Any examples of Tariff's beginning to hit home?

[marko]

There are at least three results...

The first is that the increased costs from tariffs will be passed on to consumers. These costs will be substantial.

The second is that some domestic manufacturers may review where they manufacture if tariffs make them less competitive in domestic and foreign markets. Mexico, Thailand, Cambodia, etc. There are already examples of this.

The third is that there will be increasingly large subsidies required, demanded, and provided in parts of the agriculture sector.

Then again, we might find that all this gets resolved over the next few weeks and in a few months we forget it ever was a concern.

 

[Bir48die]

Most people have done a good job keeping this non political but in many ways you can see who falls on what side of this issue

 

[marko]

My economy has been affected. Tariffs cost me $700 more on a flooring project. And that was before the latest round. So yes I've seen and felt an impact. Somehow I dont think i will feel any better if the govt gives that money to farmers.

I must be missing something.

I can't seem to figure out how tariffs imposed a few days ago have already hit the retail market on products that have likely been landed here a month or so ago.

 

[target2019]

I must be missing something.

I can't seem to figure out how tariffs imposed a few days ago have already hit the retail market on products that have likely been landed here a month or so ago.

I am guessing that some are noticing a tariff effect from fees imposed over the last year, or whatever period that covers all tariffs imposed.

 

[Big_Hitter]

https://www.idahopress.com/news/loc...cle_9970d3ad-0d2d-5751-aa73-a0b895c29b2e.html

"Melanie Krause, founder of Cinder Wines in Garden City, is not sure where she is going to get glass for her wine bottles. The usual prices of Chinese bottles have jumped under a 10% retaliatory glass tariff, which has the entire wine industry turning to domestically sourced glass."

 

[Big_Hitter]

Sure thing that our farmers will be drastically affected by the tariffs, but for now they are being called " patriots" by our current administration.

we are borrowing money from china to pay our farmers not to sell food to china

make sense?

 

[Shredder]

I must be missing something.

I can't seem to figure out how tariffs imposed a few days ago have already hit the retail market on products that have likely been landed here a month or so ago.

Your right, you are missing something. I bought the flooring last dec. Notice I said BEFORE the lastest round. I paid a 10% higher price than if I purchased pre tariff.

While 10% may not seem like much, it does slow down other projects I have in the pipeline. For me, I'll just ride it out and not buy much unless it's really needed.

Talking with local housing contractors they said theyre no longer eating extra costs.

 

[Shredder]

we are borrowing money from china to pay our farmers not to sell food to china

make sense?

Is that China's next move? Stop buying our bonds?

 

[Nick12]

Planning to get contractor to do rehab on part of my home. Now with increase prices my contractor has to pay, then pass on the increased price tag to me, no thanks. No rehab until this tariff mess gets resolved.

 

[Big_Hitter]

Is that China's next move? Stop buying our bonds?

if they do rates could skyrocket

 

[MichaelB]

we are borrowing money from china to pay our farmers not to sell food to china

make sense?

WADR, this is silly. China has surplus capital because it suppresses domestic consumption. The Chinese have to export it - they cannot use it at home. The US is by far the best option for them.

 

[marko]

Your right, you are missing something. I bought the flooring last dec. Notice I said BEFORE the lastest round. I paid a 10% higher price than if I purchased pre tariff.

Ok. I thought that the original tariffs (when you bought in December) were in place for many years.

You're saying that there were no tariffs a year or so ago and there was a 10% increase around the time you bought in December. Now there's another 15% possibly coming. Is that it?

 

[skipro33]

Your right, you are missing something. I bought the flooring last dec. Notice I said BEFORE the lastest round. I paid a 10% higher price than if I purchased pre tariff.

While 10% may not seem like much, it does slow down other projects I have in the pipeline. For me, I'll just ride it out and not buy much unless it's really needed.

Talking with local housing contractors they said theyre no longer eating extra costs.

