Author Topic: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!  (Read 1971 times)

Dicey

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How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« on: September 25, 2018, 09:38:03 AM »
DH and I are in the middle of flipping a house. Last Friday, we dropped almost $16k on flooring and appliances, including a washer and dryer, in advance of the tariffs kicking in. Today, I was poking around and found this article, which contains the full list of items effected. OH, SHIT!
This is going to hit all of us in ways big and small. Have any of you wise mustachians examined this issue? What are you stocking up on? I expected the durable goods, but the list of food items is huge!

https://www.businessinsider.com/trump-china-trade-war-list-of-goods-tariffs-2018-9

I'm a red panda

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #1 on: September 25, 2018, 09:40:33 AM »
I suspect voting in the midterm is something we all should do.

Megma

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #2 on: September 25, 2018, 09:53:00 AM »
When I read the subject of the thread my first thought was "don't buy anything" but I suppose house flipping materials are legit. :)

Dabnasty

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #3 on: September 25, 2018, 10:09:15 AM »
DH and I are in the middle of flipping a house. Last Friday, we dropped almost $16k on flooring and appliances, including a washer and dryer, in advance of the tariffs kicking in. Today, I was poking around and found this article, which contains the full list of items effected. OH, SHIT!
This is going to hit all of us in ways big and small. Have any of you wise mustachians examined this issue? What are you stocking up on? I expected the durable goods, but the list of food items is huge!

https://www.businessinsider.com/trump-china-trade-war-list-of-goods-tariffs-2018-9

There are quite a few foods on the list, but how much food do we actually import from China? I know we get lots of seafood and a quick search suggest mushrooms and apple juice imports are significant.

RetiredAt63

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #4 on: September 25, 2018, 10:42:41 AM »
Why is anyone surprised?  The US slapped all kinds of tariffs on Canada, and our economies are massively entwined.

cats

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #5 on: September 25, 2018, 10:44:26 AM »
DH and I are in the middle of flipping a house. Last Friday, we dropped almost $16k on flooring and appliances, including a washer and dryer, in advance of the tariffs kicking in. Today, I was poking around and found this article, which contains the full list of items effected. OH, SHIT!
This is going to hit all of us in ways big and small. Have any of you wise mustachians examined this issue? What are you stocking up on? I expected the durable goods, but the list of food items is huge!

https://www.businessinsider.com/trump-china-trade-war-list-of-goods-tariffs-2018-9

There are quite a few foods on the list, but how much food do we actually import from China? I know we get lots of seafood and a quick search suggest mushrooms and apple juice imports are significant.

I was wondering this too.  While it's a long list of foods in many cases I don't think Chinese imports are making up the bulk of US consumption?  If it does significantly impact grocery prices for items we regularly buy now, I'm sure we'll be refiguring our diet if an alternative option becomes cheaper, so the price increase to us might be less than the amount of the tariffs.

For the durable goods...I'm not going to start stockpiling, as these are items we use either infrequently or not at all.  I'm sure this will wind up costing me money in some way, BUT...finding space to store a stockpile will cost me too!  And it's possible that in the longer term either the tariffs will be reversed or manufacturing will move out of China. If I knew I was likely to need a bigger ticket item in the next 6 months or so, I might consider buying that, but further out, it just starts to seem like hoarding.

I think for mustachians with a high savings rate, these tariffs will likely eat at that, but aren't going to actually put any of us in the poorhouse.  I know my household could sustain a 25% increase in the cost of EVERYTHING we buy and still come out ahead.  For folks with a lower savings rate, the tariffs are obviously going to be more of a problem and require more lifestyle changes.

While I think these tariffs are poorly thought out, I do think we have an excess of cheap shit in this country.  I'm not so alarmed by the thought of things becoming more expensive, I am alarmed at the way the administration is implementing these but doesn't really seem to have a good plan in place to manage the impacts.

maizeman

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #6 on: September 25, 2018, 11:00:38 AM »
Well remember that we won't see the whole impact of the headline tariff percentage charge, part will be increases in price in the USA, part will be decreases in the prices chinese manufacturers (or farmers) are able to charge for the goods they are selling to the USA. That's why the Chinese tariffs on soybeans are driving down the prices US farmers are getting for their crop at the same time the price of soybeans (and food generally) is increasing in China.

