It is some 5.5 months since Trump announced his tariffs, and they have changed countless times since then. I’ve consistently heard folk proclaiming the disaster that would result in terms of higher prices, businesses closing, inflation, etc. But I’m not clear what clear negative effects have occurred yet. I just recently heard a bit on NPR where they were talking about the difficulties one manufacturer faced due to uncertainty. I don’t buy a lot, but I’m not aware of prices having gone through the roof. And the stock market seems to be booming. (In fact, my impression is that the money-folk LOVE the volatility.)
So, is it too early to see the negative effects? Or is a reason they are not as negative as many have suggested? On the flip side, is there a positive effect?
Apologies if this duplicates an ongoing thread, but I was not readily able to find such a thread.
I believe it’s too early to see any effects, as the tariffs only recently took effect for most countries. Note that this applies only to new international deliveries, and a significant amount of per-tariff stock remains available. My concern is that retailers may take advantage of this and raise prices now, even before they see any increase in their costs. It’s the perfect excuse for them to do so.
Thanks. That is the sort of thing I was looking for. The article seems a tad unclear, tho. The headline mentions an $800 tariff hit, but the article states only:
The Dearborn, Mich., company reported a net loss of $36 million, stemming from “special charges related to a field service action and expenses related to a previously announced cancellation of an electric vehicle program.”
Costs related to tariffs will run the company about $2 billion in annual earnings.
So, if their overall loss was only $36 million, why do they refer to some vague (to me) “special charges” rather than the $800 million from tariffs?
Moreover, Ford stock price was $10.15 on 4/2, and $11.97 today.
Paul Krugman talked about this on his Substack earlier this month:
It shows a graph of the Import Price Index (calculated on pre-tariff prices of imports) rising rather than falling. The Trump administration maintained that importers would prefer to lower their prices rather than lose market share, but at least some of the import basket is increasing prices, and the net is an overall increase, perhaps because monopoly suppliers are using this as an opportunity to increase their price points and hence their profits.
There’s also a graph of the Institute for Supply Management’s purchasing manager survey index rising, which based on past performance seems to prefigure a rise in inflation. And finally, there’s a graph of the GDP growth rate decreasing significantly in the first half of the year, which points to stagnation - the other element of stagflation, where a weak economy nevertheless has significant price increases.
When the tariffs started, the world lost about 10 trillion in global capital due to stock market effects. However I think most of this has been regained.
Mangos are much, much cheaper than usual right now.
Most of the mango crop here is usually exported. I don’t think they used to go to the U.S., but something in the entire international mango trade has shifted as a result of the tariffs, and local mango growers are being forced to dump their produce in the domestic market. So things are bad for the Israeli mango growing industry, I guess, but I personally have been eating yummy yummy mangos by the bushel.
Food prices are up here. Several items I ordered will now not be shipped, see Chad_Sudan’s link. I know of several small businesses that are facing closure for the same reason. I’ll @JaneDoe42 in case she wants to tell her story about that.
I think the new rules on these small packages is going to be the most obvious effect, even if it might not be the biggest effect, in terms of dollars. Millions of Americans are about to find out they either can’t buy this stuff any more, or that it’s going to be a lot more expensive, with courier fees instead of postage, and the tariffs on top of that.
It might be difficult for a lot of people to connect higher prices in stores with tariffs, but when you’re holding a bill telling you to pay an extra $200, it’s a lot harder to not understand that you’re being screwed by these new rules.
I do fancypants needlepoint. I started doing it in the lat 1960’s and have watched an entire cottage industry grow. Specialty threads and fibers were developed and tools were required.
I couldn’t have done this piece in the 1980’s, the threads and techniques didn’t exist.
Most folks start doing needlework with DMC thread. Last year it was 79 cents a skein. This year it is at least 3.69 a skein. That is for the low-cost, entry level thread. So much for new stitchers.
DMC is made in France. The best wool is raised in Australia and Turkey, then sold to other countries for processing, which means that the tarrifs on it consider which countries have touched it and charge the highest.
Needles come from Switzerland and scissors come from Germany. Canvas comes from Canada.
Needlepoint shops don’t make bank, they are usually lucky to be staying afloat. They can’t pay at least 30% more for stock and they will be having a hard time selling it. Because they were small businesses, they could sometimes get by with small (under $800) orders, but that’s gone away too.
Countries aren’t shipping to the US anymore so availability is going to be worse.
There are many talented folks who make their livings by designing patterns and teaching classes. I’ve spoken to two of them who both say they are probably going to have to stop their lives work in their mid 50’s and find “real” jobs because they are already having problems getting orders filled.
When the manufacturers stop getting orders, they will retool to make something else or go under themselves.
I am watching the collapse of half a century of progress and it is happening headspinningly fast. My heart is breaking, he’s breaking so many precious things and we won’t get them back.
In earnings calls and public statements, executives of many of America’s largest and most profitable grocery retailers are citing Trump’s tariffs as justification for passing on the costs to consumers.
I mentioned in another tariff thread my friend who runs a martial arts supply business, that mostly does mail orders. Well, this weekend, I heard about one order they shipped to the US, where the tariffs changed just after they shipped. What was a $150 order became about $300 after the tariffs, and the customer refused to take delivery. Apparently US customs offered to ship it back, if my friend paid the outstanding balance, but of course that was a ridiculous idea, paying a tariff to get your own product back.
So the package just kind of disappeared in some customs wearhouse.
I expect we’ll hear a lot more stories like that in the coming weeks, as the effects of eliminating the de minimus exception come home to roost.
If the product was being returned to the foreign shipper and not entering the U.S., why would the shipper have to pay a tariff to get it returned to them? That doesn’t make any sense.
