Tariffs and Potential Inflation

[SAJ-99]

It is the American consumer's attention span that blissfully perpetuates the economic force factor of engineered obsolescence.

Pretty much, as should be clear anywhere on Black Friday.
Amazon paid to broadcast an NFL game on Friday night and will have QR codes on the screen for people to scan with their phone to make buying that "junk" easier.
We are all part of the problem. Tariffs aren't going to solve that.

 

[RemingtonRules]

What has been achieved in the last 8 years of tariffs?

Nothing except price inflation for American citizens.

Some jobs have been created and investments domestically to move back from China.

 

[BigHornRam]

 

[D_Walt]

Saw the chart below in WSJ and it reminded me your post. I wonder if they are almost two different industries. I have done two remodels and used local manufacturers both times. That local source allows for more custom build. I wonder if the chart below is mostly big-box stuff? Clearly the first set of tariffs helped reduce the China -made stuff, but it was quickly replaced by sources from other countries. The total output simply coincides with the housing market.

View attachment 350691

Multiple factors at play and it is definitely a dynamic boom and bust industry. Remodels and custom shops like you are talking about don’t really move the needle; new home and apartment construction drives the bulk of the market.

The post-Covid boom cycle brought on by extremely low interest rates pushed demand to record levels and cost became nearly a non -factor; the only thing that really mattered was availability. Add to that the fact that there is also a lot of US based manufacturers that use some foreign components (often pre-finished doors) and the plot thickens even more.

Imported product is definitely making waves in the industry (at least in my markets) right now, especially products made in Mexico.

 

[SAJ-99]

Probably should add to this discussion by saying that the current nominee for treasury secretary would agree with "most" economists, or at least the sober ones, regarding tariffs and inflation. His early 2024 letter to his investors is linked (ready like an Cover letter for the US treasury job, LOL) It does seem the market agrees with him in that it is mostly talk.

https://assets.realclear.com/files/2024/02/2353_keysquare.pdf

 

[WVmike]

This makes my head hurt!

 

[Sytes]

Probably should add to this discussion by saying that the current nominee for treasury secretary would agree with "most" economists, or at least the sober ones, regarding tariffs and inflation. His early 2024 letter to his investors is linked (ready like an Cover letter for the US treasury job, LOL) It does seem the market agrees with him in that it is mostly talk.

View attachment 351465

https://assets.realclear.com/files/2024/02/2353_keysquare.pdf

And then there's Janet Yellin... But who's to say, right? Not the critic who counts...

 

[VikingsGuy]

Probably should add to this discussion by saying that the current nominee for treasury secretary would agree with "most" economists, or at least the sober ones, regarding tariffs and inflation. His early 2024 letter to his investors is linked (ready like an Cover letter for the US treasury job, LOL) It does seem the market agrees with him in that it is mostly talk.

View attachment 351465

https://assets.realclear.com/files/2024/02/2353_keysquare.pdf

For all those who don’t like how the free market works, we will likely get a real dose of how government markets work when they jack around with tariffs and monetary policy. Remember the 1970s - we can run out the old playbook again, but I am not expecting a different outcome.