $75? it makes no sense, but you're saying that's what they all did.

also, even if that was what happened, it has nothing to do with the idiotic meme of "tariffs will force Americans to spend an average of an extra $850."

that's obviously false. consumers aren't forced into anything.

[revo]

"consumers did NOT adjust their buying habits in 2018, that they just paid the higher prices."

if true, imagine how stupid those collective executives are. they could have been charging more all along, but they were too dumb to see it.

Many suppliers were forced to price their goods higher. Other suppliers, unaffected by tariffs, either then followed suit even if they didn't have to because that was where the market was taking them, or priced it slightly higher, because, well, they now could. Did you read the article I posted on washing machines and dryers? In regards to washing machines, the average price went up 12% in 2018 alone. I would assume there were at least some companies unaffected by tariffs who didn't raise their price, but in the grand scheme of things, it doesn't really matter, because Americans did in fact pay $1.5 BILLION MORE for washing machines in 2018 than they did in 2017. Your faulty logic says they should have just raised prices in 2017 or earlier since they should have realized Americans would pay a higher cost anyway. But you're not taking into account the current market and existing profit margins.

Your logic relies on 20-20 hindsight, which doesn't make sense.

[DMT]

Many suppliers were forced to price their goods higher. Other suppliers, unaffected by tariffs, either then followed suit even if they didn't have to because that was where the market was taking them, or priced it slightly higher, because, well, they now could. Did you read the article I posted on washing machines and dryers? In regards to washing machines, the average price went up 12% in 2018 alone. I would assume there were at least some companies unaffected by tariffs who didn't raise their price, but in the grand scheme of things, it doesn't really matter, because Americans did in fact pay $1.5 BILLION MORE for washing machines in 2018 than they did in 2017. Your faulty logic says they should have just raised prices in 2017 or earlier since they should have realized Americans would pay a higher cost anyway. But you're not taking into account the current market and existing profit margins.

Your logic relies on 20-20 hindsight, which doesn't make sense.

Bingo.

[revo]

And another thing about Dopey's completely misguided Mexican tariffs --he has his YMCA deal in Congress that specifically states that there will be no tariffs on Mexico for 25 years. But if he just goes around them, like he just did, the entire pact is worth less than the dogcrap on the bottom of your shoe. Nice job, Dopey!

[Bernie Brewer]

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.

Because it doesn’t fit the narrative. but I understand what you’re trying to say and I largely agree JJ. Consumer spending will decrease and people will put off buying a new car, high end applicables or electronics, unless they can’t. Then they’ll bite the bullet. They did just that in the great recession.

But, notwithstanding the overly hyperbolic postings of revo, he is right that these tariffs are stupid and completely avoidable. Trump is hurting the very people who voted for him. The dairy industry in Wisconsin is in major trouble.

[revo]

I hope you guys realize what you’re saying. If consumer spending decreases, then the economy goes into a recession. So if you’re saying that tariffs will increase prices, which will lead consumers to stop spending, then the economy is heading towards a recession.

Again, I thank you both for proving my point, that no matter which way you turn, tariffs are disastrous.

[Judge Jude]

neither one of us has supported the tariff scheme.

the only debate is whether consumers are fools - and some evidence is being offered that they are, as well as that companies seriously misjudged the American price-point willingness - or whether they will not be "forced" to spend an extra $850.

I stand by my observation. consumers have choices - even those too dumb to make those choices. nothing in the discussion has refuted that.

[revo]

neither one of us has supported the tariff scheme.

the only debate is whether consumers are fools - and some evidence is being offered that they are, as well as that companies seriously misjudged the American price-point willingness - or whether they will not be "forced" to spend an extra $850.

I stand by my observation. consumers have choices - even those too dumb to make those choices. nothing in the discussion has refuted that.

If Nike is forced to raise prices by 25%, which they have claimed is possible if they don't get an exemption, do people stop buying Nike? If Apple is forced to raise prices of its iPhone by $160 because of tariffs, which is being reported, do people stop buying the iPhone? If Under Armour is forced to raise prices by 25% because they produce their products in China, do people stop buying Under Armour? If Foot Locker has to sell sneakers 25% higher than they were, do people stop buying sneakers (or, as I assume JJ believes, they buy knock-off sneakers from Wal-Mart?) If avocados, asparagus, cauliflower, celery and kale go up 5%-25% because of tariffs, do people stop buying them?

By the way, here's a list of SIX THOUSAND products that will become more expensive because of tariffs. Pick out those you think consumers will avoid.

https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List-09.17.18.pdf

The reality is we have NEVER faced an onslaught like this. So if you think consumers will just sit on their hands, I have a bridge to sell you. Which is now more expensive because of tariffs!

BTW, isn't it amazing that a Republican is doing this? Republicans....beacon of free trade, pillar of the business community.....ya, not any more! #thanksdonald

But, notwithstanding the overly hyperbolic postings of revo, he is right that these tariffs are stupid and completely avoidable. Trump is hurting the very people who voted for him. The dairy industry in Wisconsin is in major trouble.

I wish I could feel some compassion, but I don't. That's what happens when you elect, and egads, continue to support, a rank amateur who has no idea what he's doing to be your leader. Bon voyage, dairy farmers! Maybe Joe Biden will help you guys out of your rut.

[Bernie Brewer]

If Nike is forced to raise prices by 25%, which they have claimed is possible if they don't get an exemption, do people stop buying Nike? If Apple is forced to raise prices of its iPhone by $160 because of tariffs, which is being reported, do people stop buying the iPhone? If Under Armour is forced to raise prices by 25% because they produce their products in China, do people stop buying Under Armour? If Foot Locker has to sell sneakers 25% higher than they were, do people stop buying sneakers (or, as I assume JJ believes, they buy knock-off sneakers from Wal-Mart?) If avocados, asparagus, cauliflower, celery and kale go up 5%-25% because of tariffs, do people stop buying them?

