How do tariffs work in real time?

[just-jim]

.
What a great quote from what RB posted!

“..trump will not want to admit it, but he started a trade war with Adam Smith and lost. He’s not the first President to learn that lesson."
.

[Rideback]

WSJ: The Great Trump Tariff Rollback
"https://www.wsj.com/opinion/u-s-china-t ... _permalink

"Rarely has an economic policy been repudiated as soundly, and as quickly, as President Trump’s Liberation Day tariffs—and by Mr. Trump’s own hand. Witness the agreement Monday morning to scale back his punitive tariffs on China—his second major retreat in less than a week. This is a win for economic reality, and for American prosperity.

Opinion: Potomac Watch
WSJ Opinion Potomac Watch
The U.S. and China’s Tariff Rollback / Qatar Offers Trump a Jet


Subscribe
Explore Audio Center
Make that a partial win for reality. The Administration agreed to scrap most of the 145% tariff Mr. Trump imposed on Chinese goods on April 2 and later. What remains is his new 10% global base-line tariff, plus the separate 20% levy putatively tied to China’s role in the fentanyl trade, for a total rate of 30%. In exchange, Beijing will reduce its retaliatory tariff to 10% from 125%. The deal is good for 90 days to start, as negotiations continue.

Investors are cheering at this border-tax reprieve, since this is a step back from mutual assured trade destruction. Dan Clifton of Strategas calculates that Mr. Trump’s trade walkbacks add up to some $300 billion in tariff relief. That’s a huge tax reprieve.

The 30% tariff is still exceptionally high for a major trading partner, but the 90-day rollback spares both sides from what looked like an impending economic crackup. U.S. consumers were facing widespread shortages, while China feared growing unemployment.

As with last week’s modest British agreement, the China deal is more surrender than Trump victory. Apart from the tariff rollback, neither side announced any broader concessions on the substantive trade issues that weigh on the U.S.-China relationship. Those include China’s barriers to American firms, especially in services such as digital and financial, and its chronic intellectual-property theft.

Many of these bad Chinese practices have become worse under President Xi Jinping’s strong-arm economic management. One tragedy of Mr. Trump’s shoot-America-in-the-foot-first approach is that he’s hurt his chances of rallying a united front of countries against Beijing’s mercantilism. By targeting allies with tariffs, Mr. Trump has eroded trust in America’s economic and political reliability.

Beijing now also has the benefit of concrete experience to reassure the Communist Party that Washington would struggle to impose economic sanctions in a crisis such as a Chinese blockade or invasion of Taiwan. If there’s a silver lining to the tariff fiasco, it’s the timely reminder to Congress to get serious about true military deterrence again.

Taking a step back, where are we now after nearly four months of Mr. Trump’s protectionism? The President’s concessions since his initial tariff announcements include: exemptions for goods from Canada and Mexico produced under the terms of the USMCA; a 90-day pause on his reciprocal tariffs against everyone except China; exemptions on China tariffs for iPhones and electronics; the mini-deal with the United Kingdom; and now the 90-day rollback on China tariffs.

The landing spot coming into view is a 10% global tariff, and higher (but not 145%) for China. The negotiations allegedly underway with dozens of countries while the reciprocal tariffs are paused may make some marginal headway opening markets for American firms. But so far there’s scant sign of the substantial trade deals that Mr. Trump promises.

So after weeks of market turmoil, the economy is left with higher trade costs and greater uncertainty for business, but at least a step back from Smoot-Hawley 2.0. Investors, businesses and households probably would welcome this outcome, which is considerably better than Mr. Trump’s initial plan.

But a 10% across-the-board tariff is still four times the average U.S. tariff rate before Mr. Trump took office. It keeps the door open to the economically and politically destructive special pleading for tariff breaks for well-connected industries and companies at the expense of everyone else. U.S. companies protected by high tariffs will gradually lose their competitiveness against the rest of the world.

If there’s a silver lining to this turmoil, it is that markets have forced Mr. Trump to back down from his fever dream that high tariff walls will usher in a new “golden age.” The age didn’t last two months, and it was more leaden than golden. White House aide Peter Navarro, the main architect with Mr. Trump of the Liberation Day fiasco, has been repudiated.

Mr. Trump will not want to admit it, but he started a trade war with Adam Smith and lost. He’s not the first President to learn that lesson."

[Rideback]

https://budgetlab.yale.edu/research/sta ... ay-12-2025

Americans will still pay out of pocket $2,800 this year and that's if the status quo holds.

