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It isn’t costing consumers much. I run a company that was affected by the tariffs. If we had kept manufacturing in China, cost of goods sold (COGS) would have g
by toasterlovin 7y ago
It isn’t costing consumers much. I run a company that was affected by the tariffs. If we had kept manufacturing in China, cost of goods sold (COGS) would have gone up by 25%. But COGS are only 50% of the price customers pay for our products. So the price increase to our customers would have only been 12.5%. But we didn’t keep our manufacturing in China, we moved it to Taiwan and Vietnam. As a result, our COGS went up by roughly 8% (prices are higher at our new factories), which works out to a 4% increase in prices to our customers. And our products have an unusually high COGS relative to most things consumers would buy at, say, Walmart. So the real impact of the tariffs to the prices most consumers are paying is in the very low single digits, percentage wise. Not really a big deal. Mostly the tariffs are/were very inconvenient for US business that manufactured in China.
- youarewrongstfu 7y agoIn other words the tariffs, like all tariffs, did absolutely nothing but harm the country putting them in place. Brilliant.
- lukevdp 7y agoIn the scenario outlined, China is the biggest loser, Vietnam the biggest winner, USA is a small loser.
- Fjolsvith 7y agoThe scenario did not indicate the benefits to the US, so the tally is probably not correct.
- toasterlovin 7y agoAll I did was outline the costs to the US. You would have to also consider the benefits before you could come to a conclusion.
- scarface74 7y agoIt isn’t costing consumers much. I run a company that was affected by the tariffs. So you’re generalizing your experience from a “company you run” to a country with a $19.39 trillion GDP....
- burfog 7y agoMonths ago, I saw an analysis done by a European financial firm. The burden of the tariffs is 83% paid by China. This is very well aligned with his example. The burden we do pay isn't so bad. It can substitute for other taxes. We used to do this in a big way, funding the country without an income tax. The local employment is pretty good too. Those industrial jobs, for example steelworkers, are reducing income inequality.
- scarface74 7y agoSo we are creating those jobs at a cost of $900K per job. Tariffs are hardly ever a good way to create jobs. https://www.washingtonpost.com/business/2019/05/07/trumps-steel-tariffs-cost-us-consumers-every-job-created-experts-say/ https://www.washingtonpost.com/business/2019/05/07/trumps-st...
- burfog 7y agoIf that supposed $900K comes from Jeff Bezos, owner of the Washington Post, I'm OK with it. In that case, he alone is worth a hundred thousand jobs. I can see why his newspaper might be complaining.
- scarface74 7y agoNo, the $900K it costs the economy per job. So you are doubting the number because it's from the "liberal media"? In that case what about Forbes? https://www.forbes.com/sites/ikebrannon/2018/07/02/steel-tariffs-are-not-creating-american-jobs-at-least-not-in-missouri/#5c4ff4c7457b https://www.forbes.com/sites/ikebrannon/2018/07/02/steel-tar...
- pgodzin 7y agoI don't think it's that trivial for most companies to upend their entire supply chain
- toasterlovin 7y agoEmphasis added to my original quote: > Mostly the tariffs are/were very inconvenient for US business that manufactured in China.