5 ms·

I haven't read anything comprehensive about how much damage the tarriffs have done to businesses, especially those that rely on procurement contracts that suffe

by nzeid 1y ago

I haven't read anything comprehensive about how much damage the tarriffs have done to businesses, especially those that rely on procurement contracts that suffered compounded price increases. But a sudden drop in jobs would be a pretty good indicator of the collapse of those businesses.

ToucanLoucan 1y ago
From what I know from friends in a few different industries, it's fucking brutal right now. Raw materials/parts costs from China have all increased and not by a bit, but by huge amounts. Finished product prices all have to go up to compensate which means sales of... everything not completely essential are falling. All the lost jobs also means less money to go around for consumers, which of course means even fewer sales which means more layoffs. And that's not even going into sectors that are dependent on migrant labor and all the downstream industries from THEM. Truly just masterstrokes of policy from the current administration. Well maybe people will finally start paying attention when what's left of American manufacturing eats shit. You'll have to forgive me if I'm skeptical though. Huge swathes of the American public are so utterly underwater in propaganda that they've lost the ability to reason entirely.
- cheema33 1y ago
  We have create a massive cult at the national level. There is no reasoning with them. There is nothing that this administration can do to offend them or shake their confidence.
- jacquesm 1y ago
  > Huge swathes of the American public are so utterly underwater in propaganda that they've lost the ability to reason entirely. They're right here on HN as well. And they're accusing the rest that they are the ones that are drinking the kool aid. It's a pretty weird time, tbh, I never ever thought it would get this bad. But I've seen some glimpses of it, a Dutch guy I know emigrated to the USA, got married to a woman in one of the heartland states and within a short few months he was completely on the Trump bandwagon and saying and writing stuff that his previous incarnation would be horrified at.
- duxup 1y ago
  Yeah John Deere (who is a big manufacturer in the US) has seen material costs up ... and due to the tariff fight farmers don't want to buy new equipment. Big double whammy. And they're they employ 30k people, many in manufacturing in the US.
  - ToucanLoucan 1y ago
    Every big industrial manufacturer like them is going to be HURTING in the next several years. That double-whammy you describe can apply to basically any industrial sector that uses large vehicles/equipment.
Analemma_ 1y ago
You haven't read anything comprehensive about it because we're in a Reign of Terror where if your business says anything about the effects of the tarriffs, you can expect death threats, baseless but expensive legal investigations at the Federal level, red state AGs threatening more baseless but expensive legal investigations at the state level, etc. Nobody is going to be open and honest about it, better to suffer in silence and hope enough people suffer all at once that we get improved policy out of it.
itsoktocry 1y ago
As an avid half-pay-attention Bloomberg viewer, analysts figure Q4 is where it really starts to show up, partially because some importers were able to front run the tariffs. Thing is, it's not even the tariffs themselves that's the issue; it's the uncertainty. Are the tariffs legal, or not? Are they just a bargaining chip or not? How can a company invest without any idea if the tariffs will be around in a year?
- InitialLastName 1y ago
  It's even worse than "what will this look like in a year?". If it takes 4-6 months from when you pay the money to build a product to when you have that product available to sell to a customer, and you don't know how much your parts are going to cost OR how much you're going to have to pay to the federal government when those products finally clear customs (or what legal hoops you're going to need to jump through to get that product clear), how can you operate?
  - jacquesm 1y ago
    To give you one idea of this: Christmas starts in January for consumer stuff. That's how long it takes and if there is any hick-up then you might miss the time slot. These tariffs are wreaking havoc with the planning of just about every major company because there are almost no players that are 100% vertically integrated that just use stuff made in the USA. Everybody is dependent on everybody else and some of those parties are abroad. This tariff thing - to quote Dirk Gently - utterly misses the fundamental interconnectedness of everything.
  - SteveNuts 1y ago
    > how can you operate? It's much easier for huge, established companies to do this (easier to absorb because they already have huge teams of procurement specialists, lawyers, etc). I think that's at least part of the point in the first place.
- danans 1y ago
  > How can a company invest without any idea if the tariffs will be around in a year? They can invest in methods that will lower costs in a way that will outlast tariffs, like replacing/reducing domestic headcount with the more physical automation (for manufacturing work) and more AI-enhanced workflows (for white-collar work). In the short term, it could help offset the cost of the tariffs. In the long term, it lowers the need for human labor.
Aurornis 1y ago
It's going to take a while. Most companies ordered as much inventory as they could before the tariffs hit. Companies have to work through that lower-cost inventory first, then deal with the tariffs, then have that data start to show up in later decisions. There's also a lingering hope that the tariffs will be struck down and disappear, so companies are waiting as long as possible before taking the tariff hit on new orders.
- lisbbb 1y ago
  The handwringing is so amazing here, as is the denial of what needs to be done to stabilize the US economy, which is to bring more manufacturing home, create jobs organically, and stop relying on China, who is not our friend.
  - dragon-hn 1y ago
    That may or may not be true. But what is immediately clear is that Trump has no idea how to accomplish it. Americans are in I believe 6 months of contraction in manufacturing jobs.
  - axiolite 1y ago
    To reduce dependence on China, tariffs should ONLY be on China, and not the entire world including neighbors and close allies. To help bring manufacturing back to the US, the tariffs should have been fixed, in legislation, with 2+ years of advanced notice before implementation, to allow companies to plan for them and implement something. The ad-hoc approach taken by the current administration ensures 100% that neither of those will happen.
    - klipklop 1y ago
      To be fair China can rapidly setup factories in many countries or just use them as re-sellers. Heck many of the "Made in India" goods are just re-branded stuff from China. This is why the tariffs encompass everything, even remote deserted islands. If you don't tariff everywhere you leave a loophole open for China to potentially exploit. (Note I am not saying I 100% agree with the near-global tariffs, but I can see why they cover so many regions.)
HillRat 1y ago
One thing is that a lot of economic activity was front-loaded to the first few quarters as businesses scrambled to get inventory on board ahead of tariffs; now we're seeing companies having burned through inventory, so inflationary impacts are going to start working their way through the supply chain now in earnest, and we're going to see a concomitant slowdown in economic activity as that acts as a persistent drag across multiple sectors. In practice you're looking at something equivalent to a 3-4% federal sales tax on all purchases, but keep an eye on where it falls on relatively inelastic goods, which will have an outsize effect on consumer finances.
tmaly 1y ago
I think it is hard to say. With a new gamer in the BLS, maybe they are faking numbers to push a rate cut?

