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Non-political tariffs thread


DixonHur

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Somewhere around 45% of US imports are of intermediate goods - components that go into end goods produced by US companies.  Out of the top countries from which the US imports intermediate goods, Canada is No. 1 and Mexico is No. 2.  While Mexican and Canadian companies might absorb some of the costs increases of the tariffs, much of the cost will be fronted, directly or indirectly, by US companies and their end users.

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24 minutes ago, Auto Driller said:

We basically had the wheels down for the soft landing. And now we decided to go full speed into a concrete wall like the jet in Korea.

Hmm, not so sure about that. Fed has already started rate cutting cycle. 

Rates have to be lower to rollover short term debt. Also, long term our economy needs inflation to address debt burden.

 

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2 hours ago, Guadaloopy said:

The tariff costs are ultimately passed to domestic consumers. 

This isn't true except in very limited circumstances. Here's what happens:

OCeWx.png.3694b17354160bfda1601f1622e78cff.pngin this chart the yellow portion is borne by consumers (they are paying p1), the purple portion is borne by producers (they are receiving p2), and the triangle to the right is the dead weight loss from sales that weren't made.

 

Quote

Tariffs MAY hurt foreign exporters by making their goods more expensive and reducing demand and lowering trade volumes.

There's no may about it. Quantity demanded is reduced except, again, in very limited circumstances.

Why, might you ask, are those circumstances limited? That's because if an increase in price (either due to supplier choice of the imposition of a tax) didn't reduce the quantity demanded, the supplier absolutely wasn't pricing as high as they could have. Now, while I'm not naive enough to think suppliers have priced their products for perfectly maximum profits, I do think most are in the ballpark. 

Just think about it. If you have 100 widgets to sell, and you can sell every single one of them priced at $100, or you can sell every single one of them priced at $125, you're pricing at $125. That's the only circumstance where the entirety of a 25% tax could be passed on.

Edited by elfenix
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All I wanna know is why our Clark Griswold scientists aren't spending every waking hour expanding the avocado ripeness window or developing a non-nutritive avocado varnish.

Also do avocados freeze and keep?

Also also, stay the fuck out of the avocado aisle today. I will hurt you.

Begun the Avocado Wars have.

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Yeah as I understand it, the tariffs cause a short term price spike, but they aren't too much money chasing too few goods inflation. 

Long run, if they last, they are really just a consumption tax and pull money out of the economy from domestic consumers. Which can be good or bad, depending on what you want the economy to do.  

If that revenue is used to fund tax cuts for the wealthy, it's a straight up reverse wealth tax. 

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6 minutes ago, shakahorn said:

How will this affect interest rates?  Savings accounts, while down a bit, are still over 4%.

Where should reasonably well-off investors (not 1% but up there) put their money?

In your mattress, obviously 

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4 minutes ago, gofuckyourself said:

All I wanna know is why our Clark Griswold scientists aren't spending every waking hour expanding the avocado ripeness window or developing a non-nutritive avocado varnish.

Also do avocados freeze and keep?

Also also, stay the fuck out of the avocado aisle today. I will hurt you.

Begun the Avocado Wars have.

Just in time for the Super Bowl

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Also, I think historically, tariffs have not been applied to consumer goods, per se, except in fairly narrow categories like EVs.

They have certainly been applied to raw materials and commodities that end up in consumer goods, metals, timber/lumber, wheat.

Across-the-board tariffs with major trading partners are pretty unprecedented, I believe.

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13 minutes ago, TwiceHorn said:

Also, I think historically, tariffs have not been applied to consumer goods, per se, except in fairly narrow categories like EVs.

They have certainly been applied to raw materials and commodities that end up in consumer goods, metals, timber/lumber, wheat.

Across-the-board tariffs with major trading partners are pretty unprecedented, I believe.

Yeah, across the board national tariffs haven't been a thing in our lifetimes.  My Grandfather did not think highly of Herbert Hoover, and I will leave it at that, because No CR. 

 

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2 minutes ago, Bateshorn said:

 My Grandfather did not think highly of Herbert Hoover, and I will leave it at that, because No CR. 

Ungrateful cur, that's the savior of Belgium, the Napoleon of Mercy!

Edited by YChang
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9 minutes ago, randomhorn said:

How quickly can Canada and Mexico find alternative, reliable trade partners for these goods? 

For Mexico, it's us or, well us.  

For Canada, they could conceivable attempt to make a deal with the EU. 

But if you don't think Xi Jinping isn't sliding into Trudeau's and Sheinbaum's DMs as we speak, I have some prime ocean front in AZ I'd like to show you. 

