Two things.
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.
Agreed and its not just "prices will be higher". You can pretty reasonably expect goods shortages as the entire global economy tries to re-adjust supply chains to more tariff friendly domiciles.
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!
I keep asking this of people making the argument of “when tariffs are felt…”?
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.
They’ll be felt by everyone buying goods in the US as prices increase, it’s not a trick question.
So all goods. Care to explain how it will affect all goods including domestic goods?
Solid blue collar people will pay most of it in form of more expensive cloth, food, cars ... everything. The poorer you are, the more you will feel it. If you are rich, prices going up by 20% are nothing. If you are middle class, it is annoying. If you are poor, it is disaster.
Plus, truly rich are getting lower taxes. Tariffs are partially meant to offset those looses.
Tariffs will have negative impact if it’s on an everyday item. That group doesn't buy new luxury euro cars and wines every day. They buy domestic or Japanese and domestic beer and liquor. I’m convinced that east asia (Japan, Korea, Vietnam) will negotiate the tariffs down and that will bring Japanese/Korean vehicles and clothes prices down because China will need to lower prices to stay competitive to Vietnam and Korea and will just eat the tariff.
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.