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well the goods are there, its not like they stop flowing or something just need 30% tax on top of it edit: ok, I didnt know that bussiness stop buying, but the

well the goods are there, its not like they stop flowing or something just need 30% tax on top of it edit: ok, I didnt know that bussiness stop buying, but they must buy somethings in the future right either buy from other tax exempt or buy thing with add value tax

nemomarx 2y ago
Have you seen the news at the ports? less containers coming in. the goods will not necessarily keep flowing if the price goes up and their margin goes away
hundreddaysoff 2y ago
I think the theory is like this: 1. new 30% tax 2. people stop buying so many goods due to (1) 3. due to lack of demand, our shipping industry seizes up and goods stop flowing, at least till (1) goes away My main source for that theory is https://medium.com/@ryan79z28/im-a-twenty-year-truck-driver-i-will-tell-you-why-america-s-shipping-crisis-will-not-end-bbe0ebac6a91 https://medium.com/@ryan79z28/im-a-twenty-year-truck-driver-...
- gymbeaux 2y ago
  There’s a bill[1] sitting in the House of Representatives that would abolish the IRS and replace all tax code with a consumption tax. In typical fashion they’ve written it so it seems like the flat consumption tax will be something like 24% but it’s actually 30% (they word it as something like “24% of the total is tax” which really means “the tax is 30%”). I’m curious when they plan on deploying this. It specifies a 3-year schedule so you think okay is this to be signed into law in 2025 so that the IRS is abolished during the next election year, or are they going to wait a year or two and have the IRS abolishment only “trigger” if Republicans continue to control the government beyond 2028? Or perhaps they will push it through if/when Democrats retake some or all of Congress in 2026? One thing’s for sure though, the 1% will use cryptocurrency to dodge this consumption tax and it will (as usual) disproportionately affect the lower and middle classes, who aren’t as savvy in tax fraud/evasion/“loopholes”. https://www.congress.gov/bill/119th-congress/house-bill/25/text https://www.congress.gov/bill/119th-congress/house-bill/25/t...
  - zdragnar 2y ago
    Either a Democratic Congress or president would prevent such a bill from passing. Sales taxes are inherently flat, which to them means regressive. The idea that we would give up progressive taxes is pretty antithetical to their platform, given how many campaign on raising taxes on high income earners. Given how slow even a single-party-controlled Congress is, I sincerely doubt such a bill would ever see the light of day.
    - quesera 2y ago
      > Either a Democratic Congress or president would prevent such a bill from passing The Senate still has the filibuster, as well. This will not pass in the current Congress either. The filibuster rule is vulnerable, but I don't think there's enough support from Senate Republicans to do so. If I'm wrong, it would be an escalation which would add more fuel to the 2026 fire.
      - gymbeaux 2y ago
        I’m always hazy on how exactly that works. I know some bills require a supermajority (66) and I know filibuster can block some bills with fewer votes than that… but it doesn’t always work, because the 2017 tax reform bill was passed. Also, I remember there being talk when the DINOs were voting with the Republicans of ending the filibuster…. So… I mean the current admin just ignores rules, why wouldn’t this be the Congress that ends the filibuster? This could be their one shot to implement the “Final Solution” (Project 2025).
        quesera 2y ago
        I believe very few votes require a supermajority in the Senate -- impeachment votes definitely do, and also votes to override a Presidential veto. All ordinary votes just require a simple majority, but the filibuster is sort of a special-case that can be invoked any time, requiring 60 votes to bring the vote to the table at all. You're right -- if this Senate abolishes the filibuster, it will likely be for "budget votes only" or somesuch. The Senate isn't quite as full of short-term thinkers as the House is though. I don't think the Senate Rs will go for it, because it's the only thing stopping a future D majority from doing what majorities do, and smart Rs know they are a minority party under ordinary circumstances. But if I'm wrong, it will mean that the Senate Rs are going for broke on a short-term play, and may be discounting future risks. That would be the behaviour of the very desperate, or of the very powerful. If the Senate Rs believe they are one of those two things -- either one -- the consequences could be enormous. This is all very dramatic of course. Normally I'd dismiss such ideas. But the temperature is very high right now, and this time might actually be different, this time...
XorNot 2y ago
