So the tariff thing

[bubbab]

If tariffs are so bad, how come the EU, Canada and other countries make it hard for us to sell our goods there but we let them off the hook here. And yet their economies are just fine. Why is it only good for them to do these things.

Unfortunately we have a president that is way in over his head; who does not give a shit about regular Americans; and is just so power hungry he just does whatever pops into that old mind of his. Voters for Trump are not going to get what they thought they were getting relating to the economy. They get their white supremacy prioirties, chaotic deportation polices with no due process, their racist priorities, but they are going to get hurt in the pocket book and at the grocery store and main street. Sick and sad. We need this nightmare to end sooner than later.

 

[Djac719]

I tend to agree with President Reagan. He had strong opinions on tariffs.

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Thanks for sharing this! I was looking articles to read on the topic so that I could get a good understanding about the impact of all of this. Thanks again.

 

[jay5020]

As a fiscal conservative yet social liberal and I work in the consumer products industry and import large amounts of goods from all over the world I can tell you a few truths.

Tariffs can be a good strategy to build long term growth and industry in our country. However, the US made a decision after WW2 to become a service industry and primarily move away from manufacturing (decision held by both Dems and Rep, no one party is to blame). Fact is labor is the driving force in product costs. Labor has always been cheaper overseas and continues to be now and will be in the future given the standard of living in the U.S.. What was supposed to happen was middle class america would rise up by getting an education and move away from manufacturing. The issue is education costs moved up as more people wanted/needed to go to school and middle america was pushed down unable to afford the education needed to succeed in the service/tec industries. Social classes moved farther apart instead of rising together. So here we are... Middle America wants change (I don't blame them and frankly I understand wanting to vote against "the norm" as they are no longer reaping the benefits of the manufacturing success we had before WW2. This created MAGA.....

So what does the tariff look like in reality? The math on a consumer product w/ 54% tariff (from China).
Example
MSRP of $26.99 costs 37% to make and import, after tariffs that product now has to sell for $29.99 to maintain same financials for retailer and manufacturer. That is a 12% increase (tax) on the product that goes directly to the consumer. Imagine how expensive your life would be w/ 12% tax increase on all products you buy and what that does to your spending habits and that is just one example.

So, the tariffs will bring jobs back to the U.S. but it will take decades (20+ yrs) and in the meantime these tariffs will be a gigantic tax on Americans. When the manufacturing comes back the costs will still be sky high based on what it costs to live in the U.S. You are trading low labor and high transportation for high labor and low transportation. The labor component is larger and therefore will not bring down prices in the future to where they sit pre-tariffs so life just got more expensive for everyone. It is an economic fact, there is no debate on the facts. Only thing that changes this is countries working together to agree on mutually beneficial trade (like NAFTA). We will see if this happens. But this is not going to be corrected in 4 years and no matter what this is bad for all Americans, especially middle class working Americans, for the foreseeable future. The levels of damage the tariffs will have on global trade and world economies could be enormous and could frankly lead to record job loss and inflation that could eventually throw the U.S. into another major depression.

It's economics.....

 

[-lowcountrydawg]

As a fiscal conservative yet social liberal and I work in the consumer products industry and import large amounts of goods from all over the world I can tell you a few truths.

Tariffs can be a good strategy to build long term growth and industry in our country. However, the US made a decision after WW2 to become a service industry and primarily move away from manufacturing (decision held by both Dems and Rep, no one party is to blame). Fact is labor is the driving force in product costs. Labor has always been cheaper overseas and continues to be now and will be in the future given the standard of living in the U.S.. What was supposed to happen was middle class america would rise up by getting an education and move away from manufacturing. The issue is education costs moved up as more people wanted/needed to go to school and middle america was pushed down unable to afford the education needed to succeed in the service/tec industries. Social classes moved farther apart instead of rising together. So here we are... Middle America wants change (I don't blame them and frankly I understand wanting to vote against "the norm" as they are no longer reaping the benefits of the manufacturing success we had before WW2. This created MAGA.....

So what does the tariff look like in reality? The math on a consumer product w/ 54% tariff (from China).
Example
MSRP of $26.99 costs 37% to make and import, after tariffs that product now has to sell for $29.99 to maintain same financials for retailer and manufacturer. That is a 12% increase (tax) on the product that goes directly to the consumer. Imagine how expensive your life would be w/ 12% tax increase on all products you buy and what that does to your spending habits and that is just one example.

