Trump's tariffs cost you to re -election - here is the proof
Trump's tariffs cost you to re -election - here is the proof
If you tire to snort the strict advice from academics who discuss the negative effects of tariffs on the economy, I can understand this. The word "customs" has something that even makes the heaviest eyelids ascending, as in a 9-o'clock lecture by economics.
The effects of Trump’s tariffs
But if you want to igen the many warnings from economists to Listen to the voices of those who lead the companies from which they buy their everyday goods: prices will increase. How strong and how fast it is difficult to predict, but one thing is certain: If Trumps are implemented far -reaching tariffs, you need a larger amount of dollars to pay for the usual products.
price increases are inevitable
"If we receive tariffs, we will pass these costs on to consumers," said Philip Daniele, CEO of Autozone, during a conference call in September. Autozone will not wait until the policies come into force. As soon as you know how high the serves will be, "we usually increase prices in advance," he added.
What are tariffs?
A brief explanation of tariffs: they are a tax on imported goods - be it clothing, shoes, toys, auto parts or household appliances. However, the additional money does not come from foreign companies that produce these goods. The American company that imports the goods pays the money to the US finance ministry. And often this means that ultimately you, the consumer who bear customs costs.
The consequences of past tariffs
This is not speculation or theory; This is how tariffs work-and the last six years in global trade. In 2018, during his first term, Trump did tariffs in the amount of 30% to 50% to goods that were imported from China, which forced Beijing to react to US goods such as aluminum, airplanes, cars, pigs and soybeans. Since then we have been in a constant trade conflict with China.
consumers pay the colliery
You may not have noticed the changes immediately, and the pandemic also mixed up the supply chains and driven the prices even further up. However, several studies come to the conclusion that the costs of these tariffs have been borne almost exclusively by American consumers and companies. By the end of 2019, the average US budget paid almost $ 500 more per year, so a Analysis . .
future customs increases
If he is re-elected, Trump proposed a uniform custom of 20% on all US imports-something that we have never seen before-as well as even higher tariffs of 60% against China and other large trading partners. This radical measure could cost a typical American household with medium income by over $ 2,600 a year, so Research of the Peterson Institute for International Economics.
Trump's false promise
Trump has repeated about this fact . The most optimistic interpretation of Trump's customs plans would be that he tried to get American companies to move their production facilities back to US floor and thus create jobs. But you don't need a MBA or a degree in business to know that US workers are expensive, which could continue to increase prices.
The reality of pricing
Even if tariffs could undo globalization for decades, it is unlikely that you have the desired effect that Trump strives for. Simply ask Timothy Boyle, the CEO of Columbia Sportswear, who recently announced that the argument that tariffs that tariffs improve domestic production of goods such as shoes and clothing are wrong ... The goods that we deal with in the field of shoes and clothing are among the most taxed in the United States. not in an increased investment in domestic production. ”
price increases are inevitable
In an interview with The Washington Post last week was even more direct and said that the company was already planning that Increase prices. "Today we were buying for the delivery next autumn. So we will handle it and simply increase the prices. ... It will be very, very difficult to keep the products affordable for the Americans."
The challenges of small companies
However, it would be important to emphasize that not all products would experience a price increase immediately. Large companies with higher margins are often able to absorb at least part of the additional costs before passing them on to consumers. One example is Trump's own profit-oriented activities, such as the Trump Bible, which, like the Associated Press Last month, came from a printing company based in China. With such a profit margin, the company could probably do the costs of Trump's tariffs and swallow the shipping costs and other fees without increasing the prices.Large companies such as Walmart and Target can (and do) this too, because they are able to negotiate better conditions with their suppliers due to their size. However, smaller companies that employ about half of American workers are not in the same position. They often work with narrow margins and high volumes, which leaves less scope for prices. This usually means that you either have to increase the prices or reduce the costs significantly - and then the layoffs begin.
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