1. The tariffs have not yet been felt. This is all projection. Once people feel the tariffs things are going to get much worse.
2. China has already retaliated. EU will announce retaliatory tariffs next week. Trump is likely to take it as a challenge and double down.
Of course everyone will be doing so at the same time, competing for the same finite factor capacity.
For example - If your Nike right now for example, you might be winding down Vietnam production volume and trying to spin up more volume in existing country footprints, while also trying to find new factories there as well. And then those suppliers will be looking for new suppliers for shoestrings and metal eyelets and 100 other things. And those suppliers will be searching for new suppliers of cotton, polyester, steel, cardboard, etc.
There is zero chance this happens without cost AND disruption! So things can get worse before they get worse!
Where do you think they will be felt and by who?
My guess is among Trump supporters, especially among those solid blue collar middle class vocal MAGA ones, most of these tariffs will not be felt in any really meaningful way. The tariffs that might affect the middle class (basically east Asia) will be the first ones that end up negotiating them away before American consumers feel them…because it’s in those countries best interest and they know it.
The biggest danger to Trump from these tariffs are from the GOP politicians and conservative retirees and nearing retirement age who will not be happy with the stock market if it doesn’t stabilize soon. The price increases don’t hurt them, it’s the impact on their portfolios.
Plus, truly rich are getting lower taxes. Tariffs are partially meant to offset those looses.
Coffee will go up, but most food staples will not be all that volatile because Mexico got the out. Coffee is weird one though…because people will gladly pay 30% more for coffee on account of it being more an habit/addiction.
Mexico has old tariffs in place, they did not got an out. They do not have new tariffs put on them on top of previous tariffs. Even domestic foods can go up when fertilizers used to grow them are more expensive. Or when transportation is more expensive.
China did not just "eat the tariff". First, tariff is paid by domestic consumer, foreign company is not paying that. Second, China announced retaliatory tariffs.
What cheap domestically produced goods?
Is it the numbers he used to justify the tariffs? The article we're commenting on shows Trump has always seen that any trade deficit at all is unacceptable.
Even zero tariffs in Vietnam is not going to zero out the US's deficit with them, Vietnamese people can't afford to buy that many goods from the US , and the US can't manufacture that many clothes or shoes for their own market.
Even Australia, which has a trade surplus with the US, got tariffs. What negotiations will work for them?
Or will he take tiny, pointless wins just to sound strong like in the early negotiations with Canada/Mexico? Are the talking points just bluster?
Also reduced competition might lead to overall higher prices.
Likewise, the US imports fertiliser: https://tradingeconomics.com/united-states/imports/fertilize...
Several critical minerals just aren't mined at all in the USA, they have to be imported. Anything that needs those to be produced, just got more expensive, regardless of where the factory is.
Your domestically produced cars were made from imported parts, sometimes with multiple border crossings.
Your domestically produced big tech runs on servers with many imported components.