Tariffs and Potential Inflation

[brymoore]

You taking into account 16% inflation into the performance you are smiling about?

2021-2024 was 16% cumalative inflation
2016-2020 was 8%

Makes a big difference in ROI.

The $3T in deficit spending that occurred in 2020 would create inflation in 2021 and later years.

 

[Nick87]

The $3T in deficit spending that occurred in 2020 would create inflation in 2021 and later years.

That can't be...inflation is down.

 

[SAJ-99]

You taking into account 16% inflation into the performance you are smiling about?

2021-2024 was 16% cumalative inflation
2016-2020 was 8%

Makes a big difference in ROI.

S&P nominal total return
Since 11-24-2019 103.85%
Since 1-1-2021 67%

I'm not worried. The billionaires in charge have my back. If they have to make a choice between those returns and 16% or 20% cumulative inflation and the average American's pocketbook, I know what they will choose.

That can't be...inflation is down.

You are confusing nominal prices with the rate of inflation.

 

[Forkyfinder]

The $3T in deficit spending that occurred in 2020 would create inflation in 2021 and later years.

No disagreement. The spending that happenened in 2021 made it worse.

 

[Nick87]

You are confusing nominal prices with the rate of infation

Maybe or maybe I'm just casting bait.

 

[Bonasababy]

Reality bites, for those who refuse to accept it....

https://www.reuters.com/world/us/does-trump-really-want-compare-now-four-years-ago-2024-10-30/

I will ask again, what metric to people want to return to?

 

[Bonasababy]

There's a video that explains it better than I can, but I can't find it. But if in 2021 you gained 18 lbs 2022 you gained 9lbs and in 2023 you gained 4 lbs

Your not up 4lbs your up 31lbs

 

[Rie Bread]

Reality bites, for those who refuse to accept it....

https://www.reuters.com/world/us/does-trump-really-want-compare-now-four-years-ago-2024-10-30/

I will ask again, what metric to people want to return to?

$5 ft longs ? $1 mcchickens?

 

[Sytes]

Interesting content shared by John F. Kennedy when he signed Congress' Trade Expansion Act that gave Presidential powers to set tariffs:

"Today I am signing H.R. 11970, the Trade Expansion Act of 1962.

This is the most important international piece of legislation, I think, affecting economics since the passage of the Marshall plan."

Since, I bet he's rolled in his grave too many times to count.

Biden's Statement regarding his administration's tariffs (May 14, 2024);

"American workers and businesses can outcompete anyone—as long as they have fair competition. But for too long, China’s government has used unfair, non-market practices. China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security. Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities."

• The tariff rate on certain steel and aluminum products under Section 301 will increase from 0–7.5% to 25% in 2024.
• The tariff rate on semiconductors will increase from 25% to 50% by 2025.
• The tariff rate on electric vehicles under Section 301 will increase from 25% to 100% in 2024.
• The tariff rate on lithium-ion EV batteries will increase from 7.5%% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The tariff rate on battery parts will increase from 7.5% to 25% in 2024.
• The tariff rate on natural graphite and permanent magnets will increase from zero to 25% in 2026. The tariff rate for certain other critical minerals will increase from zero to 25% in 2024.
• The tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024.
• The tariff rate on ship-to-shore cranes will increase from 0% to 25% in 2024.
• The tariff rates on syringes and needles will increase from 0% to 50% in 2024. For certain personal protective equipment (PPE), including certain respirators and face masks, the tariff rates will increase from 0–7.5% to 25% in 2024. Tariffs on rubber medical and surgical gloves will increase from 7.5% to 25% in 2026.

Crickets then...


Since,

 

[jryoung]

Interesting content shared by John F. Kennedy when he signed Congress' Trade Expansion Act that gave Presidential powers to set tariffs:



Since, I bet he's rolled in his grave too many times to count.