By the way, here's a list of SIX THOUSAND products that will become more expensive because of tariffs. Pick out those you think consumers will avoid.

https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List-09.17.18.pdf

The reality is we have NEVER faced an onslaught like this. So if you think consumers will just sit on their hands, I have a bridge to sell you. Which is now more expensive because of tariffs!

BTW, isn't it amazing that a Republican is doing this? Republicans....beacon of free trade, pillar of the business community.....ya, not any more! #thanksdonald




I wish I could feel some compassion, but I don't. That's what happens when you elect, and egads, continue to support, a rank amateur who has no idea what he's doing to be your leader. Bon voyage, dairy farmers! Maybe Joe Biden will help you guys out of your rut.

Well, that’s insensitive! If that’s how the Dems speak to the disenfranchised former Trump supporters, the Dems will once again only have themselves to blame for the next four years GOP control on the Senate and likely Trump in the WH.

[onejayhawk]

Do you in any way disagree that a tariff is just a tax on US consumers at this point? The importers pay the tariff and pass that onto the consumers. We are getting taxed so he can change the conversation about Mueller. This is a terrible idea and we are all going to be the ones to pay for his latest temper tantrum.

How a tariff works...https://www.taxpolicycenter.org/taxv...nd-who-pays-it

Only if you get weird with your definition of tax.

Calling it a tax is a simplification for popular use. The problem is that oversimplifies. For example, the definition does not allow for an economy finding alternatives. If Americans do not buy Chinese, then no tax.

There is no denying it is a weapon that cuts both ways. Calling it a tax has connotations that the author wants to push, even when not appropriate. Remember that Japan, South Korea, Germany, etc. will be glad to supply similar goods.

Ok are costs going to rise on products? This is a tax, the importers aren't just going to eat the cost for any sustained period of time.

https://www.cnbc.com/2019/05/31/costco-is-looking-at-alternative-sourcing-and-price-hikes-as-tariffs-loom.html

https://www.cbsnews.com/news/china-tariffs-dollar-tree-ceo-warns-next-round-of-china-tariffs-could-hurt-shoppers-in-investor-relations-earnings/

http://fortune.com/2019/05/16/walmar...eases-tariffs/

Now you have gone from saying it is like a tax to saying that it is a tax. That is incorrect. You can model it similarly to a VAT but it is not the same.

Importers have been eating inventory and going broke since before humans learned how to write. They may want to pass on the costs, but they still have to produce a product at a price people will pay. This is why it is better to model them as a disincentive or a drag on the market rather than a tax.

And if companies eat the higher cost, what happens next?

That's called business. Some businesses go broke. Some make more money. Some hunker down and wait for a change in their favor. Want a Cuban cigar?

J

[onejayhawk]

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/con...st-100-n999461

Not a bad article. I take issue with calling it an import tax, but we covered that. It's not completely wrong, just misleading.

The main thing to take from the article is how small the hit is. Even at worst case, the initial hit is less than $1000 per household. What the article does not cover is the longer term, which is other suppliers stepping into a void. Give it another year and the situation improves for USA and deteriorates for China. We find other suppliers or alternative products. China has permanent loss of market share.

Congratulations. You made a good case in support of Trump.

J

[revo]

Congratulations. You made a good case in support of Trump.

J

LOL, what? Tell most Americans taking a $1,000 annual hit to their pocketbook in support of a deranged madman is in their best interests, when most are living paycheck to paycheck and can't make ends meet. Jeez, most Trumpies don't have two nickels to scratch together, but hey, let's pay an extra $1,000 of money they don't have so that trade is fair with India! Bwahahaha. Most Americans didn't even know there was a trade issue (and there isn't) at all before Dopey strolled along. And what happened to the savings for Americans because of the tax cut? You were crowing about that, and now say a $1,000 hit is OK? Brainwashed guppies.


And speaking about Trade World War I, it came out today that Dopey was thinking about putting tariffs on Australia, just because why not, mate!

And furthermore, economists now believe that thanks to Dopey's Trade World War, there's now a 60% chance of a recession in 2020. Morgan Stanley issued a report today that they expect a recession to hit within the next 8-12 months.

Good job, Dopey!

[In the Corn]

Hopefully Congress will start to rein in Trump on the tariffs.

Here's a real good article about how the Executive Branch has been in charge of trade and tariffs since the Depression. https://foreignpolicy.com/2019/05/04...tariffs-trump/

The article also points out that some in the Legislative Branch are drafting a bill to rein in Trump.

This year, Republican Sen. Pat Toomey of Pennsylvania and Democratic Sen. Mark Warner of Virginia introduced a bill that would require congressional approval before such tariffs could take effect. The bill also more tightly defines “national security” under the statute and transfers authority for the national security investigation from the Commerce Department to the Defense Department. This is a good way to claw back some constitutional authority to Congress without recreating the rigid process of tariff-by-tariff votes that led to the passage of Smoot-Hawley.

And 1J, seriously do you think that most families can afford $1,000 in additional spending from their household budget? That will pinch a lot of people. A family with $33,000 in income will be adding 3% in needed spending to meet last year's expenses. A family with $50,000 in household income will be adding 2% in needed spending.

So much for trying to save, but that's a tomorrow problem. :sigh:

[revo]

Hopefully Congress will start to rein in Trump on the tariffs.

Unfortunately, Congress doesn't have authority over them as they have ceded this power over the course of a century. I don't think they ever believed a madman would be in the White House!