About food. We don't important a lot of staples from China, it's mostly going to be seafood and some fruit and vegetables, particularly canned or frozen fruit and vegetables. The USA runs a vast calorie production surplus each year, but mostly in grains (wheat, rice, and corn), and non-seafood meats.

Still going to be interesting times for all of us. Good luck to everyone and keep your heads down.

BookValue

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #7 on: September 25, 2018, 11:14:25 AM »
Restaurant and pre-packaged food prices will be going up, as a significant amount of their inputs have been affected (equipment, napkins, hot cups and lids, checks, aprons, souffles, takeouts). The messed up part is a lot of domestic manufacturers of these items are taking the opportunity to raise their pricing rather than try and capture additional market share, defeating the purpose of the tariffs.

Ducknald Don

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #8 on: September 25, 2018, 12:12:08 PM »
The messed up part is a lot of domestic manufacturers of these items are taking the opportunity to raise their pricing rather than try and capture additional market share, defeating the purpose of the tariffs.

I don't expect they have the capacity to ramp up production quickly so raising prices makes some sense.

Johnez

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #9 on: September 25, 2018, 12:36:05 PM »
Restaurant and pre-packaged food prices will be going up, as a significant amount of their inputs have been affected (equipment, napkins, hot cups and lids, checks, aprons, souffles, takeouts). The messed up part is a lot of domestic manufacturers of these items are taking the opportunity to raise their pricing rather than try and capture additional market share, defeating the purpose of the tariffs.

I would think prices will eventually stabilize. High prices bring in more competition which will eventually drive prices back down as they all try to win business.

sequoia

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #10 on: September 25, 2018, 01:35:18 PM »
I suspect voting in the midterm is something we all should do.

+1. This is what happen when the person is charge is a moron. We all pay for the consequences.

I sometime hope that we have more tariffs and have trade wars with everyone. I hope the consequences is very hard for everyone who voted for the person who is in charge right now. Hopefully there is a lesson learned here, and the impact is bad enough that there will not be a second term. ~2 more years, lets see how messed up we can get.

This is going to hit all of us in ways big and small. Have any of you wise mustachians examined this issue? What are you stocking up on? I expected the durable goods, but the list of food items is huge!
Cash. I have a feeling there will be another round of housing crash, and I want to be in position to buy a few more for investment.
« Last Edit: September 25, 2018, 01:38:43 PM by sequoia »

jim555

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #11 on: September 25, 2018, 01:59:30 PM »
Walmart said they are going to pass on the price increases.  I have already seen it on some items.  It is going to shock a lot of people.

RetiredAt63

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #12 on: September 25, 2018, 03:42:55 PM »

I sometime hope that we have more tariffs and have trade wars with everyone. I hope the consequences is very hard for everyone who voted for the person who is in charge right now. Hopefully there is a lesson learned here, and the impact is bad enough that there will not be a second term. ~2 more years, lets see how messed up we can get.

Unfortunately this is also going to be hard on the economies of Canada and the EU (previous new tariffs) and whoever else is getting hit, and none of us have any say in American politics.  However, I know Canada has imposed new tariffs on American goods, and I imagine the EU has as well, so this is also going to affect the American economy.  The world is just so intertwined.

sequoia

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #13 on: September 25, 2018, 03:48:51 PM »

I sometime hope that we have more tariffs and have trade wars with everyone. I hope the consequences is very hard for everyone who voted for the person who is in charge right now. Hopefully there is a lesson learned here, and the impact is bad enough that there will not be a second term. ~2 more years, lets see how messed up we can get.

Unfortunately this is also going to be hard on the economies of Canada and the EU (previous new tariffs) and whoever else is getting hit, and none of us have any say in American politics.  However, I know Canada has imposed new tariffs on American goods, and I imagine the EU has as well, so this is also going to affect the American economy.  The world is just so intertwined.