Biden's Statement regarding his administration's tariffs (May 14, 2024);

"American workers and businesses can outcompete anyone—as long as they have fair competition. But for too long, China’s government has used unfair, non-market practices. China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security. Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities."

• The tariff rate on certain steel and aluminum products under Section 301 will increase from 0–7.5% to 25% in 2024.
• The tariff rate on semiconductors will increase from 25% to 50% by 2025.
• The tariff rate on electric vehicles under Section 301 will increase from 25% to 100% in 2024.
• The tariff rate on lithium-ion EV batteries will increase from 7.5%% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The tariff rate on battery parts will increase from 7.5% to 25% in 2024.
• The tariff rate on natural graphite and permanent magnets will increase from zero to 25% in 2026. The tariff rate for certain other critical minerals will increase from zero to 25% in 2024.
• The tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024.
• The tariff rate on ship-to-shore cranes will increase from 0% to 25% in 2024.
• The tariff rates on syringes and needles will increase from 0% to 50% in 2024. For certain personal protective equipment (PPE), including certain respirators and face masks, the tariff rates will increase from 0–7.5% to 25% in 2024. Tariffs on rubber medical and surgical gloves will increase from 7.5% to 25% in 2026.

Crickets then...

View attachment 349894
Since,

Then, no praise from the right for attempting to protect American interests, just gripes about inflation.
Now, no praise from the left for attempting to protect American interests, just gripes about inflation.

It'd be an amazing A/B test to throw this out on socials with each President's name behind it.

 

[Sytes]

Then, no praise from the right for attempting to protect American interests, just gripes about inflation.

Regarding the tariffs Biden enacted, they reviewed Trump's tariffs, kept them, and made increases.

As for Republican response? You're mistaken.

https://www.npr.org/2024/05/15/1251510179/republicans-called-for-a-tough-stance-on-china-are-they-happy-with-new-tariffs

 

[jryoung]

Show me an article that links "Bidenflation" to his and/or Trump's tariffs....by and large it was crickets.

As “Bidenflation” Robs Workers’ Wages, Biden Wants to Send Them a Bigger Tax Bill – Ways and Means

waysandmeans.house.gov

 

[Sytes]

Your comment;

Then, no praise from the right for attempting to protect American interests, just gripes about inflation.

This... is your comment. That is my response.

 

[Sytes]

I'll add: Had this not initially started by a Republican President, I believe this and 90% of other political hot topics would fit perfectly with @jryoung initial comment. Hence, my blue thumbs up.
Seems the common trench theme.

 

[VikingsGuy]

I understand it is politically inconvenient, but actually it is.

 

[VikingsGuy]

At the very most, high tariffs may try to save some existing on-shore manufacturing jobs, but they can’t create meaningful new on shore jobs, because supporting supply chains aren’t present, inexpensive labor is not present and the rising prices actually reduce sales volume and the external competition still has the volume capacity and supply chain to meet the new lower volume even with tariffs.

As for the potential “saving” part - the data is even a little iffy on that. In the end, we will have no additional high paying jobs at the same time we will be losing affordable goods folks need. Trade wars are death spirals, not manufacturing enablers.

We need to pick a few nation critical sectors (like semiconductors) and use subsidies, industrial policy and tariffs to secure essential manufacturing capabilities/supplies. Not to recapture American jobs (as to do so will cost more than the jobs are worth), but as a matter of national security. After that we need to let markets work.

 

[ignorethefringes]

At the very most, high tariffs may try to save some existing on-shore manufacturing jobs, but they can’t create meaningful new on shore jobs, because supporting supply chains aren’t present, inexpensive labor is not present and the rising prices actually reduce sales volume and the external competition still has the volume capacity and supply chain to meet the new lower volume even with tariffs.

As for the potential “saving” part - the data is even a little iffy on that. In the end, we will have no additional high paying jobs at the same time we will be losing affordable goods folks need. Trade wars are death spirals, not manufacturing enablers.

