The media doesn't seem to be doing a good job articulating what the (likely) real world impact is going to be. I keep hearing how other countries are negotiating but when you look into the details, there is nothing of substance actually happening.
> Almost guaranteed.
> There are some categories (toys, pet stuff,computer accessories) where HUGE percentages of goods are made in china. Those shelves will be empty as soon as inventory runs out, which will be soon.
> Shelves would get re-stocked once tariffs are removed and the ships start sailing again.
> If it takes longer than 60 days from now, we're looking at 10s of thousands of bankruptcies. This will make covid look like a weekend at the ritz carlton. Biggest financial crisis since the great depression.
My takeaway: People are not taking this NEARLY seriously enough.
My tinfoil hat interpretation: The US govt knows how serious this is, and they know that if people panic (which honestly, they fucking should) it increases China's leverage substantially.
what does that mean
I agree with your points btw. My friend is a retail director specializing in this area and has been at pains to educate me (and anyone else willing to listen) on the depth and severity of the impending supply dislocation.
Ryan runs Flexport which is a supply chain company so its from the "source" if you will.
Even worse is that depending on the product, you might not even be able to place an order from the importer because they are completely unable to actually price the things with all of the uncertainty right now. A friend of mine is a hearing device retailer/distributor. He tried to order way more than he usually does a month ago to get ahead of this. The order was denied because they said they have no idea how to price any of it. So he's just going to have to wait an indeterminate amount of time which then makes it impossible for him to plan. He has to jack up his prices to cover future potential price increases and to be able to keep the lights on if they run out of stock.
Meanwhile, Kevin Hassett, Director of the National Economic Council, said just yesterday that he doesn't believe any shelves will be empty due to retailers planning ahead for the supply disruption—directly contradicting what the CEOs of those retailers had warned Trump just a few days earlier.
I have serious concerns about the competency of this administration. The CEOs of major retailers have a vested interest in understanding supply and demand and have intimate knowledge of supply chains and retail channels. If they say shelves are going to be empty, then you can take it to the bank that shelves are going to be empty.
Everything is pointing to shelves being empty. What happens after the shelves start going empty is what has me concerned. It could be a minor issue, or it could lead to mass panic. My concern is that I have no confidence in this administration's ability to resolve any issues that may arise due to their actions. They're making the mess and are expecting us to clean it up after them.
As for toys, most kids don't play with a plastic toy for more than like, 3-10 hours of its existence and then it rots on a shelf or in a drawer until is eventually ends up in a landfill. I'm not going to miss that. I'm sure that someone will point out important things that china makes dirt cheap and I'm sure they'll be right. I personally don't care if clothing options are limited or plastic toys are scarce. The US will not implode.
It really seems like china has more to lose than we do, but because they're a communist country they can just deploy troops to quell uprisings. Tiananmen Square comes to mind. So we play this game of chicken and the media screams that they sky is falling.
Of course the Walmarts and Amazons of the world care, most of what they sell is plastic shit and clothes. I have little sympathy for them.
However, it is worth noting that CEOs also have a vested interest in trying to reduce tariffs. And they would absolutely fearmonger if they thought it would help them.
The big outlets are terrified to get on this admin's bad side because their current business wants to do a lot of mergers which have to be approved and the administration can tie those up for years on a whim so they're already lying down.
But yes, whatever the reason, the situation could change too quickly for safe predictions. In 2020, the US economy had recovered from the massive disruptions of the Covid lockdowns by Q4. There were shortages of toilet paper and eggs for a while, then there were surpluses and sales for a while, and then it smoothed out.
That is just one of the many, often conflicting, goals cited by the administration, and doesn’t make sense on its face: the reason we have a trade deficit with most countries has nothing to do with them tariffing our goods or taking other protectionist measures.
If that is the goal, then it’s a terrible way of doing it. And also inflationary.
We will see!