So, the tariffs will bring jobs back to the U.S. but it will take decades (20+ yrs) and in the meantime these tariffs will be a gigantic tax on Americans. When the manufacturing comes back the costs will still be sky high based on what it costs to live in the U.S. You are trading low labor and high transportation for high labor and low transportation. The labor component is larger and therefore will not bring down prices in the future to where they sit pre-tariffs so life just got more expensive for everyone. It is an economic fact, there is no debate on the facts. Only thing that changes this is countries working together to agree on mutually beneficial trade (like NAFTA). We will see if this happens. But this is not going to be corrected in 4 years and no matter what this is bad for all Americans, especially middle class working Americans, for the foreseeable future. The levels of damage the tariffs will have on global trade and world economies could be enormous and could frankly lead to record job loss and inflation that could eventually throw the U.S. into another major depression.

It's economics.....

Agreed on all. I think you'll see reasonable tariffs negotiated on both sides....in exchange for commitments to onshore certain components or product lines. For example, it isn't economical for Apple to onshore iphones......so instead, they announced $500B investment to make servers here. I'm sure a level of tariff exemption or trading credits will come as part of that deal.

Making folks believe you are super crazy about unrealistically high tariffs makes you a better negotiator than coming right out and saying....hey we will cut a deal at a tariff rate that is much, much lower than what I just presented.

 

[KirbyIsMyDog]

Its possible. But go look at the list of companies investing billions in American manufacturing. The list is too long for me to type.

And why are the companies investing in semiconductor, batteries and electric vehicle manufacturing plants in the US? Hmm...

...Signed into law on August 9, 2022, the CHIPS and Science Act directs nearly $53 billion to “American semiconductor research, development, manufacturing, and workforce development...

 

[willdup]

If the announced tariffs stayed put, I think that's exactly what would happen. I don't think they will. This is a starting point for negotiation....an admittedly unrealistically high starting point, with questionable logic / calculation on how we get there.....but I guess it doesn't matter how it is calculated if you are just negotiating an unrealistically high number.

As a negotiating tactic, starting high and even being unpredictable / chaotic can be effective. I think he's taking too much risk in the way he is rolling these out. A panic selloff can lead to breaking things you didn't want to break.......that's a lot to risk if this is simply a way to negotiate.

If he truly is intent on keeping these tariffs in place for the pipe dream of effectively moving all manufacturing to the US......I will be standing with you Will with my get Trump pitchfork out. Because that would trigger a reallly bad economic situation. That won't happen.....but the market has to price at least a chance of that happening....and that is the risk in the way this has all rolled out.

As a commercial real estate dude, I'm digging the lower rates.....but not at the expense of the economy. The REITs are about flat....when typically they pop on this kind of interest rate drop.

In and of itself, I'm not bothered by the stock market taking a short term hit on tariff headlines.........so long as the ultimate destination is a good outcome in trade, and tariff certainty at a very reasonable level, where both the US and foreign partners can profit. If the ultimate destination on tariffs is where we are now........I have a big problem with it. As we all should.

The most reasurring commentary I've seen was from Mnuchin in his interview this morning. You can tell he knows these tariffs are not doable at this level. An unrealistically high starting point for negotiation.

I hope you are right, and I am wrong. I don't think that is the case here.

Trump has been far more consistent following through on his rhetoric than you give him credit for. His language about tariffs has been very consistent and it's clear he thinks they are some unexploited source of revenue with little or no downside that prior administrations were too dumb to access.

The administration has hinted that they would like to replace income tax with tariffs (essentially the US economy pre-1913). That would certainly be an unprecedented boon for the billionaire class at the expense of the middle and lower classes.

Regardless, I can tell you with first-hand knowledge that major corporations are making billion-dollar discissions under the assumption that these tariffs are the new reality. If they get whipsawed again, it better be for some very significant and tangible benefit, because businesses are currently dealing with massive disruptions to their plans.

 

[LRA Dawg]

Never have - did a write in vote on Trump v. Hillary, skipped this past election altogether.

I have never voted for Trump or Biden in their two elections, but I voted for someone. It's part of a citizen responsibility to make your voice heard, even if it is a minority opinion. I tried to get someone other than Trump nominated by voting in the primary.

 

[KidneyStoned]

If you didn’t vote then you have no say so on what either party is doing.