I agree. Unfortunately there will be people who can not vote but will see the impact of tariffs.


maizeman

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #14 on: September 25, 2018, 05:24:31 PM »
NPR story which was playing on the ride home emphasizes that precisely because everyone is expecting these tariffs to be temporary, the price increase is going to be worse. If US manufacturers expected the tariffs to be around for years, they'd be busy investing in more infrastructure/factories/robots to increase domestic production right now.

But since they're assuming this is a temporary measure, instead they're just raising prices on the limited about of "made in the USA" items they already are set up to produce.

RetiredAt63

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #15 on: September 25, 2018, 05:28:16 PM »
Why do they think they are temporary?  and define temporary? 6 months? One year? two years?  From here some of it looks like pressure to cave on some of the NAFTA terms.

maizeman

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #16 on: September 25, 2018, 05:34:09 PM »
Well this was specifically about the China tariffs that just went into effect, and I would imagine temporary means "the tariffs will probably be gone before they can make enough money to pay for the cost of expanding their factories."

That is going to vary by the specific product and manufacturer, but I'm going to guess we're talking at least several years to make it cost effective to rev up domestic production of most manufactured goods. The specific example in the article was a US factory that makes cabin air filters for cars.

Bateaux

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #17 on: September 25, 2018, 05:46:06 PM »
I've upped my needed Amazon Prime purchases lately.  I hope to meet the price increases with fewer purchases.  It will hurt lower income people the most.  Unfortunately most of them won't vote their own best interest.

accolay

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #18 on: September 25, 2018, 06:01:22 PM »
So, how long before this crashes the economy? Or will it? Or will it just tend to squeeze those who can't go without?

maizeman

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #19 on: September 25, 2018, 06:09:10 PM »
I vote squeezing but not breaking.

The newest batch of tariffs is 10% on $200B worth of imports. If absolutely none of it gets passed on to Chinese manufacturers in the form of lower prices and all of it ends up being paid by US consumers, we're talking about $20B in tariffs or about $60/person/year in extra spending per year. After it increases to 25% at the end of the year, we're talking $150/person/year.

Do I have that right? Feels like I must have dropped a zero somewhere, but if so I haven't been able to find it after triple checking.

accolay

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #20 on: September 25, 2018, 06:15:25 PM »
I vote squeezing but not breaking.

Then perhaps it could be one more straw to the list of things that will break our economic back?

Bateaux

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #21 on: September 25, 2018, 06:41:13 PM »
It's a way to have a massive tax increase following a massive tax ease.

maizeman

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #22 on: September 25, 2018, 07:01:41 PM »
Quite possibly. More and more straws piling up. And economies do tend to break sooner or later.

familyandfarming

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #23 on: September 30, 2018, 09:06:15 PM »
My husband is a farmer. His income is down 20% from last year because of the tariff war. https://www.desmoinesregister.com/story/money/agriculture/2018/06/15/china-tariffs-soybeans-could-cost-iowa-farmers-up-624-million/705121002/

Farm income has gone down 49% from 2013-2017. And this article was written in 2017 BEFORE the tariff war!
https://agfax.com/2017/09/27/u-s-net-farm-income-down-49-since-2013/

Johnez

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #24 on: September 30, 2018, 11:54:48 PM »
My family's in the furniture business. If you wanted to kill a struggling American manufacturing sector, I'd say putting tariffs on all the raw materials you can find is a good way to do it. Fabric, springs, and wood prices have all skyrocketed. Even foam which is USA made is facing a 24% price increase. This isn't even touching on the finished products they resell. I'm pretty shocked Trump has been given free reign on this. Is he going to subsidize every industry he destroys with the trade war that's so easy to win? Farmers get theirs, what about all the small manufacturers that'll struggle? No voice for the little man when big hustling serial bankrupt New York billionaire baby is in office. When will people wake up. The 800 Carrier jobs saved is a joke compared to the wasteland left behind.
« Last Edit: September 30, 2018, 11:56:23 PM by Johnez »

sequoia

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #25 on: October 03, 2018, 01:31:16 PM »
My family's in the furniture business. If you wanted to kill a struggling American manufacturing sector, I'd say putting tariffs on all the raw materials you can find is a good way to do it. Fabric, springs, and wood prices have all skyrocketed. Even foam which is USA made is facing a 24% price increase. This isn't even touching on the finished products they resell. I'm pretty shocked Trump has been given free reign on this. Is he going to subsidize every industry he destroys with the trade war that's so easy to win? Farmers get theirs, what about all the small manufacturers that'll struggle? No voice for the little man when big hustling serial bankrupt New York billionaire baby is in office. When will people wake up. The 800 Carrier jobs saved is a joke compared to the wasteland left behind.