[mister_coffee]

Why am I left thinking about the Death Cap, Amanita Phalloides?

The Death Cap is the most toxic mushroom known, and causes irreparable kidney and liver damage on ingestion. With all that, it is reported to have a pleasant taste. The initial symptoms include severe intestinal distress but that dissipates within 24 to 48 hours. After which the victim appears to feel "fine" or has recovered. Death follows with 12 to 18 days.

I think we are in the feel "fine" phase here. But the toxins are still dissolving our DNA.

The only thing that might mitigate the current supply chain crisis is that a large amount of goods are in warehouses and not yet accepted by their recipients and held hoping the tariffs will come down. So that might partially offset the lack of goods being delivered. Although I suspect they will be the wrong goods for summer. So if you need new patio furniture or camp chairs or a grill you might be out of luck...

People also wildly underestimate the number of products from China that are used to manufacture goods here. This includes a lot of motor vehicle parts and parts for agricultural equipment.

[just-jim]

.
Pee-Pants FELON donnie is claiming he did something marvelous….when he just blinked and got played like the stooge he is!

https://www.huffpost.com/entry/trump-ch ... 6d2434b8f8
.
“The president has not-quite-a-deal with China that manages to temporarily unwind the self-inflicted damage from ‘Liberation Day,’” said Douglas Holtz-Eakin, a conservative economist and a former director of the Congressional Budget Office. “Other than selling a few planes to the U.K., he has nothing to show for his tariff fusillade except a weakened U.S. economy.”
.

[Rideback]

Wall Street reviews of Trump’s trade war:
* “China has successfully called Trump’s bluff.”
* “Trump has basically negotiated with himself.”
* Monday’s news will be taken as a win for China, “I wouldn’t even bet on this 90-day tariff pause to hold.”
* “Xi Jinping's decision to stand his ground against Donald Trump could hardly have gone any better for the Chinese leader.”

[Rideback]

No worries, 'cheap stuff' is for the little people
https://www.axios.com/2025/05/12/china- ... temu-trump

[Rideback]

another 90 days
https://newrepublic.com/post/195112/don ... =tnr_daily

[just-jim]

.
I was thinking about your earlier post from this morning while I was walking today, David.

No one younger than 68 or 70 will probably remember it - but the combination of 10% +/- inflation AND the accompanying general and long-lasting economic slowdown of the late Nixon years (1971-1974) were called ‘Stagflation’. I recall it hit the elderly, poor and newly retired particularly hard.

I think we are headed there.
.

[mister_coffee]

Numbers coming down. Looks like double-digit inflation is on the way:

[mister_coffee]

I think that even in the very best case scenario we are looking at shortages and ridiculously high prices at least until late summer or early fall. That's because even if this insanity all stopped tomorrow it would take weeks to reposition the ships to begin moving cargo and even more weeks for orders to come in and start arriving here. And then it takes time for that stuff to move from a port to your local Wal-Mart or Amazon warehouse. If you are a domestic manufacturer depending on some random parts from China you can't really even start manufacturing again until the parts are in your warehouse.

Note that is the very best case. I think the realistic case (mostly based on our recent historical experience with COVID supply chain balls-ups) is that we will see significant, infuriating, and nearly continuous disruptions and shortages for the next twelve to eighteen months. I think it a safe bet when we look back on this that the disruptions will be worse than any from COVID.

That's without even considering the near certainty that this madness will trigger double-digit inflation.

I might be taking this too personally. Right now I have a deal on the table to deliver several hundred turnkey embedded Linux boxes for a remote sensing application. The original plan was for delivery starting in mid-July, but with this mess that doesn't seem possible. I'm on the phone with suppliers about once a week and what I'm being told is that there is no possible way that they will even be able to sell me the parts for twenty-five of these, much less two hundred and fifty.

[Rideback]

Zero ships have sailed from China now. No trade deal is underway much less signed.
https://www.cnn.com/2025/05/10/business ... demic?s=04

[Rideback]

I'm not surprised. Been thinking about the Co op's project for fiber optic installation and I'll bet the costs going forward will be prohibitive.

[just-jim]

.
I talked with a local merchant today who says prices on his raw goods ‘have gone crazy’. He bought 2 new pieces of equipment, now, rather than next year, as he originally planned - each was $5000. At 145% tariff - next year they would be $12,250. Each.
.

[Rideback]

The exception expired
https://www.cnn.com/2025/05/02/economy/ ... ges-tariff

"Many Americans might not have felt major effects from President Donald Trump’s sweeping tariffs — until now.

