The tariffs announced today are going to hit American consumers in the wallet. Let's go through their likely effects in the short and long terms. First, let's consider the short term. A 10% minimum tariff on all imports will make imports more expensive, and the additional tariffs on some countries will make their goods very expensive indeed. Companies that sell imports or use imported inputs will have to choose: (1) keep their suppliers even with the higher costs (2) shift to suppliers in countries with the minimum tariffs (3) shift to American suppliers Not all companies can choose (2) or (3), since there aren't always alternatives that would offer a lower net cost. Whichever choice companies make, costs will rise. Then they have to decide: (4) eat the cost (5) make the suppliers eat the cost (6) pass the cost on to consumers Chances are they'll do some of each; it will depend how much bargaining power they have. Given these outcomes, American consumers will have to decide: (7) keep buying the same imports with higher prices (8) shift to imports from countries with lower tariffs (9) buy more expensive American substitutes Again, (8) and (9) won't always be possible. In the short term, Americans will face higher prices, whatever they choose, and they won't be able to buy as much stuff. But in the long term, American companies might consider building more production facilities in the United States. They'll have to decide: (10) tariffs will be temporary, so take no action (11) tariffs will last a long time, so invest in new production (12) tariffs will last a long time, but investing in new production is too costly The ones that choose (11) will face big upfront costs to create new capacity, and they'll pass some of these costs on to consumers in the form of higher prices. In the long term, doing (11) might help companies' profits, but labor costs in the United States will probably imply permanently higher prices for consumers as well. Basically, the new tariffs are designed to collect revenue and change Americans' spending and production patterns. But nothing comes for free. The extra dollars going to the Treasury have to come from somewhere. And if American companies just shift production to countries with lower tariffs, rather than making costly investments in factories at home, what will it all have been for? #tariffs #inflation #economy [Photo by The White House via Flickr]
Agree, this makes planning much more difficult for business, and for consumers we're already seeing a flood of "pre tariff pricing" promotions spiking sales numbers. Everyone knew this was coming and built some sort of plan for the short term. Longer term, we're in Act I. The U.S. market is just too big to walk away from. Lots of posturing for better trade deals going on. Yup, it will be bumpy for the next few months, lots of news stories to make political points. The real story will be how all this affects the consumer and what they actually face in purchasing, not what groups "project" they'll encounter. This is a major economic reset and the third or fourth "Made in the USA" push I've seen in my lifetime. I believe we need to give it a shot before we declare the sky HAS fallen.
They say he’s powerfull and brilliant and yet he presents to the world reciprocal tariffs on a small flexible billboard that looks like a PGA leaderboard 😂. Oh and they are not reciprocal they are kind of reciprocal…lol. I’m not making fun of him, I’m kind of doing it.
Nice One Donald Nice One Son Nice One Donald Let's Have Another One Yale University predicts that Trump's Tariffs will cost the average American household an extra $4,200 per month (inflationary items include groceries and consumables). In addition to shafting "Average Joe" corporate America will be negatively impacted over short and long term horizons, with significant drops in GDP. Nice One Donald Nice One Son, Let's Have Another One! It doesn't take a rocket scientist to workout that tariffs get passed ultimately to consumers - another blow to American citizens. For anyone interested here's the report: https://budgetlab.yale.edu/research/fiscal-economic-and-distributional-effects-20-broad-tariff
This is the kind of clarity the public needs. You broke it down like an economist and a consumer who’s felt it in the checkout line. The real kicker? Even if companies shift production back home, the cost of labor, infrastructure, and compliance in the U.S. means prices aren’t coming back down anytime soon. And if they don’t reshore? We’re just playing a very expensive game of supply chain musical chairs. Feels less like a strategy and more like a distraction. Thanks for spelling it out.
Daniel Altman The US has imposed a 26% tariff on Indian imports. How will this impact trade and the economy? Read more: https://wellreturns.com/trump-tariffs-us-imposes-26-on-indian-imports/
None of the following bode well for capital planning as businesses are now caught in the lurch of trying to guess what's next. Regardless, a contraction of imports from other countries will render these options meaningless. (10) tariffs will be temporary, so take no action (11) tariffs will last a long time, so invest in new production (12) tariffs will last a long time, but investing in new production is too costly
The rich will get richer and the working class will get poorer! Thanks to our oligarch, the great “Oompa Loompa”
Great insight ! Let's frame it differently to view the perspective from another angle. https://www.linkedin.com/posts/voiceofaa_impact-of-tariff-policy-on-global-trade-and-activity-7313478339296423937-gLu0?utm_source=share&utm_medium=member_android&rcm=ACoAAAkgfxoBA8hpfVAs6jlHM_orHfjlENmh7Ic
Very true. There may be a chance of taking access in other route too.
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19hGreat insights! 🔥 I’ve also put together an analysis on this—would love for you to check it out! Let’s discuss. 📊 💬 https://www.linkedin.com/feed/update/urn:li:activity:7313521702666158083