Sadly, probably not until the economy crashed like in 08. Even then, his supporters probably will blame someone else.

I hope that this is not the case, I lost my job at that time. Hopefully sooner than later people start to see that his economic policy is destroying everything so we are not getting second term of this mess.
« Last Edit: October 03, 2018, 02:04:48 PM by sequoia »

GuitarStv

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #26 on: October 03, 2018, 01:33:34 PM »
It's important to remember as the prices climb that trade wars are good and easy to win.

I'm a red panda

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #27 on: October 03, 2018, 01:55:39 PM »
My family's in the furniture business. If you wanted to kill a struggling American manufacturing sector, I'd say putting tariffs on all the raw materials you can find is a good way to do it. Fabric, springs, and wood prices have all skyrocketed. Even foam which is USA made is facing a 24% price increase. This isn't even touching on the finished products they resell. I'm pretty shocked Trump has been given free reign on this. Is he going to subsidize every industry he destroys with the trade war that's so easy to win? Farmers get theirs, what about all the small manufacturers that'll struggle? No voice for the little man when big hustling serial bankrupt New York billionaire baby is in office. When will people wake up. The 800 Carrier jobs saved is a joke compared to the wasteland left behind.

You don't have anyone in Congress who can benefit from the subsidy.  Both democrats and republican farmers in Congress are benefiting from the bailout.  It's a shame for your family that none of them are furniture makers.

Just Joe

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #28 on: October 04, 2018, 08:56:09 AM »
I rushed an ebike purchase because of coming 25% tariffs. It was a purchase that I was planning to make anyhow but a pointless 25% tax on a $1200 bike is alot of damn money.

I'll be extremely surprised if anyone opens an ebike factory in the USA because of these tariffs. I'd guess that all ordinary bicycles sold in the USA are made in China. Ages ago I bought a Trek thinking WAHOO! made in Wisconsin.

Nope, only the high end Trek bikes are made in Wisconsin. The bread-and-butter bikes are made in China to Trek specs and sold everywhere.

I guess anything that slows bicycle and ebike purchases by Americans is okay with the conservative political mechanism. After all, they'd prefer us all to burn more gasoline, more diesel and more coal.

I'm still befuddled why our country put this clown in the WH.

Johnez

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #29 on: October 04, 2018, 04:19:33 PM »
^Was tempted to pull the trigger on a Juiced Crosscurrent S myself. Kinda glad I didn't, as I got canned at my job shortly after.

What you described however seems to be an excellent opportunity for American entrepreneurs as the details shake out. I'm fairly certain parts of ebikes aren't subject to the tariffs, perhaps sending ebike motors and batteries to Mexico and have em assembled there would keep costs down. There are capitalists hard at work trying to game or find loopholes in the system, I'm sure competition will again stiffen up and bring prices down.

 It's a shame the amount of friction these tariffs bring on businesses and how efficiency is being dragged down with this stupid nonsense of bringing '50s era jobs back to the USA... With these jobs numbers coming back spectacularly over the estimated amount maybe the trade war is paying off though. Hmm.

sequoia

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #30 on: October 09, 2018, 02:52:29 PM »
Tariffs cost Ford $1 billion in profit and hurt sales in China

https://www.cnbc.com/2018/09/26/tariffs-cost-ford-1-billion-in-profit-and-hurt-sales-in-china.html

I am wondering how long it will take before there is enough pressure to easy of tariffs, but if that means it will ensure no second terms, I am all for as much tariffs as he can come up with....

scottish

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #31 on: October 09, 2018, 03:54:30 PM »
We're switching from buying American as our preference to actively avoiding spending any money in the US.

Especially on dairy.   I hear bad things about US dairy products.