They absolutely do. Tarrifs are paid at point of import not point of sale, and who the heck wants to put something on a container ship for a month of transit not knowing if you can even afford the customs charges at the end before you sell it, or won't take a loss because surprise a week after paying tarrifs are now cancelled.
- gymbeaux 2y ago
  Underrated comment. People don’t understand global trade and logistics (understandably so- it’s all very complicated and there are multiple middlemen involved between the factory in China and the company in the U.S. buying the goods to resell - they of course being yet another middleman).
- tonyhart7 2y ago
  "Tarrifs are paid at point of import" are they??? didn't they just taxed at arrival at the port? or something
  - magicalhippo 2y ago
    Assuming it's not wildly different over there in the US, goods must be declared when the goods is at the border if you wish to use or transfer the goods, and tariffs must be paid. For a ship this will be the port, at least that's how it is here. Alternatively you can put the goods in a bonded warehouse[1], and leave it there until you wish to use it or transfer it to someone else. It's not free, but it allows you to postpone the declaration, and hence payment of tariffs, until you take the goods out of the bonded warehouse. Typically a bonded warehouse requires physical security, paperwork and a bank guarantee to prevent goods disappearing, so it isn't free to keep goods there. [1]: https://en.wikipedia.org/wiki/Bonded_warehouse https://en.wikipedia.org/wiki/Bonded_warehouse
  - InitialLastName 2y ago
    That's the same thing. When you want to import goods, you provide information to the customs officials at the location those goods enter the country saying: * Here's what I'm importing * Here's where I'm importing it from * Here's the value Then you pay a bill based on that value and the tariff, and they let your goods clear customs and get loaded onto a truck to go wherever you want them to go in the US. If you're shipping something by boat (like most goods), the "point of import" is the port. Note: this is all actually much more complicated and individualized than I described because of networks of middlemen, logistics companies, distributors, manufacturers and lawyers.
0_____0 2y ago
Supply and demand shocks echo for a while. How long did it take for toilet paper to be stocked normally during the pandemic in the US? Edit to add: Better example for me was the semiconductor industry. It was hard for years to design hardware because key ICs would disappear. You needed to buy the ICs the moment you thought you might use them, a form of stockpiling that had no winner - it's very expensive to buy stock that you potentially never use, and it deprives the rest of the market simultaneously.
xnx 2y ago
When import taxes reach a certain level, it's effectively an embargo.
lumost 2y ago
The tax is 145% on Chinese imports. To preserve relative margins companies need to increase prices by 145%. Obviously, you are not going to buy the extra yard camera that was 100 dollars last week but will soon be 250. The tariffs are effectively a 30-150% price increase on all retail products, along with some marginal price increase on all manufactured goods. Given the nearly assured recession, it is unclear how willing American consumers and corporations are to eat this tax. Some businesses will take it out of the margin, others will pass it along.
- thfuran 2y ago
  And tariffs are collected at arrival, so companies can be obligated to pay double to receive goods they already purchased when huge tariffs suddenly appear. That can mean spending a significant amount of extra money on goods they may not be able to sell profitability.
- breadwinner 2y ago
  > To preserve relative margins companies need to increase prices by 145%. Not true. If you have watched Shark Tank you have seen that products cost, as an example, $6 landed, but retail for $24. Tariffs are 145% of $6, so around $9. So they only have to increate the retail price from $24 to $33 to keep the same profit margin. In this example that's a 37% increase, not 145%.
  - hnav 2y ago
    _relative_ margins as in percent, $6 with 145% tariff is $14.7 which means to maintain the 75% margin you'd have to jack the price up to nearly $60. I agree that you don't necessarily need a 75% margin to do business, but it can't stay flat either because you're floating more than double the money on inventory. In reality prices for cheap crap with huge margins will probably only go up let's say 50% but items that have thin margins will definitely more than double.
jcranmer 2y ago
The goods are not there. Shipping volumes from China to the US are down I think by 40% right now, and shipping companies are outright canceling berthing in US ports right now due to the low shipping flows. We're about 1 or 2 months right now from some goods not being available in the US at any price. If people lost their mind over that happening during COVID, well, this is going to be just as bad.