That’s because a major shipping loophole expired at one minute past midnight on Friday. The de minimis exemption, as it’s known, allowed shipments of goods worth $800 or less to come into the United States duty-free, often more or less skipping time-consuming inspections and paperwork.

The loophole helped reshape the way countless Americans shop, allowing ultra-low-cost Chinese e-commerce sites like Shein, Temu and AliExpress to pour everything from yarn to patio furniture, clothes to photography equipment and more into US homes.

Its impending end has rung alarm bells across social media, with a baseline tariff as high as 145% depending on the carrier set to take effect on Chinese imports, potentially more than doubling the cost for all those cheap products deal-hungry Americans scooped up.

And the end of the de minimis exemption for Chinese goods will also distill abstract, complicated, messy, hard-to-follow trade policy into something much easier to understand: a receipt.

Major carriers like UPS, FedEx, DHL and the United States Postal Service say they’re prepared for the changes. The government says it, too, is set; a US Customs and Border Protection spokesperson told CNN that “We are prepared and equipped to carry out enhanced package screenings and enforce orders effectively.”

But whether regular American shoppers are ready for the changes is another matter.

Of tchotchkes and trade policy
When President Donald Trump initially closed the de minimis exemption for goods from Hong Kong and China earlier this year, chaos ensued.

USPS briefly stopped delivering parcels from China. Delivery times for parcels that did get shipped stretched longer, with limited information on package tracking in the US.

At the heart of the issue: the sheer volume of packages. More than 80% of total US e-commerce shipments in 2022 were de minimis imports, the vast majority of which come from China, according to a congressional research report.

CBP told CNN it currently processes “nearly 4 million duty-free de minimis shipments a day.” Research indicates that a majority of those shipments come from China and Hong Kong. In total, over the last fiscal year, CBP said 1.36 billion packages came to the US under the de minimis exemption.

That’s a lot of dog bandanas, bead kits, frosting spatulas and tchotchkes. Regular Temu and Shein shoppers told CNN this week they’ve increasingly turned to the site as they feel made-in-the-USA products have gotten out of reach.

“I can’t afford to buy from Temu now, and I already couldn’t afford to buy in this country,” Rena Scott, a 64-year-old retired nurse from Virginia, previously said to CNN Business.

Lower-income households will suffer the most from the end of cheap Chinese e-commerce sites. About 48% of de minimis packages shipped to the poorest zip codes in the United States, while 22% were delivered to the richest ones, according to February research from UCLA and Yale economists.

The changes could come in stages. Already, for example, Shein and Temu raised prices ahead of the de minimis exemption’s end, hiking prices on several goods tracked by CNN"

[Rideback]

A timeline for when shelves will start to look like the Covid days and a recession moves in
https://www.cnbc.com/2025/04/28/empty-s ... eline.html

[Rideback]

Trump's first 100 days, the stock market has had it's worst in 50 years.
https://www.marketwatch.com/story/trump ... y-adfc8a80

[mister_coffee]

Sounds like someone has some hurt feelings and is a bit triggered.

[Rideback]

https://finance.yahoo.com/news/us-econo ... 44165.html

Economy contracts first quarter as businesses attempt to build inventories before more tariffs take effect


https://www.cnn.com/2025/04/30/economy/ ... 6017182519

[dorankj]

f*** off Rideback! Make whatever points you want but quit with all the gratuitous personal invective. It’s beneath someone of your supposed intellect.

[mister_coffee]

I don’t think most people have a clue just how much hurt is coming their way. The coming supply chain collapse will completely chsnge how we live.

[Rideback]

Yup and Trump called Bezos and yelled at him. Bezos backed down and said they had just been talking about it but it hadn't reached the level of a policy. Of course after watching you tube it seems problematic that Amazon could even figure out what the tariff rate was because the CB can't. Besides, why is Trump upset about a line item tariff charge when he's told Ken that China and other exporters are the ones who pay it?

[PAL]

Admin doesn't want Amazon to do that, according to Karoline Leavett who is creating an aura of hostility in the press conferences.
I hope Amazon doesn't cave to that.
https://www.msn.com/en-us/news/politics ... fb7e&ei=43

Probably did.

[Rideback]

https://www.youtube.com/watch?v=75PeExNmaS8

With Amazon's announcement that they will line item tariffs on orders, can't help but wonder how they'll figure that one out after watching this.

[Rideback]

Now hitting close to home with Central WA hay exporter:
https://www.cnbc.com/2025/04/28/trade-w ... ToFacebook