I don’t understand all the economics of it, but my understanding is there is a lag time of something like 6 weeks between when the tariffs started and when products hit the shelves.
Trump’s tariffs on China became absurd in the first 10 days of April (54% April 2nd, 154% April 10th), and I’ve heard we are going to start seeing the effects in the economy in May because that is when all the products that were never delivered will show up as shortages all through the economy.
I’ve even heard the health care sector will be badly affected because they will run out of supplies.
One ‘good’ thing about Trump’s idiocy is that with China and other countries refusing to buy our goods, some goods may go down in price. Like pork, maybe. But evenso, it’ll probably drive prices down so much that a lot of domestic producers of things like pork go bankrupt because they produce pork for the global marketplace but now domestic supply will outstrip domestic demand.
Basically some products that are produced for the Chinese market will not be able to sell in China, causing a massive surplus in the US resulting in lower prices, but also causing those businesses to go bankrupt, causing higher prices in a year or so.
US farmers are screwed. Not only are they going to permanently lose at least a significant portion of the Chinese market, they also have already lost all of what used to be the US AID market. And farmers will lose marginal items where there is a demand in China but not in the rest of the world such as chicken feet and horse tails (for Chinese opera costumes).
So ya, a lot of family farms, the bedrock of 'merica, will be going bust. In economic terms, translates into short term glut/lower prices in the US (and farmer profits go down) as well as long term price rises in the US (as farmers go bankrupt).
I think though that there is a strong tendency for merchants who discover there will be a rise in the cost of goods to pass it on to the retail price immediately, rather than waiting for it to ‘work its way’ through the supply chain?
My understanding of what happened is that since the tariffs went insane in early April two things have happened.
Lots of orders from China to the US were cancelled.
Orders from China arrived, but when the purchaser got a huge tariff bill from customs, they refused to pay it so now there are shipping containers full of stuff clogging the ports
Supposedly even if the tariffs disappeared tomorrow, there is still a 6 week lag time between when an order can be placed in China and when the items appear on shelves in the US. Also even if things got fixed tomorrow, the ports are still clogged and the volume of shipping from China to the US has declined dramatically. Also there is supposedly a risk that semi truck driver pay will drop dramatically due to lower demand, causing truck drivers to quit, which will end up driving prices later this year for semi truck drivers if/when demand outstrips supply.
My understanding is it could be as bad as covid was. But not all products will be affected equally. Some products will be totally unaffected by the tariffs, but manufactured goods from China will be hit hard.
I thought there was a demand for chicken feet in many European countries. My maternal grandmother was the first generation born in America. Her parents were from Russia/Poland/Romania/Ukraine we’re not really sure. For many years, my mother went to a butcher to get a big bag of chicken feet for her mom. Research through the years has shown that eating chicken feet was an ordirnary everyday thing in most European Jewish communities.
I always thought that people still living in those countries still ate them.
Only 16% of what we use is imported. Only 15% of food for example.
Some are, yes- we exported $41 Billion of food to China last year- Soybeans, then corn, and cotton. However, the China tariff on most foods is a mere 10%, China needs the food. We also export We also export beef and pork, but likely the US market can handle that.
Family farms dont grow soy, corn (except sweet corn) or cotton- those are mass factory farms. Most family farms now sell locally etc.
Yup. It’s the supply chain that will cause empty shelves initially even if the tariffs are never imposed. There’s already too many unknowns to keep up a regular supply now. If the tariffs actually start then the problem will be much worse.
As soon as folks get the full wind of this they’ll start hoarding. Stuff will get even scarcer..
There’s a part of me that wants to beat them to it.
It feels wrong.
But we gotta get brutal and think about our own good and what our family needs.
I feel terrible even thinking it.
I have lots of mouths to feed.
I get the impression food largely won’t be affected, which is good. The US doesn’t really import food from China. Toilet paper is mostly made domestically too FWIW.
I have no idea how bad electronics, manufactured goods, etc will be affected. My impression is a large part of what we import from China is manufactured goods and electronics. But its not just consumer products, its industrial products we import too.
The problem is even if companies get enough trust to start buying things again from China, which isn’t possible with a sociopathic dementia patient in the white house, it takes something like 6 weeks between placing an order for good and having the goods made, having them shipped across the pacific ocean, having them unloaded and delivered to warehouses, then having them delivered to stores and stocked on shelves.
I hope the medical industry isn’t affected too badly. Shortages in hospitals are going to cause serious problem.
Tariffs are applied at the port of arrival, based on the FOB value of the goods, at the time of arrival. Goods that were on vessels in US ports, but not yet unloaded/cleared incurred the tariff. If these were “ready for shelf” consumer goods, they could be available for retail sale inside a couple of weeks. Conversely if they are raw materials or componentry, for elaborate manufacture it might be several months before the impacted finished goods were available for sale.
Lead time for containerised freight from Chinese ports to US west coast is around 15 days. East coast maybe closer to 30 days. Add about 7 days for customs clearance (assuming the duty is paid) and the goods would be in US importer’s warehouse. Then add the distributors lead time.
US exports of soya and corn to China are going to feed pigs & poultry. No pigs, let alone humans, are going to stave because exports of US corn are limited.
Some make lists of the reputedly most beautiful words in the English language: dawn, hush, whisper, etc. So once I perversely tried to list the very ugliest words known to English. All I remember from it is the champion ugly word: stagflation.