And when local manufacturers see increased demand and see people still buying the products with tariffs on them, they’ll also increase the price of their items and if production moves from China to the US then production cost will be higher so process will be higher.
You guys wanted inflation, right?
Stop. Maybe I understand it all wrong?
I thought that those “tariffs” were just an additional tax to customers for buying foreign stuff. It has absolutely nothing to do with producer of that stuff. Just customers pay price, pay tax-tariffs and then government pocket tax-tariffs and pass-through the price to the manufacturer.
What he is talking about? He sounds like Captain Obvious.
Machine parts are purchased from all over the world , some parts actually cross borders multiple times during production and may incur tariffs.
What he is saying is the US customers will be charged those tariffs as normal, but if a customer from the UK (or any country) buys the item the tariffs will be added as a pooled cost of production of those items sold in the USA .
Other countries will buy item at usual, price.
USA customers buy it at usual price, plus Trumps tariff, plus a portion of the pooled global increased production cost due to tariffs.
This is because outside the USA their global competitors, selling to France for example, will be mostly tariff free. Companies will need to do this in order to stay competitive with global companies that are producing and selling items, mostly tariff free, outside of the USA.
Its a tax the importer has to pay. Just like you pay shipping, if you order something abroad, you also pay tariffs.
He is either just making that clear, or they have a subsidiary in the US importing their own engines.
If you’re an importer or manufacturer-importer, you can choose to take a lower profit margin or make a loss to maintain the same final price. If the market is dominated by domestic competitors, you might need to do this to maintain sales.
If there’s no significant domestic competitors, they’re too small to sway the market, or they’re also forced to raise prices due to tariffs on their supply chain, the price the market will bear goes up.
But I agree: it looks like it’s mostly trying to beat the idea into farmers’ thick MAGA skulls.
They can choose to take a hit to their profit margins by adjusting prices. They can only do that so much before margins are wiped out completely. This time tariffs are much broader and higher.
Why? In some cases they may make up for it with higher volume (but that too depends on demand). This applies to exporters, wholesalers and retailers. Or they may not be find any place else to export to (or sell locally).
I read a paper on this recently but can’t find it :(, apparently with steel (during Trump-I) the exporters were more willing to do it but it’s not the case with every good.
Lots of companies handle the domestic importing into distribution centers, so they pay the tax and sell in domestic currency. Otherwise the consumer has to pay in foreign currency and pay out the ass for shipping individual items.
Idk if that’s the case for this company.
But the point is: whoever does the importing, there’s a pressure for the manufacturer to drop prices in order to compete. And they’re saying they’re not gonna budge.
It is obvious if you’ve been paying attention, but it’s still counter to what Trump has been saying will happen.
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Pay up, ihr Grattler
😱