nemomarx 2y ago

Have you seen the news at the ports? less containers coming in. the goods will not necessarily keep flowing if the price goes up and their margin goes away

hundreddaysoff 2y ago

I think the theory is like this: 1. new 30% tax 2. people stop buying so many goods due to (1) 3. due to lack of demand, our shipping industry seizes up and goods stop flowing, at least till (1) goes away My main source for that theory is https://medium.com/@ryan79z28/im-a-twenty-year-truck-driver-i-will-tell-you-why-america-s-shipping-crisis-will-not-end-bbe0ebac6a91 https://medium.com/@ryan79z28/im-a-twenty-year-truck-driver-...

gymbeaux 2y ago
There’s a bill[1] sitting in the House of Representatives that would abolish the IRS and replace all tax code with a consumption tax. In typical fashion they’ve written it so it seems like the flat consumption tax will be something like 24% but it’s actually 30% (they word it as something like “24% of the total is tax” which really means “the tax is 30%”). I’m curious when they plan on deploying this. It specifies a 3-year schedule so you think okay is this to be signed into law in 2025 so that the IRS is abolished during the next election year, or are they going to wait a year or two and have the IRS abolishment only “trigger” if Republicans continue to control the government beyond 2028? Or perhaps they will push it through if/when Democrats retake some or all of Congress in 2026? One thing’s for sure though, the 1% will use cryptocurrency to dodge this consumption tax and it will (as usual) disproportionately affect the lower and middle classes, who aren’t as savvy in tax fraud/evasion/“loopholes”. https://www.congress.gov/bill/119th-congress/house-bill/25/text https://www.congress.gov/bill/119th-congress/house-bill/25/t...
- zdragnar 2y ago
  Either a Democratic Congress or president would prevent such a bill from passing. Sales taxes are inherently flat, which to them means regressive. The idea that we would give up progressive taxes is pretty antithetical to their platform, given how many campaign on raising taxes on high income earners. Given how slow even a single-party-controlled Congress is, I sincerely doubt such a bill would ever see the light of day.
  - quesera 2y ago
    > Either a Democratic Congress or president would prevent such a bill from passing The Senate still has the filibuster, as well. This will not pass in the current Congress either. The filibuster rule is vulnerable, but I don't think there's enough support from Senate Republicans to do so. If I'm wrong, it would be an escalation which would add more fuel to the 2026 fire.
    - gymbeaux 2y ago
      I’m always hazy on how exactly that works. I know some bills require a supermajority (66) and I know filibuster can block some bills with fewer votes than that… but it doesn’t always work, because the 2017 tax reform bill was passed. Also, I remember there being talk when the DINOs were voting with the Republicans of ending the filibuster…. So… I mean the current admin just ignores rules, why wouldn’t this be the Congress that ends the filibuster? This could be their one shot to implement the “Final Solution” (Project 2025).
      - quesera 2y ago
        I believe very few votes require a supermajority in the Senate -- impeachment votes definitely do, and also votes to override a Presidential veto. All ordinary votes just require a simple majority, but the filibuster is sort of a special-case that can be invoked any time, requiring 60 votes to bring the vote to the table at all. You're right -- if this Senate abolishes the filibuster, it will likely be for "budget votes only" or somesuch. The Senate isn't quite as full of short-term thinkers as the House is though. I don't think the Senate Rs will go for it, because it's the only thing stopping a future D majority from doing what majorities do, and smart Rs know they are a minority party under ordinary circumstances. But if I'm wrong, it will mean that the Senate Rs are going for broke on a short-term play, and may be discounting future risks. That would be the behaviour of the very desperate, or of the very powerful. If the Senate Rs believe they are one of those two things -- either one -- the consequences could be enormous. This is all very dramatic of course. Normally I'd dismiss such ideas. But the temperature is very high right now, and this time might actually be different, this time...

