I don’t disagree with you in principle. But in practice, at 145%, I don’t see how this wouldn’t turn into an extremely disruptive event for the importing company.
Let’s say, for the sake of argument, that the profit margin on Chinese product A is 150%. Even if, in theory, the whole tariff can be supported by the company, that would be very unlikely to happen, as the YOY results would kill its numbers, leading to lower guidance, falling share prices etc. The more likely scenario is that at least a part of that will be passed on downstream and will eventually lead to higher prices for the consumer.
There are probably US importers out there that got used to making like bandits on cheap Chinese imports topped off with huge profit margins, but how big would those have to be for the company to be able to absorb the impact? 300%? 500%? And even if they’re able, the temptation of passing some of the cost downstream is going to be there. After all, they have the perfect excuse.
As for the Chinese e-commerce giants (AliBaba, Temu etc.) , they don’t even bother, the full tariff costs are applied to the purchase for every US order. So let’s not include those.
Now, I can see you have an above average understanding of economy. Do you disagree with the above? I have been arguing your points in good faith, I hope you’ll offer me the same courtesy.
145% tariff is effectively a trade embargo. The only good that will be imported are of strategic nature… Ie medical supplies.
People will have either substitute or out right forgo consumers goods.
As I noted above I dont even disagree that end customer will eat part of the cost. My thesis is that we got brain dead normies running around repeating the cropotate thesis:
it’s a tax once consumer, make daddy trump stop hurt me the consumer
When the nuance is brought to light, the normie has a melt down. You can check my comment history. this ain’t the first thread.
I don’t under why modal Lemmy is so opposed to the concept that this will hurt corpos profits first.
Let’s imagine that it does hurt corporate profits first. Will they survive? Probably the big ones, might be a bit harder for little ones. So the world keeps turning, right? But like you said the end customer will eat some of the costs, so we agree that prices will go up in the end.
Where’s the upside? More money funneled into the government? Paid by the increased prices for the consumer, or some dips in corporate profits?
I’m not sure that’s a win for the consumer normies.
I don’t disagree with you in principle. But in practice, at 145%, I don’t see how this wouldn’t turn into an extremely disruptive event for the importing company.
Let’s say, for the sake of argument, that the profit margin on Chinese product A is 150%. Even if, in theory, the whole tariff can be supported by the company, that would be very unlikely to happen, as the YOY results would kill its numbers, leading to lower guidance, falling share prices etc. The more likely scenario is that at least a part of that will be passed on downstream and will eventually lead to higher prices for the consumer.
There are probably US importers out there that got used to making like bandits on cheap Chinese imports topped off with huge profit margins, but how big would those have to be for the company to be able to absorb the impact? 300%? 500%? And even if they’re able, the temptation of passing some of the cost downstream is going to be there. After all, they have the perfect excuse.
As for the Chinese e-commerce giants (AliBaba, Temu etc.) , they don’t even bother, the full tariff costs are applied to the purchase for every US order. So let’s not include those.
Now, I can see you have an above average understanding of economy. Do you disagree with the above? I have been arguing your points in good faith, I hope you’ll offer me the same courtesy.
145% tariff is effectively a trade embargo. The only good that will be imported are of strategic nature… Ie medical supplies.
People will have either substitute or out right forgo consumers goods.
As I noted above I dont even disagree that end customer will eat part of the cost. My thesis is that we got brain dead normies running around repeating the cropotate thesis:
When the nuance is brought to light, the normie has a melt down. You can check my comment history. this ain’t the first thread.
I don’t under why modal Lemmy is so opposed to the concept that this will hurt corpos profits first.
Let’s imagine that it does hurt corporate profits first. Will they survive? Probably the big ones, might be a bit harder for little ones. So the world keeps turning, right? But like you said the end customer will eat some of the costs, so we agree that prices will go up in the end.
Where’s the upside? More money funneled into the government? Paid by the increased prices for the consumer, or some dips in corporate profits?
I’m not sure that’s a win for the
consumernormies.