El País’ “ideology has been defined by a leaning towards Europeanism, progressivism, and social liberalism.
…
In the late 1970s and 1980s, El País had close connections with the Spanish Socialist Workers' Party (PSOE)” [1].
> On Thursday, Walmart CEO Doug McMillon said his company's costs keep climbing: "We've continued to see our costs increase each week, which we expect will continue into the third and fourth quarters," he said on an earnings call.
https://www.businessinsider.com/companies-raising-prices-inc...
Perhaps this is just coming from a finance background. But I’m not a fan of folks quoting numbers from “financial reports” without saying what report they’re citing.
> having a hard time finding the ideological bias you're talking about in the El País article
To be clear, I don’t allege this article has a bias. Just that I’m going to be sceptical of a paper calling something out that aligns with their priors.
What is most surprising to me is the price increase for dairy products. I wonder how much of that increase, if any, is caused by tariffs vs other factors.
So in general they end up stuck between a rock and a hard place in a situation like this. The most logical path forward would be to work on supporting domestic supply chains, not subject to tariffs, and helping them to gradually reduce prices through increasing both volume and efficiency.
But the problem that concept runs into is that there's about a coin's flip chance that in 3 years these tariffs will simply be reversed. And any domestic suppliers that were relying on them for a competitive edge will simply be left buried. It thus discourages any sort of meaningful investment in these domestic providers.
This is true of most taxes in a competitive market. Competition was keeping margins low so the money has to come from higher prices or lower salaries, and salaries are sticky so it's usually higher prices. So if the tariffs are instead of some other taxes, it's just a revenue-neutral tax change, not inherently raising prices. But if the tariffs are on top of other taxes then it's a tax increase which gets passed on as higher prices.
The tariffs are primarily hitting the discretionary sector of products, which means people can simply stop buying them. There's also product replacement as an option. For instance the next time somebody's coffee maker breaks they end up buying a French press only to discover that not only is it way cheaper (no filters!), but it never breaks and makes way better coffee anyhow! (Pro Tip: don't use boiling water)
[1] - https://www.ers.usda.gov/data-products/charts-of-note/chart-...
There are lots of nondiscretionary products that take a while to flow through to the point you notice them. The parts to repair the machines that make things for example. Or at a low level, the inserts used in mills to make things out of metal. There are other inserts available, but they aren't as good so they need replacement more often.
The lion's share of imports are going to be alcohol and purchasing produce outside of season.
Do you mean the lion's share of food imports or imports in general? Lots of seafood is processed elsewhere and imported the US. Strangely it appears ground beef is imported to the US even though we are a net exporter of beef.
From American coffee beans? At enough quantity to cover the US market?
Prices are determined at the margin. Domestic producers suddenly have less foreign competition. That lets them raise prices. (Which is what we’re seeing, though not at an accelerated rate to what food prices were doing in ‘24 [1].)
I would add to that statement the context of the market and competitors. Even if retailers east some % of cost increase, this is still a pretty large price increase pressure.
Fair point regarding possible tariff reversal effect on industry investment!
Rock <-USA-> Hard place. At least deflation is not going to be an issue...
Remember future contenders... bribery is legal now.
Also, lo, PS5 https://www.reddit.com/r/PS5/comments/1my6t3o/sony_discounts...
Saying stuff like "China will pay the tariffs" was always bloviating fantasy to anyone who can stitch 2 brain cells together to make a coherent thought.
You'd think this is obvious, but you'd think people wouldn't vote for such ones either in the first place.
Trump, with his lying and outright vote buying (No Taxes on Tips) is the kind of right wing candidate that can win enough immigrants to be nationally viable. Blue Rose research estimates Trump tied with naturalized citizens. Little Bangladesh in Queens swung 50 points to the right from 2020. Populist rhetoric unrooted in facts is really popular among third world voters.
Harris took the same position on 'no taxes on tips'. https://www.bbc.com/news/articles/clyn511dgnjo.amp
A tariff is a consumption tax that’s less than 100% passed onto consumers, which has the effect of discouraging imports. All good things.
Tariffs are the exact opposite of that, they're highly regressive.
Wondering why raising higher-bracket income tax is such a problem.
There are lots of ways to design a progressive consumption tax, but yes, one way is to tax luxury goods at a higher rate than essentials. This is already done in many states, for example, where groceries (or at least "basic" groceries like bread, milk and produce but not prepared foods) are exempt from sales tax.
Another way is a sales tax rebate, e.g. where everyone can file for a rebate of sales tax of, say, the first $10000 of goods in a year. So poorer people with lower expenditures end up having a much lower effective tax rate.
Additionally there are a lot of goods that are GST exempt.