Assuming the new price quote got to shop around, even at 10% increase, the flooring was still cheaper than any other source than China?

 

[jetpack]

Since the retail markup is so high, even goods with a 25% tariff won't see a 25% jump in price. Maybe a 10% price jump in something already pretty cheap to begin with. Hopefully this will encourage more to buy USA goods. It's certainly not going to dent my wallet, as I buy few Chinese goods.

 

[cathy63]

Ok. I thought that the original tariffs (when you bought in December) were in place for many years.

You're saying that there were no tariffs a year or so ago and there was a 10% increase around the time you bought in December. Now there's another 15% possibly coming. Is that it?

Tariffs have been imposed in waves for over a year now. Here's the list of tariffs that were imposed in the middle of 2018. https://www.businessinsider.com/trump-china-tariff-full-list-of-goods-products-2018-6 These are in addition to the aluminum, steel and solar panel tariffs that were implemented earlier. I think the mid-2018 set are the ones that consumers are feeling the most now, though it's difficult for an individual to determine how much of any price increase is the result of a higher (or new) tariff vs everything else. It's easy for a contractor you're doing business with to say "tariff" but he doesn't really know if his cost of materials went up 10% solely due to tariffs, or if part of the increase was because his supplier has to pay warehouse workers more due to the tightening labor market, or if the price of fuel went up so transportation costs increased, etc.

 

[MichaelB]

Here’s a recent working paper from the NBER that provides a hard estimate of the cost to date of the tariffs. https://www.nber.org/papers/w25672.pdf

Overall, using standard economic methods, we find that the full incidence of the tariff falls on domestic consumers, with a reduction in U.S. real income of $1.4 billion per month by the end of 2018. We also see similar patterns for foreign countries who have retaliated against the U.S., which indicates that the trade war also reduced real income for other countries.

The FT this morning quotes one of the authors

Prof Weinstein said in an interview he estimated the administration’s decision to boost tariffs on $200bn of imports from China would increase the deadweight cost to $6.6bn a month, or $628 per household a year.

Keep in mind, these impacts are very short term, both exporters and importes will adapt and adjust, and the impact should decline as thy optimize.

 

[dvalley]

The whole 'buy American' sounds great until you realize you're paying $4000 for a Miller welding machine assembled in the US (with over 70% parts made in China and Mexico) vs. $950 for a Chinese welder that does the same thing. I don't see how this is good for the American consumer? If it wasn't for the Chinese products I wouldn't have been able to afford even 20% of what I own. It's the same argument that IKEA killed the American woodworking companies. Could it be that our labor costs are high because our standard of living is way higher than the other countries? May be we should leave the manufacturing and labor type work to those countries and focus on our strengths rather than artificially raising the cost of cheaper products to level set our own products costs? Isn't that like if the neighbor's kid is a better football player apply a handicap to level the rest of the playing field?

I buy metal for projects and it's certainly seen a jump in price. I can see how the industries (think RVs, buildings, auto, etc) that rely on metal are impacted by it and eventually the consumers are getting that cost passed on to them.

 

[kgtest]

Here’s a recent working paper from the NBER that provides a hard estimate of the cost to date of the tariffs. https://www.nber.org/papers/w25672.pdf

The FT this morning quotes one of the authors


Keep in mind, this impacts are very short term, both exporters and importes will adapt and adjust, and the impact should decline as thy optimize.

exactly their is this weaning effect that trickles down to dilute the actual hit to the consumer. Some businesses might just take a loss...some might push the increase of raw materials or good down to the consumer. My best weapon against this is to buy USA. Especially when it comes to big purchases like appliances, cars, furniture etc.

Someone needs to make an infographic timeline showing a visualization of how say a China tariff on a US Soybean effects consumer.

 

[kgtest]

I think part of this might be pushing and prodding businesses to rethink that foreign relationship. That might be a desired effect of the cause? Investing into US rather than paying a third party?

