Almost impossible to run a business when tariffs could move +/- 20% per day (this is the second day in a row).
If I was shipping stuff to the US from china I would just not until this is resolved. I wonder if therefore instead of price increases we actually just see supply shortage (which would actually play better with voters too, incidentally) and a burgeoning "grey" market for trans-shipped IPhones and so on.
Realistically you'd end up chosing between finding the product from another country, trans-shipping or just being out of stock until they come down wouldn't you? Is someone buying a $100 pair of shoes really going to pay $240?
> If I was shipping stuff to the US from china I would just not until this is resolved.
If I were shipping stuff to the US from China, I would keep doing it as long as stuff gets ordered. I wouldn't be the one paying the tariffs, after all, so on that count nothing changes regardless of the tariff rate. The importers US-side pay the tariff, so the effect on me would be reduced orders, but there's no reason not to continue to fulfill whatever orders I get.
Apologies, the implication is fuzzy there. I am thinking from the perspective of a multinational like for example apple who would be both exporter and importer. FOB shipping is typically only for smaller businesses.
There are many Americans that simply don't want to understand. It's really easy to come up with bullshit explanations like:
"Communist China is retaliating against our tariffs by raising prices instead of accepting a fair trade by lowering their excessive profit margins!"
"Leftist companies are price-gouging hardworking Americans by increasing the profits on their cheap Chinese goods! These greedy middlemen are doubling the price of goods from China and pocketing the difference!"
The reality is that both the manufacturing side in China and the retail side in the US have roughly 50% gross margin, each, on many products, but they also have many other expenses leading to a much lower realized profit.
But it will be easy to contrive an example of a $5 widget, sold by China at $10 for a 50% gross profit, which is now $24.50 with import duties, and $49 at retail for the retailer's 50% margin. So the price at retail increased from $20-ish to $49, and you can claim that the retailer increased their profit from $10 to $29 (even though it's the same by percentage). And you can claim that all these greedy middlemen should accept "reasonable" profits, i.e. $5 + 10% = $6 + 145% = $14.70 + 10% = $16.17. So the price "should" even go down if profits were "reasonable".
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[ 3.7 ms ] story [ 45.8 ms ] threadIf I was shipping stuff to the US from china I would just not until this is resolved. I wonder if therefore instead of price increases we actually just see supply shortage (which would actually play better with voters too, incidentally) and a burgeoning "grey" market for trans-shipped IPhones and so on.
Most small businesses don’t have enough stock to last.
Realistically you'd end up closing shop. It's not like the tariffs on other countries aren't coming back.
> just being out of stock until they come down
You still believe in that? Like 4 years later when there's a new president?
> Is someone buying a $100 pair of shoes really going to pay $240?
Is there a choice? Maybe ask the US president? Will there still be a pair of shoes not paying tariffs and will be cheap? Made in America ain't cheap.
If I were shipping stuff to the US from China, I would keep doing it as long as stuff gets ordered. I wouldn't be the one paying the tariffs, after all, so on that count nothing changes regardless of the tariff rate. The importers US-side pay the tariff, so the effect on me would be reduced orders, but there's no reason not to continue to fulfill whatever orders I get.
> FOB shipping is typically only for smaller businesses.
I wasn't thinking of FOB shipping specifically.
"Communist China is retaliating against our tariffs by raising prices instead of accepting a fair trade by lowering their excessive profit margins!"
"Leftist companies are price-gouging hardworking Americans by increasing the profits on their cheap Chinese goods! These greedy middlemen are doubling the price of goods from China and pocketing the difference!"
The reality is that both the manufacturing side in China and the retail side in the US have roughly 50% gross margin, each, on many products, but they also have many other expenses leading to a much lower realized profit.
But it will be easy to contrive an example of a $5 widget, sold by China at $10 for a 50% gross profit, which is now $24.50 with import duties, and $49 at retail for the retailer's 50% margin. So the price at retail increased from $20-ish to $49, and you can claim that the retailer increased their profit from $10 to $29 (even though it's the same by percentage). And you can claim that all these greedy middlemen should accept "reasonable" profits, i.e. $5 + 10% = $6 + 145% = $14.70 + 10% = $16.17. So the price "should" even go down if profits were "reasonable".
So retail price goes from $20 to $50-ish.