Any examples of Tariff's beginning to hit home?

[marko]

When the initial tariffs were put in place we had gotten a quote to have metal fencing installed. After installation the landscaper mentioned that the cost of the fencing had significantly increased due to the tariff and he hadn’t realized it so basically ate the cost of the increase in his labor.

I'm confused.

My impression is that the US tariffs began just a few days ago and the Chinese tariffs won't be seen for two or three weeks from now. Anything already in-country wouldn't be affected by recent tariffs as they're already here.

As so often happens, am I misinformed?

 

[MichaelB]

OK another interesting question....who is exactly paying the bill when we import these goods. Seriously, does the manifest say (tariff charge 25%?). Lets assume the US buyers pays this.....so where is all this new tariff tax money going? Any accounting for that....it must be large?

The importer pays the tax, and the money goes to the US Treasury.

 

[MichaelB]

I'm confused.

My impression is that the US tariffs began just a few days ago and the Chinese tariffs won't be seen for two or three weeks from now. Anything already in-country wouldn't be affected by recent tariffs as they're already here.

As so often happens, am I misinformed?

It is very difficult break down component changes in retail prices. No doubt now we’ll be hearing / reading endless claims of tariff impacts, but they will be impossible to prove. The same is likely to happen with negative profit announcements by CEOs - blame the tariffs.

 

[joeea]

OK another interesting question....who is exactly paying the bill when we import these goods. Seriously, does the manifest say (tariff charge 25%?). Lets assume the US buyers pays this.....so where is all this new tariff tax money going? Any accounting for that....it must be large?

Technically, the tariffs are paid by the importers.

But as for who eventually foots the bill - it depends who you believe.

If you believe the President, "The Tariffs paid to the USA have had little impact on product cost, mostly borne by China".

If you believe Chad Brown, senior fellow at the Peterson Institute for International Economics, "The economic evidence to date on this is exactly the opposite of Trump’s statement. The impact of the 2018 tariffs has been passed on to US consumers in the form of higher prices. China is NOT bearing the burden of Trump’s tariffs."

If you believe Michael Klein, professor of international economic affairs at Tufts University and founder of the nonpartisan economics publication Econofact, "It’s like saying, 'I put a sales tax on producers, isn’t this great we’re getting all this money? And then consumers say, 'Wait, that’s from my wallet.'"

I know who I believe.

(Even Trump economic adviser Larry Kudlow admits "both sides will pay".)

 

[joeea]

I'm confused.

My impression is that the US tariffs began just a few days ago

As so often happens, am I misinformed?

The tariffs increased a few days ago. They were already in place at a lower level.

 

[joeea]

The hurt isn't going to be this tariff war, the hurt has been on us for a long time due to huge trade deficit between US and China.

Who is hurt from having less expensive products to purchase?
Who benefits?

 

[Markola]

The hurt isn't going to be this tariff war, the hurt has been on us for a long time due to huge trade deficit between US and China. The can has been kicked down the road until now. In 2018 China imports totaled almost $540 Billion compared to $120 Billion of US exports. The US exports have always been subjected to tariffs in China with almost none on Chinese imports. In an attempt to negotiate those Chinese tariffs, the current administration realized we have nothing to bargain with, so tariffs were introduced. The ultimate goal is to eliminate tariffs altogether, but first we have to have something to bargain with.

Except it’s not clear to economists if our trade deficit is harmful or beneficial to the U.S. From an Investopedia article:

“KEY TAKEWAYS
Economic theory suggests that persistent trade deficits will be detrimental to a nation's economic outlook by negatively impacting employment, growth and devaluing its currency.

The United States, as the world's largest deficit nation, has consistently proven these theories wrong. This may be due to the special status of the United States as the world's largest economy and the dollar as the world reserve currency.

Smaller countries certainly have experienced the negative effects that trade deficits can bring over time. Proponents of free markets, however, insist that any negative effects of trade deficits will correct themselves over time through exchange rate adjustments and through competition leading to a change in what a country produces.