 

[Sunset]

I think part of this might be pushing and prodding businesses to rethink that foreign relationship. That might be a desired effect of the cause? Investing into US rather than paying a third party?

Easy, as long as the US consumer is willing to pay more for the same thing.

I've watched Shark tank a few times, and somebody pitching his widget will say it cost $1.25 to make, and the sharks say, we will get it manufactured and shipped from China for 25 cents.

Take wine bottles for example, can you imagine how cheap they must be for an Idaho wine company to buy them from China (including shipping) , as glass is heavy and breakable, yet so cheap compared to Mexico, they have been doing it.
https://www.idahopress.com/news/loc...cle_9970d3ad-0d2d-5751-aa73-a0b895c29b2e.html

 

[Big_Hitter]

WADR, this is silly. China has surplus capital because it suppresses domestic consumption. The Chinese have to export it - they cannot use it at home. The US is by far the best option for them.

silly but factual

 

[Nick12]

The whole 'buy American' sounds great until you realize you're paying $4000 for a Miller welding machine assembled in the US (with over 70% parts made in China and Mexico) vs. $950 for a Chinese welder that does the same thing. I don't see how this is good for the American consumer? If it wasn't for the Chinese products I wouldn't have been able to afford even 20% of what I own. It's the same argument that IKEA killed the American woodworking companies. Could it be that our labor costs are high because our standard of living is way higher than the other countries? May be we should leave the manufacturing and labor type work to those countries and focus on our strengths rather than artificially raising the cost of cheaper products to level set our own products costs? Isn't that like if the neighbor's kid is a better football player apply a handicap to level the rest of the playing field?

I buy metal for projects and it's certainly seen a jump in price. I can see how the industries (think RVs, buildings, auto, etc) that rely on metal are impacted by it and eventually the consumers are getting that cost passed on to them.

+1

 

[MichaelB]

silly but factual

Money has no identity. If we were to insist on assigning one here, it would be - we’re borrowing from China to pay for imports from China, and (some) of the tariff money collected from US importers is being used to aid US soybean farmers. They are not being incented or compensated for allowing their fields to remain fallow.

 

[pj.mask]

I’ve seen build quality on cars over the years and refuse to buy American because of it. When tariffs were discussed (a year ago) we accelerated our (typical 10 year) car purchase about 9 months. The other option with durable goods is wait a year or 2, most of the time it will be fine.

I’m fairly frugal and don’t buy much personally. If my $8 shirt at Costco goes up 25% I’ll still be ok. Kids products, we try not to buy from China due to questionable quality.

I think the people most impacted will be lower income who tend to buy from China because of cost. If they sell at a loss to capture the market it may drive US companies out of business but I doubt the ramp up time will be that big if costs go up. Wasn’t that the Middle East oil strategy? Good companies will always survive but this labor competition will in my opinion push us towards automation and not MFG jobs.

The thing is this is absolutely not a logic driven decision. First the ‘gov shouldn’t pick winners or losers’ and now we ‘need to support industries hurt by foreign competition’. Not sure the best use of our money is subsidizing inefficient farmers/companies.

 

[Koolau]

I purchase very few consumer goods. My phone (hopefully good for another 5 or 10 years) cost $15. So I don't see the tariffs affecting me much except as we attempt to insulate farmers (or others) from the effects - with possible higher taxes to cover those costs (or not.)

I'm at heart a free trader, but you have to have free trade on both sides. Without intending any political inference, it does seem that China has been taking advantage (breaking the free-trade rules) to gain advantage. I can't blame them since no one has objected until now.

Again, without implying political motives (on my part), I had an argument with a sweet lady I know. She thought the tariff "war" would end badly for the US. While there are always casualties in a war, I suggested that our adversary had more to lose than we do. We can grumble at higher prices for consumer goods at the store while they could eventually wail because they have no jobs. I could be wrong, I was once, so YMMV.