You didn’t vote but complaining??

Not surprised.

I have paid over $2 million dollars in taxes to the federal government in my career. So excuse me if I laugh at anyone who says I should not be allowed to complain about the government on a website because I skipped an election.

 

[-lowcountrydawg]

I hope you are right, and I am wrong. I don't think that is the case here.

Trump has been far more consistent following through on his rhetoric than you give him credit for. His language about tariffs has been very consistent and it's clear he thinks they are some unexploited source of revenue with little or no downside that prior administrations were too dumb to access.

The administration has hinted that they would like to replace income tax with tariffs (essentially the US economy pre-1913). That would certainly be an unprecedented boon for the billionaire class at the expense of the middle and lower classes.

Regardless, I can tell you with first-hand knowledge that major corporations are making billion-dollar discissions under the assumption that these tariffs are the new reality. If they get whipsawed again, it better be for some very significant and tangible benefit, because businesses are currently dealing with massive disruptions to their plans.

The market believes they will be negotiated down. If it didn’t, all the indexes would be down 35 percent. It is counterintuitive, but the ridiculously high level of tariff announced is probably a good signal that negotiations are forthcoming….,everyone knows these are unworkable. Especially Bessent. If they came out at 15 or 20 percent….i think the risk that they just stay put would be higher.

 

[Eastmandawg]

The market believes they will be negotiated down. If it didn’t, all the indexes would be down 35 percent. It is counterintuitive, but the ridiculously high level of tariff announced is probably a good signal that negotiations are forthcoming….,everyone knows these are unworkable. Especially Bessent. If they came out at 15 or 20 percent….i think the risk that they just stay put would be higher.

Just trying to get them to the table, thinks for the most part it works - China is a different animal.

 

[DTwnDawg]

That’s fair.

Most of my clients are manufacturers and I’ve been worried about these tariffs since Trump started banging that drum. If he is as serious about them as it seems, it’s going to make for a very tough economy.


it’s very difficult to calculate given how the tariffs are being implemented, but early estimates are that this will be 10x what he implemented in his first term.


It’s inexplicable to such a degree that it leads to a conclusion of either rank stupidity or a very intentional effort to slam the breaks on the global economy and throw us into recession. As to why they would want to do that? I’ll leave that to others to decide for themselves.

lol..you have time for clients? You spend all day on here

 

[-lowcountrydawg]

Just trying to get them to the table, thinks for the most part it works - China is a different animal.

China is long term focused and tough but no way they eat a 50 percent tariff. They will negotiate.

 

[Eastmandawg]

China is long term focused and tough but no way they eat a 50 percent tariff. They will negotiate.

India wants some of that business that they supply. Maybe they eventually will fall in line-hopeful but doubtful.

For now, would be pleased if everyone goes to zero.

 

[OriginalGatorHator]

The American economy was built on McKinley tariffs.

free trade hollowed it out and it’s the millennials and the zoomers who are facing the consequences

 

[willdup]

The market believes they will be negotiated down. If it didn’t, all the indexes would be down 35 percent. It is counterintuitive, but the ridiculously high level of tariff announced is probably a good signal that negotiations are forthcoming….,everyone knows these are unworkable. Especially Bessent. If they came out at 15 or 20 percent….i think the risk that they just stay put would be higher.

Our long-term allies and trading partners are not making the same assumptions. Even if Trump does back down and roll back these tariffs, his stance on this, annexation of Canada and Greenland and inexplicable realignment on Ukraine has caused irreparable damage. Trust is broken, and it may take a generation to rebuild it.



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[Athens is Heaven]

Our long-term allies and trading partners are not making the same assumptions. Even if Trump does back down and roll back these tariffs, his stance on this, annexation of Canada and Greenland and inexplicable realignment on Ukraine has caused irreparable damage. Trust is broken, and it may take a generation to rebuild it.

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Damn globalization! MAGA. America first.

 

[willdup]

Damn globalization! MAGA. America first.

If you think that we will be more prosperous in isolation instead of leading the global economy, you are in for a very rude awakening.

This is the third time in our history (1828 and 1930) that we have implemented such a radical and aggressive tariff program and the first two times it contributed to a depression. Maybe it will somehow be different this time, but given how the global economy is far more interconnected now than at any other time in history, the odds are that this is going to absolutely pummel our economy.