We need to pick a few nation critical sectors (like semiconductors) and use subsidies, industrial policy and tariffs to secure essential manufacturing capabilities/supplies. Not to recapture American jobs (as to do so will cost more than the jobs are worth), but as a matter of national security. After that we need to let markets work.

I’m no expert by any stretch, but I can’t shake the feeling that the best thing the average consumer could do to bring down prices is to stop buying unnecessary junk. And I really do mean unnecessary. If it isn’t a necessity, stop spending money on it until the businesses bring prices down.

I’m sure there were some supply chain constraints, etc., associated with Covid that brought prices up. But plenty of big businesses have been making record profits for a couple years now. It’s not a cost issue, it’s the fact that they refuse to give up the higher profit margins they now know are available because people keep paying the higher prices.

 

[VikingsGuy]

I’m no expert by any stretch, but I can’t shake the feeling that the best thing the average consumer could do to bring down prices is to stop buying unnecessary junk. And I really do mean unnecessary. If it isn’t a necessity, stop spending money on it until the businesses bring prices down.

I’m sure there were some supply chain constraints, etc., associated with Covid that brought prices up. But plenty of big businesses have been making record profits for a couple years now. It’s not a cost issue, it’s the fact that they refuse to give up the higher profit margins they now know are available because people keep paying the higher prices.

I agree that for this, and many reasons, Americans buying less unneeded stuff would be a good thing.

As for corporate profits, most things I have seen are absolute dollars not inflation adjusted. So if prices and costs go up 25% then profits would also go up 25%, but that would be 25% more dollars that are worth 25% less. It’s a bit like adding 4 games on to the NFL schedule and then celebrating all the new season record holders. The players didn’t get better, we just aren’t comparing apples to apples.

As far as “refuse to give up”, that ignores all the added costs of component and labor inflation they have been handed.

So, I am not saying none have benefited, but that a deep dive into each supply chain would be required to really determine the winners losers and status quo. But in American news cycles all we can be bothered to report is non-inflation adjusted profits are up. That is simply useless info, but it is politically convenient for many.

 

[schmalts]

I agree that for this, and many reasons, Americans buying less unneeded stuff would be a good thing.

As for corporate profits, most things I have seen are absolute dollars not inflation adjusted. So if prices and costs go up 25% then profits would also go up 25%, but that would be 25% more dollars that are worth 25% less. It’s a bit like adding 4 games on to the NFL schedule and then celebrating all the new season record holders. The players didn’t get better, we just aren’t comparing apples to apples.

As far as “refuse to give up”, that ignores all the added costs of component and labor inflation they have been handed.

So, I am not saying none have benefited, but that a deep dive into each supply chain would be required to really determine the winners losers and status quo. But in American news cycles all we can be bothered to report is non-inflation adjusted profits are up. That is simply useless info, but it is politically convenient for many.

American news is useless information for the most part

 

[ignorethefringes]

I agree that for this, and many reasons, Americans buying less unneeded stuff would be a good thing.

As for corporate profits, most things I have seen are absolute dollars not inflation adjusted. So if prices and costs go up 25% then profits would also go up 25%, but that would be 25% more dollars that are worth 25% less. It’s a bit like adding 4 games on to the NFL schedule and then celebrating all the new season record holders. The players didn’t get better, we just aren’t comparing apples to apples.

As far as “refuse to give up”, that ignores all the added costs of component and labor inflation they have been handed.

So, I am not saying none have benefited, but that a deep dive into each supply chain would be required to really determine the winners losers and status quo. But in American news cycles all we can be bothered to report is non-inflation adjusted profits are up. That is simply useless info, but it is politically convenient for many.

Fair enough. But I still find it hard to worry about those big businesses still making a profit on top of increased costs. They aren't guaranteed or have a right to a certain profit margin.

When they stop giving C-suite executives raises I'll starting believing their profits have been pinched

Just a little moody and sarcastic this morning.