Large trade deficits may simply reflect consumer preferences and may not really matter much at all in the long run. Time will tell.”

https://www.investopedia.com/articles/investing/051515/pros-cons-trade-deficit.asp

In the mean time as we conduct our questionable trade war, the market goes to work as traders figure out where to buy substitutes from countries with fewer or no tariffs.

 

[skipro33]

When the initial tariffs were put in place we had gotten a quote to have metal fencing installed. After installation the landscaper mentioned that the cost of the fencing had significantly increased due to the tariff and he hadn’t realized it so basically ate the cost of the increase in his labor.

The initial tariffs were 10% on about $200B of a $540B imbalance in trade between the nations. If your contractor is complaining that there was a 10% increase in the materials he used on your job and that it was significant, then perhaps his supplier was gouging him.

 

[skipro33]

Who is hurt from having less expensive products to purchase?
Who benefits?

Except it’s not clear to economists if our trade deficit is harmful or beneficial to the U.S.

Maybe not to economists, but there's a lot more involved. I'd say the fact that dumping of cheap goods, steel for example, has harmed our steel industry and that the first round of tariffs has started turning that around.

China is willing to sell under market, at a loss, in order to capture the market. After which, they'll set what ever prices they want and it would be a while before we regain our independence.

Solar for example; China sells panels for less than they cost to make in order to drive out US built solar panels. When the US company goes under, they drive their prices back up.

And let's not forget that China hacked into our federal government's computer system back about 4 years or so ago. Or that they continuously attempt hacks into our electrical grid. I worked for an electrical utility company. It is a daily battle to keep them off our grid.

Then there's their labor force; underpaid and underage in many cases. Buying Chinese made over American made promotes that.

China is NOT our friend folks. They don't sell us cheap goods because they want to be nice to us. They want to own us and from what I can see, they will with the debt we are accumulating. I want especially point out that this trade deficit isn't economically driven, it's politically driven by the Chinese government. If it were just simple economics; one business beating out another, that would be one thing, but it's not. This is about the Chinese government working at becoming more powerful and our current administration acknowledging and acting on that.

 

[joeea]

the first round of tariffs has started turning that around.

Any evidence of that?

And let's not forget that China hacked into our federal government's computer system back about 4 years or so ago. Or that they continuously attempt hacks into our electrical grid. I worked for an electrical utility company. It is a daily battle to keep them off our grid.

Can you explain how tariffs will help that?

 

[brett]

I believe that there should be no doubt about this entire mess not withstanding the bravado from some quarters. 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.

 

[Nick12]

We've heard the warning signs all along but did not hit home until now

"We're going to be tough on trade"

 

[Winemaker]

The true way to beat tariffs in the US, is to buy US made goods. Like Skipro33 said in post#33, China sells a lot of goods at or below their cost. They also manipulate their currency to make it cheaper. But I do realize many products aren't made in the US anymore, and you can't substitute.

The other elephant in the room is technology theft. While I can only speak for the mining industry, when I frequented Mining Trade shows years ago, I could hardly get a great glimpse of any mining machinery on display without Chinese photographers, literally taking pictures of every square inch of the machine. Some photographers had assistants exchanging rolls of film with them every few minutes. (Now that dates how long they've been doing it.) These phots were used to reverse engineer a lot of products.

 

[tb001]

The initial tariffs were 10% on about $200B of a $540B imbalance in trade between the nations. If your contractor is complaining that there was a 10% increase in the materials he used on your job and that it was significant, then perhaps his supplier was gouging him.

Perhaps. I think as likely he was already operating on thin margins for the job and hadn't counted on the extra materials cost.

ETA, was simply posting this as an example of something we had experienced as a result of the tariffs as the OP asked.

 

[GravitySucks]

I have a question:
Why do reporters say Tarrifs will cost American consumers X amount, but when corporate taxes are decreased they don't say the tax cuts will save Americans X$?
Guess my question is why do Tarrifs taxes affect final prices differently than any other tax?