by nzeid 1y ago

ToucanLoucan 1y ago

From what I know from friends in a few different industries, it's fucking brutal right now. Raw materials/parts costs from China have all increased and not by a bit, but by huge amounts. Finished product prices all have to go up to compensate which means sales of... everything not completely essential are falling. All the lost jobs also means less money to go around for consumers, which of course means even fewer sales which means more layoffs. And that's not even going into sectors that are dependent on migrant labor and all the downstream industries from THEM. Truly just masterstrokes of policy from the current administration. Well maybe people will finally start paying attention when what's left of American manufacturing eats shit. You'll have to forgive me if I'm skeptical though. Huge swathes of the American public are so utterly underwater in propaganda that they've lost the ability to reason entirely.

cheema33 1y ago
We have create a massive cult at the national level. There is no reasoning with them. There is nothing that this administration can do to offend them or shake their confidence.
jacquesm 1y ago
> Huge swathes of the American public are so utterly underwater in propaganda that they've lost the ability to reason entirely. They're right here on HN as well. And they're accusing the rest that they are the ones that are drinking the kool aid. It's a pretty weird time, tbh, I never ever thought it would get this bad. But I've seen some glimpses of it, a Dutch guy I know emigrated to the USA, got married to a woman in one of the heartland states and within a short few months he was completely on the Trump bandwagon and saying and writing stuff that his previous incarnation would be horrified at.
duxup 1y ago
Yeah John Deere (who is a big manufacturer in the US) has seen material costs up ... and due to the tariff fight farmers don't want to buy new equipment. Big double whammy. And they're they employ 30k people, many in manufacturing in the US.
- ToucanLoucan 1y ago
  Every big industrial manufacturer like them is going to be HURTING in the next several years. That double-whammy you describe can apply to basically any industrial sector that uses large vehicles/equipment.

