Price Gougers Are Exploiting Trump’s Tariffs
Price Gougers Are Exploiting Trump’s Tariffs
“Price optimization” consultants are helping clients capitalize on Trump’s chaotic tariff rollout by using surveillance pricing tools, while Republican FTC chair Andrew Ferguson is reversing efforts to keep them in check.
We all knew this was going to happen.
Going to get another earful from some The Economist/WSJ Op-Ed about how this is totally awesome and signals economic resiliency and if you don't like paying $15 for eggs or $100 for a piece of plywood or $4000 for a used refrigerator then you're an uneducated goof who shouldn't be allowed to make decisions.
Truly, I think one of the big reasons that Harris' campaign failed was repeating the "best economy ever" line while so many were struggling under inflation.
Both The Economist and the Wall Street Journal have been quite critical of the tariffs. Not only that, but those articles have been posted here.
Yup. Duh. Studies show that when tariffs cause foreign product prices to rise, rather than leaving their prices the same, US brands raise theirs to match because they don’t want their product to seem cheaply made. (But also price gouging)
I tried to find the video I watched about it, but I watched it pre-US Election. The internet is flooded with more recent tariff videos.
I think it was by Vox Media and it was specifically about tariffs or inflation, more generally.
US brands raise theirs to match because
they don’t want their product to seem cheaply made. (But alsoprice gouging
What company needs to hire a consultant to tell them to raise prices? For $100 I'll tell you to raise your prices 10%.
You should charge $200.
Now you owe me $500.
You should charge $1000.
After you pay the $2000 you owe me, that is.
Making people poor is the whole point of this thing.
Filtering money from poor people into the pockets of rich people, and also feeding the war machine funds.
I was reading an article talking about how the people most-severely being taxed by the tariffs are relatively poor. First, tariffs are a regressive tax anyway --- it's a tax roughly linked to consumption. Consumption taxes are regressive anyway, and I've talked about that.
https://en.wikipedia.org/wiki/Consumption_tax
Flat consumption taxes are regressive (shift the tax burden to the less well-off). The ratio of tax obligation to income tends to shrink as income increases because high-earners tend to consume proportionally less of their income.[25] An individual unable to save will pay taxes on all his income, but an individual who saves or invests a portion of his income is taxed only on the remaining income.
But secondly, what the article was pointing out was that it'll hit inexpensive household goods out of China, stuff like clothing and whatnot, and the people who get whacked by that the hardest are people buying inexpensive everyday items.
It's kind of amazing, actually. West Virginia was the most pro-Trump state in the elections. But they have the highest rate of Medicaid dependence, something that will take a hit, and then they're going to take a clobbering from tariffs on inexpensive items. The tax cuts that Trump's passing that all this is paying for are principally for the wealthy, aren't going to be very helpful for them.
Yup, and they are all too stupid to understand thanks to the erosion of America's education system. I'm seeing the same in Canada, and it's the worst. They don't even have grades in school anymore.
I guess if you look at the track record of how tariffs have played out in the past, there has tended not to be a lot of price relief in going with domestic producers.
Take something like aluminum. While the US does have a domestic industry, it couldn't possibly meet demand in the short term at least. So industries hoping to source aluminum may initially flock to the domestic product, causing a run on it that raises prices. At the end of the day, they'll wind up paying something close to what the imported aluminum costs. This is the new price of aluminum. Live with it.
In the long term, the domestic industry may grow to the point that it displaces the imports. Will that lead to price relief? Again, uncertain. There are reasons why certain parts of the world produce much of the world supply of X, and cost of production is one of them. Also, counter-tariffs may reduce the growth potential of a domestic industry, leading to less investment.
It's not just the US of course. Everyone everywhere will be paying more for everything. Tariffs just suck.
It’s not just the US of course. Everyone everywhere will be paying more for everything. Tariffs just suck.
How exactly will somebody in, for example, the EU, pay more if the US are putting high tariffs on imported Aluminium?
Absolutelly, behind the tariff wall (i.e. inside the US), imported Aluminium will be more expensive (since there the imported stuff costs original price + tariff and the local stuff will tend to rise towards than value), but outside, people are still paying for it tariff free (so the original price with no extras). In fact, it's quite possible prices outside the US will go down for some things were, seeing reduced demand from the US for their product due to US Tariffs, Producers lower prices to try and attract more customers outside the US.
The only things that would go up for that example EU customer from US Tariffs would be US-made products and services hit by EU counter-Tariffs and those represent a small fraction of what people in the EU buy, whilst, because of the "against everybody" way Trump raised Tariffs, US consumers will see price rises on everything imported, not just stuff from a single country.
The main impact of US Tariffs outside the US is not making purchasers pay more for stuff (since those outside do not pay that tariff), it's making companies in areas where there was a lot of exporting to the US sell less because there is less demand from the US (which either hits them directly if they were exporting to the US or indirectly if their competitiors were and are now forced to try and sell more in other markets hence competing harder with them).
Don't discount good old fashion price gouging either. Even if you could keep up with demand and keep your prices way under the tariffed foreign goods, why would you? If you are the only domestic alternative, bump your prices to just under your competitors.
Tariffs have a place in growing and protecting industry, but it has to be targeted. These sweeping country wide tariffs on all products are economical suicide
In the long term, the domestic industry may grow to the point that it displaces the imports
That's there idea, but the on-again-off-again tariffs policy creates such an uncertainty and lack of customer demand nobody wants to invest.
Duh.
Yeah, I mean the government is a representation of the people. Not a real surprise there.
