USeless

[Geronimo]

The manufacturer will have to eat the cost if they export and their product is easily substitutable, yes. But for stuff they sell domestically?

[Edit:]
So the supposed reason why Trump is threatening with tariffs is the US' trade imbalance, so what will be affected is stuff that is imported into the US and either sold as-is, or used as an input in a process which is then either exported or sold domestically.

For stuff that is sold externally, it is generally high-quality, high-value-added stuff which might survive some price increases.

But everythingthat is sold to US customers? They will end up paying for Trump's tariffs.

all of that would be expected to drive capital flight as well. I'm more than a little surprised to see so little evidence of it so far.

[N35t0r]

all of that would be expected to drive capital flight as well. I'm more than a little surprised to see so little evidence of it so far.

Why would it drive capital flight? People will suffer, but companies will not, at least at first. Add that Trump and Musk are slashing regulatory and consumer protection agencies, plan to lower taxes, and also hobble the IRS, it will be like Christmas for capital.

[Geronimo]

Why would it drive capital flight? People will suffer, but companies will not, at least at first. Add that Trump and Musk are slashing regulatory and consumer protection agencies, plan to lower taxes, and also hobble the IRS, it will be like Christmas for capital.

For companies that sell domestically all of that discretionary income being diverted to tariffs will cut sales. For companies that sell exports all of those tariffs paid by themselves when importing their materials will either directly cut their bottom line or put them at a competitive disadvantage that costs them market share if they pass the expense on to their consumers. The only companies that would not be expected to underperform in response might be those that have little to no imported materials and overwhelmingly serve a domestic market. Surely that represents a relatively small share of the investment in the US. I don't understand how you imagine greater consumer pain in the US will somehow shield companies from all of this?

[N35t0r]

For companies that sell domestically all of that discretionary income being diverted to tariffs will cut sales. For companies that sell exports all of those tariffs paid by themselves when importing their materials will either directly cut their bottom line or put them at a competitive disadvantage that costs them market share if they pass the expense on to their consumers. The only companies that would not be expected to underperform in response might be those that have little to no imported materials and overwhelmingly serve a domestic market. Surely that represents a relatively small share of the investment in the US. I don't understand how you imagine greater consumer pain in the US will somehow shield companies from all of this?

Again, because I'm the short term they will benefit. And whoever thinks about the long term gets sued and replaced.

[Provost Harrison]

It seems like you can always tell when the implosions/own goals begin to approach a critical mass by watching the capital flight as the smart money adapts itself to the new realities. Shouldn't that be evident now? Why isn't there stronger capital flight from the US in response to this firehose of stupidity from the whitehouse?

We're not even a month in yet. Despite the stupidity and recklessness of the decisions made their true impact hasn't even moved into sight yet, let alone impacted. And some of these effects will take years to fully manifest. This is the calm before the storm, believe it or not.
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[Provost Harrison]

they will and they have. Tariffs on materials for example can't be passed along to the consumer without destroying competitive advantage.

Of course they are part along to the consumer! It's an additional, and significant extra cost incurred. They get passed on to the customer or you find a new supplier that isn't subject to tariffs (that's the logic) but good luck with doing that with Canadian oil with rigid supply chains and logistics. You are going to pay for that increased energy cost at every step.

[Berzerker]

I'm not familiar with current trade deals but I heard Trump calling for reciprocal tariffs, that suggests our exports face higher tariffs. Cold war policy was to favor countries who obeyed and sanction (or destroy) the disobedient, we traded jobs for friends. Losing our advantage was inevitable, we were last man standing after the war and the world recovered.

[Provost Harrison]

I'm not familiar with current trade deals but I heard Trump calling for reciprocal tariffs, that suggests our exports face higher tariffs. Cold war policy was to favor countries who obeyed and sanction (or destroy) the disobedient, we traded jobs for friends. Losing our advantage was inevitable, we were last man standing after the war and the world recovered.

The problem you suffer from is quality and suitability for our market. I don't think it matters if there are tariffs on your cars or produce, you have been unwilling to adapt to our market. Your main exports to us are services in IT, entertainment, etc., which have facilitated your cultural proliferation. But I don't think you understand quite how much you're tainting your product.

[Aeson]

I'm not familiar with current trade deals but I heard Trump calling for reciprocal tariffs, that suggests our exports face higher tariffs. Cold war policy was to favor countries who obeyed and sanction (or destroy) the disobedient, we traded jobs for friends. Losing our advantage was inevitable, we were last man standing after the war and the world recovered.

He thinks VATs are tariffs.

[Berzerker]

how do VATS work in relation to imports? Does the import get hit with a tax based on VATs or some other measure?

I think the US health system is fubar by design, we burden business with paying health insurance while other countries have 'universal' systems. I don't know the ultimate breakdown of subsidies/tariffs/vats etc to know the various levels of protectionism.

[Geronimo]

lack of universal healthcare has definitely resulted in manufacturing leaving the US. I would have thought the people Trump is surrounding himself with understood this.

[N35t0r]

how do VATS work in relation to imports? Does the import get hit with a tax based on VATs or some other measure?

I think the US health system is fubar by design, we burden business with paying health insurance while other countries have 'universal' systems. I don't know the ultimate breakdown of subsidies/tariffs/vats etc to know the various levels of protectionism.

VAT. It stands for value added tax.

Since every product sold in a country with VAT pays it, then so do imports. Basically, if I buy a German boardgame that costs €100, approximately 16€ of that is VAT, and goes to the government, and the other 84€ is the actual price of the game. If someone makes a similar boardgame abroad and exports it to Germany, it wouldn't be equitable to exempt it from paying the tax, so they also get taxed.

It's kind of like a general sales tax, although the system is a bit more complex. The store that sold it to me already bought it with VAT (maybe they paid 80€, which is 67€ + 13€ VAT), so their net is those 20€ difference, which includes the store's profit (17€) plus the tax (3€). Despite the overall tax on the game being 16€, which I (as final consult of the product) pay in full, the store only pays 3€ to the government: each step of the value chain only gets taxed for the difference in value that they added to the product (hence the name, Value Added Tax). The store, in order to justify only giving the government the 3€, has a copy of the final invoice for 100€ including 16€ tax, and a copy of the invoice they got when they bought the game (probably wholesale, but with a unit price) of 80€ including 13€ tax. The difference between the 16€ tax they got from me, and the 13€ they already paid is those 3€ they have to pay.

[N35t0r]

lack of universal healthcare has definitely resulted in manufacturing leaving the US. I would have thought the people Trump is surrounding himself with understood this.

Right, because you were the one who believed Trump when he said he didn't know what project 2025 was, and that he wasn't going to surround himself with them.

The group he seems to be surrounded with seems to believe that manufacturing left the US because they have to pay too high salaries for too little work, and have to give those employees to much security and in general can't just dump crap anywhere.

[Aeson]

how do VATS work in relation to imports? Does the import get hit with a tax based on VATs or some other measure?

I think the US health system is fubar by design, we burden business with paying health insurance while other countries have 'universal' systems. I don't know the ultimate breakdown of subsidies/tariffs/vats etc to know the various levels of protectionism.

VAT doesn't discriminate foreign or domestic. If you tried to replace a VAT with tariffs you'd need to "tariff" your domestic production as well as imports. (There are other differences, tariffs are much more prone to corruption and gaming, and invite retaliatory tariffs. Tariffs are just horrible in almost every case.)

You are right that our screwed up healthcare system disadvantages US businesses. Along with everyone else other than big pharma/insurance.

[N35t0r]

Saying that VAT is a tariff is just Mike saying sales tax is a tariff.