RetiredAt63

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #32 on: October 09, 2018, 05:58:17 PM »
We're switching from buying American as our preference to actively avoiding spending any money in the US.

Especially on dairy.   I hear bad things about US dairy products.

It is amazing the number of people who have mentioned to me that they are doing this.  For months now, ever since the NAFTA fuss started and the G8 mess.

GuitarStv

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #33 on: October 09, 2018, 06:58:59 PM »
We're switching from buying American as our preference to actively avoiding spending any money in the US.

Especially on dairy.   I hear bad things about US dairy products.

It is amazing the number of people who have mentioned to me that they are doing this.  For months now, ever since the NAFTA fuss started and the G8 mess.

Oddly enough, it came up at at our thanksgiving dinner too.  My mom, sister, and wife all mentioned that they had been avoiding American products whenever possible.

RetiredAt63

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #34 on: October 10, 2018, 06:24:44 AM »
We're switching from buying American as our preference to actively avoiding spending any money in the US.

Especially on dairy.   I hear bad things about US dairy products.

It is amazing the number of people who have mentioned to me that they are doing this.  For months now, ever since the NAFTA fuss started and the G8 mess.

Oddly enough, it came up at at our thanksgiving dinner too.  My mom, sister, and wife all mentioned that they had been avoiding American products whenever possible.

I wonder if this will show up in this year's trade stats.  The exchange rate sucks as well, but it has sucked for a while now.

Johnez

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #35 on: October 11, 2018, 11:23:48 AM »
Glad to hear this small subset of Canadians are voting with their cash. I don't hope for bad things on anyone, but hope those who feel impacted by idiotic policies have the chance to speak up. Good for you guys.

Trump's new plan to bail out farm states like Iowa, more ethanol in our gas. Awesome. It seems we're on a path now that demands knocking every dang mole that pops up as a result of the forward thinking tradewars.


RetiredAt63

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #36 on: October 11, 2018, 01:18:05 PM »
Glad to hear this small subset of Canadians are voting with their cash. I don't hope for bad things on anyone, but hope those who feel impacted by idiotic policies have the chance to speak up. Good for you guys.


It's like not buying clothes made in sweat shops.  You can't stop it, but you can not support it.

bacchi

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #37 on: October 11, 2018, 01:45:59 PM »
It's important to remember as the prices climb that trade wars are good and easy to win.

And as the markets drop, it's all the Fed's fault.

If we abolish the Fed, and have trade wars with China and Canada, we can't lose. So much winning!

Dicey

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #38 on: October 12, 2018, 01:39:16 AM »
It's important to remember as the prices climb that trade wars are good and easy to win.

And as the markets drop, it's all the Fed's fault.

If we abolish the Fed, and have trade wars with China and Canada, we can't lose. So much winning!
LOL!

ender

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #39 on: October 12, 2018, 06:54:08 AM »
My husband is a farmer. His income is down 20% from last year because of the tariff war. https://www.desmoinesregister.com/story/money/agriculture/2018/06/15/china-tariffs-soybeans-could-cost-iowa-farmers-up-624-million/705121002/

Farm income has gone down 49% from 2013-2017. And this article was written in 2017 BEFORE the tariff war!
https://agfax.com/2017/09/27/u-s-net-farm-income-down-49-since-2013/

Taking the peak year and saying that things are down compared to then is a bit misleading. https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/farming-and-farm-income/

Net farm income is only down slightly compared to the 2005-2010 timeframe. It is down some but not 49% since then. This is of course an aggregate for all the USA, not necessarily your specific situation.

Also note that there are similar complains regarding real salary growth for a long time period, too.

trollwithamustache

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #40 on: October 12, 2018, 08:17:27 AM »
Keep in mind Tariffs are a bit of a game.  There have been punitive tariffs on Chinese pipe for years, so many companies have some piece cutting done and then just import "partially finished Equipment" instead of pipe...  the end effect may not be such a big deal. 

RetiredAt63

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Re: How to Lessen the Impact of New Tariffs? It's Going to Be UGLY!
« Reply #41 on: October 12, 2018, 10:15:46 AM »
You can force a product to be available but you can't hide where it comes from and you can't force people to buy.