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If the companies are interested in protecting their margins, I think we will see prices higher than the % increase in tariffs e.g. many grocery stores have a 1

by 6DM 2y ago

If the companies are interested in protecting their margins, I think we will see prices higher than the % increase in tariffs e.g. many grocery stores have a 1 - 4% profit margin, so a 25% increase would mean they have to increase more than 25% because the overall profit margin will decrease. $1 with a 4% profit margin means it make 4 cents, but $1.25 with a 4% profit margin is 5 cents. So that means they'd have to raise it like 27%.

alephnerd 2y ago
> I think we will see prices higher than the % increase in tariffs Pretty much. Most consumers (and even a lot of purchasers) don't know about the individual tariff rates per good, so it's safe to assume that you can optimize pricing to maximize your margin where possible.
- jayd16 2y ago
  This was presumably true already, but it's certainly true that some price fixing can happen while the dust settles (if it ever will).
  - alephnerd 2y ago
    > some price fixing can happen It happens a lot, but price fixing is a fairly slam dunk case for local DAs.
defiantset 2y ago
[dead]
jayd16 2y ago
Beyond that, there's economies of scale that won't scale as far, based on lowered demand.
koolba 2y ago
The vast majority of products at grocery stores are not imported from overseas. And even when they are, the cost of the good is only a part of the total cost to the store. For example no tariff would change the price of intra-USA transport of imported goods (well besides oil…). Labor and real estate need to taken out as well. Obviously if you increase a cost the price is going to go up, but it’s not anywhere near 27% for groceries specifically. Now pure imports, like most of the crap on Amazon or Temu, is another story.
- cratermoon 2y ago
  Have you looked at where your produce comes from?
  - lesuorac 2y ago
    You mean to tell me that Corn isn't grown in the US in the dead of winter? I wonder if coffee will be the real thing that gets people upset.
    - envp 2y ago
      It already underwent some recent shrink flation. I used to be able buy 12oz bags but they’re 10oz now, consumers are getting shafted regardless :D
    - cratermoon 2y ago
      coffee and chocolate
deleted 2y ago
[deleted]
laweijfmvo 2y ago
Of course we will.... Inflation -> Sorry, gotta raise prices -> Profits increased Interest Rates -> Sorry, gotta lay everyone off -> Profits increased Tariffs -> Sorry, gotta raise prices again -> .....

by 6DM 2y ago

alephnerd 2y ago

> I think we will see prices higher than the % increase in tariffs Pretty much. Most consumers (and even a lot of purchasers) don't know about the individual tariff rates per good, so it's safe to assume that you can optimize pricing to maximize your margin where possible.

jayd16 2y ago
This was presumably true already, but it's certainly true that some price fixing can happen while the dust settles (if it ever will).
- alephnerd 2y ago
  > some price fixing can happen It happens a lot, but price fixing is a fairly slam dunk case for local DAs.

defiantset 2y ago

[dead]

jayd16 2y ago

Beyond that, there's economies of scale that won't scale as far, based on lowered demand.

koolba 2y ago

The vast majority of products at grocery stores are not imported from overseas. And even when they are, the cost of the good is only a part of the total cost to the store. For example no tariff would change the price of intra-USA transport of imported goods (well besides oil…). Labor and real estate need to taken out as well. Obviously if you increase a cost the price is going to go up, but it’s not anywhere near 27% for groceries specifically. Now pure imports, like most of the crap on Amazon or Temu, is another story.

cratermoon 2y ago
Have you looked at where your produce comes from?
- lesuorac 2y ago
  You mean to tell me that Corn isn't grown in the US in the dead of winter? I wonder if coffee will be the real thing that gets people upset.
  - envp 2y ago
    It already underwent some recent shrink flation. I used to be able buy 12oz bags but they’re 10oz now, consumers are getting shafted regardless :D
  - cratermoon 2y ago
    coffee and chocolate

deleted 2y ago

[deleted]

laweijfmvo 2y ago

Of course we will.... Inflation -> Sorry, gotta raise prices -> Profits increased Interest Rates -> Sorry, gotta lay everyone off -> Profits increased Tariffs -> Sorry, gotta raise prices again -> .....