Saturday, November 16, 2024

Tariffs are Bad for US Consumers - Here's Why



Donald Trump wants to "punish" China by putting a tariff on things imported from China.

The problem is that the tariff is not paid by China, but actually paid by the person importing the goods who then passes the cost on to the consumer.


Here are the details.

Tariffs were designed to protect US manufacturers from cheaper imports of similar items. They are intended to discourage trade by raising the cost of importing the items.

Here's an example stolen from You Tube, you have a tee-shirt printing business, and you want to buy blank tee-shirts to print on. China is a good source of inexpensive tee-shirts, so you order them from there. Let's say the price is $10 each. The Chinese manufacturer processes your order of 100 shirts and puts it on a cargo ship bound for the United States. So your initial cost is $1000.

One your boat comes in, to actually get your tee-shirts you have to cover the cost of any import tariff. Let's call it 10%. So your cost is now $1100 or $11 a shirt. What do you do? Raise your price. That shirt your were going to sell for $15 is now $17.


So what happens when some politician decides to "stick-it" to China by having a 100% tariff?

The theory is that it should hurt China because there's less trading with China (this could happen), but without a US manufacturer of blank tee-shirts you're forced to import them from somewhere. Your original $1000 order just turned into $2000 or $20 a shirt which you then sell said shirt for $25 to $30.

Who ultimately pays the price for the tariff? The US consumer. Tariffs raise consumer prices. This is how they were designed. They are both bad and good, but not good if you don't have a US manufacturer to protect.

We're also learning that this is also negatively affecting employees of import companies. The import companies are now buying up as much inventory as they can (before Trump takes power) which leaves no cash left over for any holiday bonuses.



Information source: ChatGPT



Saturday, November 09, 2024

A New Trump Presidency - What Now America?

 


So 51% of Americans have chosen Trump over Kamala Harris, which is a stunning choice.

What happens next is known only to him and I don't even think he knows what he'll do.

He has gotten his wish. To stay out of jail. His work is done and he may as well delegate the job of being president to others and go golfing. I think he liked to play at being president, but as anyone who has done the job or been near one, the job is very difficult and Mr T was never that interested in the details.


One factor is that he is 78, exhausted and showing signs of illness.

Also his disinhibition has grown dramatically, but he's always been one to blow smoke and he's encouraged to do so by the people around him.

 So is he serious about his campaign promises? Historically, not really, but he's in a vengeful space so we'll see what plays out.


He promised to 

  • jail his enemies
  • deport all the undocumented workers
  • put tariffs on any thing from China and other places
  • give a tax break to the wealthy
  • "take care of" women

Jail his enemies
One hopes he just talking out his ass as we do have laws here and it would be very difficult for him to up and arrest someone for no reason. We do need to watch out for this as that would be a doorway to fascism.

I, for one, am giving lots of money to the ACLU.

Deport all the undocumented workers
This is provably impossible. There are 11 to 12 million undocumented workers and U.S. Immigration and Customs Enforcement (ICE) employs approximately 22,000 personnel with only a portion dedicated to deportation with also 24,000 Border Patrol agents stationed along the southwest border. An actual deportation of a person is a multi-step process that involves many people. If he even mandates that this happen it will be bad news for a few thousand but the reality of the current process is highly limiting. Now this doesn't stop Steven Miller from chasing people across the border with an AR-15, but even that can only go so far.

There's another reality that never gets mentioned and we need to talk about it right now.
If all the undocumented farm workers go away, we will starve. This is hugely serious, and the repercussions are terrifying.


Put tariffs on any thing from China and other places
I'm hoping that Elon Musk explains to Trump what a horribly bad idea this is.
A tariff on imported goods just raises the price of that item. It is a sales tax on the buyer, not the seller. If people are unhappy about prices they really will be unhappy about paying even more for stuff.


Give a tax break to the wealthy
This will depend on who ends up with control of the house (still up in the air at the time of this writing.) The house controls the purse strings.


"Take care of" women
As has been pointed out by commentators. This is seriously poking at the sleeping giant. Last time Thump was elected there were massive protests and more will be on the way. I have also been giving to Planned Parenthood.