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Without mentioning the T word, what are the goals of these tariff policies?  What are we trying to accomplish?  What is the argument that tit for tat tariffs with Canada and Mexico are in someone's best interest?

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16 minutes ago, randomhorn said:

How quickly can Canada and Mexico find alternative, reliable trade partners for these goods? 

 

5 minutes ago, Bateshorn said:

For Mexico, it's us or, well us.  

For Canada, they could conceivable attempt to make a deal with the EU. 

But if you don't think Xi Jinping isn't sliding into Trudeau's and Sheinbaum's DMs as we speak, I have some prime ocean front in AZ I'd like to show you. 

It's like the business on "The Wire".  They can sell to the reliable buyers that have cash and pay up front.  We're turning into the Bubbles of the world where we may try to trade you a scrap radiator for your product.

Bubbles top the wire

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5 minutes ago, Goredho said:

Without mentioning the T word, what are the goals of these tariff policies?  What are we trying to accomplish?  What is the argument that tit for tat tariffs with Canada and Mexico are in someone's best interest?

From my understanding, they're ostensibly being imposed to curb illegal immigration and fentanyl smuggling. At least, that's one rationale I've read.

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4 minutes ago, Goredho said:

Without mentioning the T word, what are the goals of these tariff policies?  What are we trying to accomplish?  What is the argument that tit for tat tariffs with Canada and Mexico are in someone's best interest?

The answer would sound something like this.

image.png.47886e802db610e40afe4c6f12d72d79.png

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41 minutes ago, The Ace of Aces said:

The only winners in trade wars are corporations (who don't go bankrupt during them). Consumers lose, every time. 

Interesting point.  Are there any historical studies showing the impacts of tariffs on consolidation within industries?  IE do smaller companies fail at higher rates leading to increased oligopoly?

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4 hours ago, Bevo said:

Should have been titled the guacamole war. The tariffs will lead to retaliatory tariffs which will lead to negotiations.

46 minutes ago, Goredho said:

Without mentioning the T word, what are the goals of these tariff policies?  What are we trying to accomplish?  What is the argument that tit for tat tariffs with Canada and Mexico are in someone's best interest?

oxi-clean-but-wait-theres-more.gif

https://www.foxbusiness.com/politics/trump-reasserts-towering-100-tariff-threat-against-brics-countries

Quote

In an apparent bid to preserve the U.S. dollar's global economic dominance, President Donald Trump reiterated his 100% tariff threat against BRICS nations. The president is demanding that the countries commit to not form a BRICS currency or endorse a currency to supplant U.S. dollar hegemony.

"The idea that the BRICS Countries are trying to move away from the Dollar, while we stand by and watch, is OVER,"  Trump warned in a Truth Social post on Thursday.

Quote

BRICS is an acronym that refers to the nations of Brazil, Russia, India, China, and South Africa, though the bloc also includes several other countries as well.

"We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy," Trump continued "They can go find another sucker Nation. There is no chance that BRICS will replace the U.S. Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs, and goodbye to America!" he concluded.

I don't know how much trade we do with Brazil, India, and China, but 100% tariffs seems like it might be a little painful.

Seems like the economic fallout of 100% tariff against those three countries might affect American consumers a little more than 25% on avocados from Mexico.

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4 minutes ago, UTPhil2006 said:

Plenty of mortgage brokers on here 

Mortgage brokers and economists.  Surly has an abundance of talent, including a few here and there that came in through portal transfers.

 But just wait, the first Tesla vehicles that crashes without a driver in Austin is going to turn us all into personal injury lawyers.

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1 hour ago, Bateshorn said:

Also,  there's probably going to be a growing labor shortage in the real estate construction industry because of (No CR) reasons....

So we won’t be needing nearly as much lumber.  Sucks for you, Canada. 
 

and people that thought home ownership was going to get more affordable. 

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I don't understand the economics of it, but I'm assuming the US Dollar being the world's reserve currency is a big deal, so levying tariffs on BRICS countries in an effort to get them to back the dollar could make some sense.

But, putting tariffs on our close allies, and largest trading partners (Mexico and Canada) makes much less sense to me.

Edited by DixonHur
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1 hour ago, Bateshorn said:

Yeah as I understand it, the tariffs cause a short term price spike, but they aren't too much money chasing too few goods inflation. 

Long run, if they last, they are really just a consumption tax and pull money out of the economy from domestic consumers. Which can be good or bad, depending on what you want the economy to do.  

If that revenue is used to fund tax cuts for the wealthy, it's a straight up reverse wealth tax. 

Boy, it's a real mystery!

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