XorNot 2y ago

They absolutely do. Tarrifs are paid at point of import not point of sale, and who the heck wants to put something on a container ship for a month of transit not knowing if you can even afford the customs charges at the end before you sell it, or won't take a loss because surprise a week after paying tarrifs are now cancelled.

gymbeaux 2y ago
Underrated comment. People don’t understand global trade and logistics (understandably so- it’s all very complicated and there are multiple middlemen involved between the factory in China and the company in the U.S. buying the goods to resell - they of course being yet another middleman).
tonyhart7 2y ago
"Tarrifs are paid at point of import" are they??? didn't they just taxed at arrival at the port? or something
- magicalhippo 2y ago
  Assuming it's not wildly different over there in the US, goods must be declared when the goods is at the border if you wish to use or transfer the goods, and tariffs must be paid. For a ship this will be the port, at least that's how it is here. Alternatively you can put the goods in a bonded warehouse[1], and leave it there until you wish to use it or transfer it to someone else. It's not free, but it allows you to postpone the declaration, and hence payment of tariffs, until you take the goods out of the bonded warehouse. Typically a bonded warehouse requires physical security, paperwork and a bank guarantee to prevent goods disappearing, so it isn't free to keep goods there. [1]: https://en.wikipedia.org/wiki/Bonded_warehouse https://en.wikipedia.org/wiki/Bonded_warehouse
- InitialLastName 2y ago
  That's the same thing. When you want to import goods, you provide information to the customs officials at the location those goods enter the country saying: * Here's what I'm importing * Here's where I'm importing it from * Here's the value Then you pay a bill based on that value and the tariff, and they let your goods clear customs and get loaded onto a truck to go wherever you want them to go in the US. If you're shipping something by boat (like most goods), the "point of import" is the port. Note: this is all actually much more complicated and individualized than I described because of networks of middlemen, logistics companies, distributors, manufacturers and lawyers.

0_____0 2y ago

Supply and demand shocks echo for a while. How long did it take for toilet paper to be stocked normally during the pandemic in the US? Edit to add: Better example for me was the semiconductor industry. It was hard for years to design hardware because key ICs would disappear. You needed to buy the ICs the moment you thought you might use them, a form of stockpiling that had no winner - it's very expensive to buy stock that you potentially never use, and it deprives the rest of the market simultaneously.

xnx 2y ago

When import taxes reach a certain level, it's effectively an embargo.

lumost 2y ago

The tax is 145% on Chinese imports. To preserve relative margins companies need to increase prices by 145%. Obviously, you are not going to buy the extra yard camera that was 100 dollars last week but will soon be 250. The tariffs are effectively a 30-150% price increase on all retail products, along with some marginal price increase on all manufactured goods. Given the nearly assured recession, it is unclear how willing American consumers and corporations are to eat this tax. Some businesses will take it out of the margin, others will pass it along.

thfuran 2y ago
And tariffs are collected at arrival, so companies can be obligated to pay double to receive goods they already purchased when huge tariffs suddenly appear. That can mean spending a significant amount of extra money on goods they may not be able to sell profitability.
breadwinner 2y ago
> To preserve relative margins companies need to increase prices by 145%. Not true. If you have watched Shark Tank you have seen that products cost, as an example, $6 landed, but retail for $24. Tariffs are 145% of $6, so around $9. So they only have to increate the retail price from $24 to $33 to keep the same profit margin. In this example that's a 37% increase, not 145%.
- hnav 2y ago
  _relative_ margins as in percent, $6 with 145% tariff is $14.7 which means to maintain the 75% margin you'd have to jack the price up to nearly $60. I agree that you don't necessarily need a 75% margin to do business, but it can't stay flat either because you're floating more than double the money on inventory. In reality prices for cheap crap with huge margins will probably only go up let's say 50% but items that have thin margins will definitely more than double.

jcranmer 2y ago

The goods are not there. Shipping volumes from China to the US are down I think by 40% right now, and shipping companies are outright canceling berthing in US ports right now due to the low shipping flows. We're about 1 or 2 months right now from some goods not being available in the US at any price. If people lost their mind over that happening during COVID, well, this is going to be just as bad.