 

[jay5020]

If you think that we will be more prosperous in isolation instead of leading the global economy, you are in for a very rude awakening.

This is the third time in our history (1828 and 1930) that we have implemented such a radical and aggressive tariff program and the first two times it contributed to a depression. Maybe it will somehow be different this time, but given how the global economy is far more interconnected now than at any other time in history, the odds are that this is going to absolutely pummel our economy.

Isn't it Einstein that said, "the definition of stupidity is to do the same thing over and over again and expecting different results" - something like that....

 

[willdup]

Isn't it Einstein that said, "the definition of stupidity is to do the same thing over and over again and expecting different results" - something like that....

The guy who shared this said that it only happens every 100 years because everyone who experienced the last disaster has to be dead before we are dumb enough to do it again.

 

[jay5020]

Our long-term allies and trading partners are not making the same assumptions. Even if Trump does back down and roll back these tariffs, his stance on this, annexation of Canada and Greenland and inexplicable realignment on Ukraine has caused irreparable damage. Trust is broken, and it may take a generation to rebuild it.

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The administration's breaking w/ Europe on NATO responsibilities, Greenland and Ukraine is just plain irresponsible and advantageous to Russia and China for stability in Europe and in Asia.

 

[-lowcountrydawg]

Our long-term allies and trading partners are not making the same assumptions. Even if Trump does back down and roll back these tariffs, his stance on this, annexation of Canada and Greenland and inexplicable realignment on Ukraine has caused irreparable damage. Trust is broken, and it may take a generation to rebuild it.

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Meh - not a fan of his tariff rollout but let’s let it play out prior to making generational damage predictions. The guy was prez before and our allies are still our allies. Everyone angles for the best deal they can get, and words / tough speeches are a part of that. This will play out the next few weeks. In the meantime don’t be surprised if we see some signaling to the market that the resolution will be better than feared.

 

[magnolia93ugagrad]

like when a patient gets operated on 🤦🏼‍♀️🤦🏼‍♀️🤦🏼‍♀️🤦🏼‍♀️

 

[KirbyIsMyDog]

Meh - not a fan of his tariff rollout but let’s let it play out prior to making generational damage predictions. The guy was prez before and our allies are still our allies. Everyone angles for the best deal they can get, and words / tough speeches are a part of that. This will play out the next few weeks. In the meantime don’t be surprised if we see some signaling to the market that the resolution will be better than feared.

‘Our allies are still our allies’ - who would that be? Russia and North Korea? Because everyone else hates the US now

 

[-lowcountrydawg]

‘Our allies are still our allies’ - who would that be? Russia and North Korea? Because everyone else hates the US now

The leaders of UK, Israel, and even France would disagree. As their visits last month showed.

You can’t afford to publicly “hate” the US policy wise. Trump pisses folks off in a way that no one else has. But it doesn’t change that fact.

Look for the UK to be the first mover in tariff / trade deal in the next week or two.

 

[KirbyIsMyDog]

Do you think t-shirt manufacturing is the target industry, or do you only post straw men?

If we don’t restore some critical industries then we are at the mercy of other countries. The drive towards deglobalization has been consistently increased by every administration since the wall fell. COVID just increased the pace.

Beats running a deficit that foreign countries use to buy our real estate, farmland and stock ownership in US countries. We are giving away US assets and their future benefit streams. It has to stop.

You were saying…

 

[Eastmandawg]

You were saying…

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One thing that I don’t agree with.

I mean, how long does it take, who over here would want in a factory and how much do prices go up. Pretty dang sure that prices would jump.

Understand the tariff motives, but it needs to be more targeted or selective rather than just saying all.

 

[Lady43]

If tariffs are so bad, how come the EU, Canada and other countries make it hard for us to sell our goods there but we let them off the hook here. And yet their economies are just fine. Why is it only good for them to do these things.

Just look at what the tarrifs other countries charge thr USA

 

[KirbyIsMyDog]

Just look at what the tarrifs other countries charge thr USA

You seem to know a lot about trade. What exactly are the tariff rates for US exports at our, say, top 5 export markets?

 

[Dillenger1914]

I have no idea if the tariffs will work or not. The experts says they will cause damage in the long term. I do, however, believe that President Trump has the right to try what he believes will work. He won the election and it's still within his 100 days. I wish he would work with Congress, but that goes against what he sees himself as.