Things like basic groceries, prescription drugs, feminine hygiene products, hearing aids etc...
Instead, we blew up the deficit and lowered taxes (but only for the really rich).
So many problems and social angst is downstream of expensive housing. Higher interest rates, fewer laborers, and more expensive building supplies (due to tariffs) is just making the housing crisis worse.
Oh and just wait until the Fed’s independence is completely gone. Our economy is galloping towards Peronism. Favored groups get economic benefits. Inflation is out of control. Competitiveness is gone. Capital flight. Rapid erosion of quality of life. It won’t be fun.
Everything has trade offs. Diluting the dollar increases prices for nothing in return. Pretty much all downside for everybody but the top. Tariffs increase prices to the benefit of domestic producers and benefits everybody.
What we will see is if prices are more important than building skills and wealth of our fellow citizens.
Not necessarily, and there are plenty of examples around the world of tariffs that do not do that, but instead cripple the economy. Tariffs are just one aspect. If the domestic supply is not there for one reason or another, you have the worst of both worlds, with high prices and still no re-industrialisation.
You need companies to be reasonable confident that they’ll be making money next year, and you need the situation to be stable enough to let people invest to make it happen. You need those people to be confident enough that they won’t just be crushed by a president’s friend who has more access to power than they have. You need rule of law and due process. Not a kleptocratic oligarchy.
Otherwise you’re just sawing off your leg to repair a broken ankle.
For (a simplified) example, if there’s a 30% tariff on a $100 item, all else equal, the price is now $130, and the customer that originally would have paid $100 is now paying $130.
But what can — and I’ve experienced firsthand — happen, is that the US retailer will eat some/all of the tariff in order to not lose the customers business (or even just out of goodwill).
Also, the foreign supplier can do the same thing. Rather than lose the business of the US retailer, they may, in turn, eat some/all of the tariff.
I’ve seen both of these happen with products I’ve purchased over the past few months.
I’m not saying this happens a lot, but I don’t know that it doesn’t, either.
I’m just saying that it’s not as clear cut as the definition.
The whole idea is to dissuade the consumer from buying a foreign product, and choosing a domestic one instead. But if there is no domestic alternative, then it is always just going to be a case of "pay more or don't have it".
Anyway I just think everyone in the US are very silly for allowing this to happen. Very silly indeed.
I’m not arguing that it is. But passing the price on to the customer isn’t necessarily sustainable either.
And to be clear, I’m not arguing in favor of tariffs. Just saying that, in practice, it’s not always “suppliers and retailers still get their money, and the customer pays 100% of the tariff”.
> And your $130 example still demonstrates that the consumer just ends up paying more.
That example was the case when it does follow the definition. The exceptions that followed that were when it may not.
> The whole idea is to dissuade the consumer from buying a foreign product, and choosing a domestic one instead.
Not just the customer, but the retailer or manufacturer getting goods/parts from foreign suppliers.
> But if there is no domestic alternative, then it is always just going to be a case of "pay more or don't have it".
No argument, there. I’ve already seen some small businesses make the tough choice to close their doors because of tariffs.
You see, tariffs are a tool. They’re protectionist. And when other countries distort markets, importers often respond this way.
Targeted tariffs have always existed, and the US and the EEC and then the EU were involved in a lot of trade skirmishes that did result in some barrier being put in place. This is not the same.
Please show me retailers that have 30%+ margins that let them happily absorb all of the tariff. Walmart's margin is 3-4%.
Even if they absorb just some of the tariff, it means the customer still ends up paying more.
Essentially even in an unrealistically optimistic position, the consumer will STILL get stuck with higher prices.
The default defense comes from Trump who has - since 1980s has pushed for tariffing other countries to raise government revenue. The idea being - America drives lot of market demand. This seems to ignore basic economic facts. Importers pay tariffs and also that corporates are all about profit maximization.
Companies might eat some of the tariffs in short term but they will always reduce costs in long term. That means jacking up prices slowly, finding ways to circumvent tariffs, using low cost - maybe even harmful but unbanned substitutes in products to name a few. Even the domestic company has a reason to hike up prices just below the price of imported goods. And also, because there is less competition domestic company might even reduce R&D because they can continue to rake in profits from local markets.
The second defense is around domestic companies. I don't think anyone will disagree that each country needs to protect its most crucial domestic industries. But in those cases tariffs ae a precision tool, not a hammer. Tariffing everything doesn't make sense except it goes back to original defense - the point is to raise revenue.
why is there ~zero prominent CEOs/managers on tv explaining how turning US trade policy in to a personalised autocracy of one senile old man is Bad, Actually?
bix6•3h ago
thisisit•1h ago