Analemma_ 1y ago

You haven't read anything comprehensive about it because we're in a Reign of Terror where if your business says anything about the effects of the tarriffs, you can expect death threats, baseless but expensive legal investigations at the Federal level, red state AGs threatening more baseless but expensive legal investigations at the state level, etc. Nobody is going to be open and honest about it, better to suffer in silence and hope enough people suffer all at once that we get improved policy out of it.

itsoktocry 1y ago

As an avid half-pay-attention Bloomberg viewer, analysts figure Q4 is where it really starts to show up, partially because some importers were able to front run the tariffs. Thing is, it's not even the tariffs themselves that's the issue; it's the uncertainty. Are the tariffs legal, or not? Are they just a bargaining chip or not? How can a company invest without any idea if the tariffs will be around in a year?

InitialLastName 1y ago
It's even worse than "what will this look like in a year?". If it takes 4-6 months from when you pay the money to build a product to when you have that product available to sell to a customer, and you don't know how much your parts are going to cost OR how much you're going to have to pay to the federal government when those products finally clear customs (or what legal hoops you're going to need to jump through to get that product clear), how can you operate?
- jacquesm 1y ago
  To give you one idea of this: Christmas starts in January for consumer stuff. That's how long it takes and if there is any hick-up then you might miss the time slot. These tariffs are wreaking havoc with the planning of just about every major company because there are almost no players that are 100% vertically integrated that just use stuff made in the USA. Everybody is dependent on everybody else and some of those parties are abroad. This tariff thing - to quote Dirk Gently - utterly misses the fundamental interconnectedness of everything.
- SteveNuts 1y ago
  > how can you operate? It's much easier for huge, established companies to do this (easier to absorb because they already have huge teams of procurement specialists, lawyers, etc). I think that's at least part of the point in the first place.
danans 1y ago
> How can a company invest without any idea if the tariffs will be around in a year? They can invest in methods that will lower costs in a way that will outlast tariffs, like replacing/reducing domestic headcount with the more physical automation (for manufacturing work) and more AI-enhanced workflows (for white-collar work). In the short term, it could help offset the cost of the tariffs. In the long term, it lowers the need for human labor.

Aurornis 1y ago

It's going to take a while. Most companies ordered as much inventory as they could before the tariffs hit. Companies have to work through that lower-cost inventory first, then deal with the tariffs, then have that data start to show up in later decisions. There's also a lingering hope that the tariffs will be struck down and disappear, so companies are waiting as long as possible before taking the tariff hit on new orders.

lisbbb 1y ago
The handwringing is so amazing here, as is the denial of what needs to be done to stabilize the US economy, which is to bring more manufacturing home, create jobs organically, and stop relying on China, who is not our friend.
- dragon-hn 1y ago
  That may or may not be true. But what is immediately clear is that Trump has no idea how to accomplish it. Americans are in I believe 6 months of contraction in manufacturing jobs.
- axiolite 1y ago
  To reduce dependence on China, tariffs should ONLY be on China, and not the entire world including neighbors and close allies. To help bring manufacturing back to the US, the tariffs should have been fixed, in legislation, with 2+ years of advanced notice before implementation, to allow companies to plan for them and implement something. The ad-hoc approach taken by the current administration ensures 100% that neither of those will happen.
  - klipklop 1y ago
    To be fair China can rapidly setup factories in many countries or just use them as re-sellers. Heck many of the "Made in India" goods are just re-branded stuff from China. This is why the tariffs encompass everything, even remote deserted islands. If you don't tariff everywhere you leave a loophole open for China to potentially exploit. (Note I am not saying I 100% agree with the near-global tariffs, but I can see why they cover so many regions.)

HillRat 1y ago

One thing is that a lot of economic activity was front-loaded to the first few quarters as businesses scrambled to get inventory on board ahead of tariffs; now we're seeing companies having burned through inventory, so inflationary impacts are going to start working their way through the supply chain now in earnest, and we're going to see a concomitant slowdown in economic activity as that acts as a persistent drag across multiple sectors. In practice you're looking at something equivalent to a 3-4% federal sales tax on all purchases, but keep an eye on where it falls on relatively inelastic goods, which will have an outsize effect on consumer finances.

tmaly 1y ago

I think it is hard to say. With a new gamer in the BLS, maybe they are faking numbers to push a rate cut?