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Few thoughts/observations on Tariff impacts now that we have a decent amount of time/data to look at: Suppliers in China are dropping prices to offset the tari
by tgtweak 9mo ago
Few thoughts/observations on Tariff impacts now that we have a decent amount of time/data to look at:
Suppliers in China are dropping prices to offset the tariff impact - this is what I see in my direct industry and also in many adjacent ones. This is benefitting other countries that don't have Tariffs on Chinese goods since they can buy cheaper as well. I suspect this is a significant factor in the GBP/EUR strengthening in relation to USD. There was a point where there was such a pronounced impact to imported goods that the cost of shipping a container from China to US went from ~$3500 to <$1500 pre/post Tariff.
Large manufacturers (automotive certainly, but also raw materials production and component production) are actually moving facilities to the US, which was one of the intended effects.
US manufacturers are enjoying some price relief as landed costs of chinese-produced goods are increasing. Hard to quantify what this means but the frustrating part is that they are not reducing their prices just enjoying higher margins.
Countries outside the Tariff zone are enjoying more trade - Canada is a very real example of this policy backfiring - they just walked back the Chinese Automotive Tariffs in exchange for relief on agricultural reciprocal tariffs. Mexico is entering into similar agreements with non-US trade partners. Some products are releasing in non-US markets first and at lower costs than they are in the US.
US-sourced chipmaking is accelerating - Intel's new fabs are probably the most prominent example of this (albeit they are slow to pick up volume - I expect this will shift with TSMC rationing production to brands like Apple and Qualcomm).
I think the increase in cost to consumers is painful and that the current Tariff rates are excessive + there is a lot of "cheating" where Chinese suppliers are declaring lower cost of goods on import to reduce the landed cost of Tariffed goods - there doesn't appear to be enough resources to police this policy fully.
All in all an interesting economic experiment and it will certainly take years for any of these realities to have a measurable positive impact domestically.
- ASinclair 9mo agoThere are tariffs on every country, not just China. This isn’t like his first term in office. Can you speak to the impacts of those tariffs?
- tgtweak 9mo agoLooking purely at import volumes, most of those other countries haven't experienced drop-offs like China. Canada exports about the same amount of goods to the US today as they did in early 2024. Mexico is in a similar trend. What I see is that when Chinese buying dipped due to exorbitant tariffs, Canada and Mexico spiked until they were also hit with tariffs, returning to their previous levels.
- carlosjobim 9mo ago> This is benefitting other countries that don't have Tariffs on Chinese goods since they can buy cheaper as well. What countries are those? As far as I know, most important markets have great tariffs on Chinese goods.
- tgtweak 9mo agoMost have low/no duties on most goods categories from China - aside from a few specific goods categories in developed markets - most goods flow out of China to export countries without tariff/duties. ASEAN markets and most of Africa have zero tariffs. I don't think there are any developed markets (which are China's main export destinations) with double-digit tariff averages except India. Using Germany as an example... Electronics (hs code 85) is 0-6% tariffs on Chinese origin goods (averages out under 2%), and has been that way for a while. US on the other hand is now 7.5-27.5% where it was previously 0-4%. While they aren't "no tariffs", an average ~2% tariff across all imported goods is very small compared to what is shelved in the US. ASEAN is almost entirely no tariff. So when the US is high teens/low 20's average tariff and the rest of the developed world is 0-5%, that's essentially zero as far as market pressure is concerned. Chinese imports to the US is down to 8% in October 2025, compared to >13% prior to recent trade policy changes. In the same period, EU imports from China have grown 5%. My point remains that US exerting import pressure on China is benefitting the rest of the world's buying power with China, at it's expense.
- carlosjobim 9mo agoWhen I import Chinese goods to Europe as a consumer, I have to pay a 25% VAT, which functions as a tariff. It is officially a tariff as far as the government is concerned, as it is collected by customs and not by internal revenue. That is of course paired by the fact that domestic products also have the same VAT to be paid by consumers, but domestic producers are reimbursed their VAT expenses to varying degrees depending on their business model, while there is no such function for foreign imports. All in all the VAT functions as a tariff as far as the exporter is concerned, in my understanding. > My point remains that US exerting import pressure on China is benefitting the rest of the world's buying power with China, at its expense. I agree with that, and can't for my life understand why foreign nationals rage so incessantly against the US tariffs. The expected outcome is that those consumers get to enjoy cheaper imports from China and from each others, as companies need to find new export markets. Or even cheaper domestic goods as domestic companies have to unload produce which isn't getting exported.
- badc0ffee 9mo agoInteresting comment but I have to ask why you keep capitalizing "Tariff".