 

[Midpack]

China is NOT our friend folks. They don't sell us cheap goods because they want to be nice to us. They want to own us and from what I can see, they will with the debt we are accumulating. I want especially point out that this trade deficit isn't economically driven, it's politically driven by the Chinese government. If it were just simple economics; one business beating out another, that would be one thing, but it's not. This is about the Chinese government working at becoming more powerful and our current administration acknowledging and acting on that.

Maybe not what was intended here, but was it OK with us (USA) when we ran a trade surplus with the world from post WWII thru 1975, a period of great prosperity for the USA? It was “friendly” when the shoe was on the other foot?

Selling under cost to gain market share isn’t new, the Vanderbilt fortune began that way.

And the US subsidizes industries, many for years such as farming, oil, exports, etc. It’s OK when we do it but not for China? https://www.thebalance.com/government-subsidies-definition-farm-oil-export-etc-3305788

China is not globally competitive due solely to government subsidies.

 

[travelover]

How you view it all depends on your tribal affiliation. It is a complex, multifaceted issue with multiple uncertainties. If you are onboard, you see all the positive aspects and doubt the negative ones. If you are not onboard, it is the opposite.

 

[joeea]

Why do reporters say Tarrifs will cost American consumers X amount, but when corporate taxes are decreased they don't say the tax cuts will save Americans X$?

Why?

Because there is plenty of evidence that the increased costs due to tariffs have been passed on to consumers.

And there's little to no evidence that corporate tax cuts results in lower retail costs.

 

[Markola]

Maybe not to economists, but there's a lot more involved. I'd say the fact that dumping of cheap goods, steel for example, has harmed our steel industry and that the first round of tariffs has started turning that around.

China is willing to sell under market, at a loss, in order to capture the market. After which, they'll set what ever prices they want and it would be a while before we regain our independence.

Solar for example; China sells panels for less than they cost to make in order to drive out US built solar panels. When the US company goes under, they drive their prices back up.

And let's not forget that China hacked into our federal government's computer system back about 4 years or so ago. Or that they continuously attempt hacks into our electrical grid. I worked for an electrical utility company. It is a daily battle to keep them off our grid.

Then there's their labor force; underpaid and underage in many cases. Buying Chinese made over American made promotes that.

China is NOT our friend folks. They don't sell us cheap goods because they want to be nice to us. They want to own us and from what I can see, they will with the debt we are accumulating. I want especially point out that this trade deficit isn't economically driven, it's politically driven by the Chinese government. If it were just simple economics; one business beating out another, that would be one thing, but it's not. This is about the Chinese government working at becoming more powerful and our current administration acknowledging and acting on that.

I choose to listen to the economists.

 

[easysurfer]

...
China is NOT our friend folks. They don't sell us cheap goods because they want to be nice to us. They want to own us and from what I can see, they will with the debt we are accumulating....

Brings back feeling of deja vu for me in the 80's at megacorp when there was this big departmental presentation held in an auditorium. The theme was Japan is killing us, eating our lunch. Theme was to buy American.
But yet at the same time so many folks, even today have the thirst for Japanese made cars. Bottom line for some, let others be patriotic but my family wants the best, reliable car.

Can't have things both ways. On one hand, China is the bad buys on the other, continue the thirst for inexpensive products.

 

[GravitySucks]

^^^ and at the same time the big 3 were telling us it was our patriotic duty to support our neighbours and buy American they were sending the plant and jobs to Mexico.
Patriotism (jingoism) is the refuge of the scoundrel.

 

[kcowan]

IIRC, the tariffs are going from 10% to 25% on some items...so it's not a 25% increase, more like 15%.

Anecdotes from the industry say the 10% is easy to work around but 25% means changes.

 

[kcowan]

That's not what the soybean farmers are saying these days. The Chinese have already found other sources of soybeans and wheat. They may never need to purchase US soybeans again.

And Canadian canola products.

 

[Nick12]

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

 

[Shredder]

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.