By all accounts Americans voted with their pocketbooks when electing Donald Trump to a second term, concerns about inflation likely ushered-in Trump’s victory, no matter the fact that inflation had been tapped down, and no matter how good the economy was compared to the larger world. If only there was a way to have warned people that the tariffs Trump supports would result in needlessly increasing prices further into the future, perhaps the election might have… The tariff issue and the inevitable result got plenty of coverage, so much so that we now have the first reports of businesses preparing to increase prices.
One doesn’t have to be an economist to fully appreciate that if a country pays a tariff to import goods to the United States, that price will get passed along to the producer, who throws it to the merchandiser, and eventually the cost falls squarely on the customer-consumer. The customer is always the one left with the bill. To that end, Walmart doesn’t appear to need any more time to ruminate on the possible consequences of newly-imposed tariffs. According to CNBC’s latest reporting:
Walmart’s CFO, John David Rainey, said the retailer could have to raise prices on some items if President-elect Donald Trump’s proposed tariffs take effect. “We never want to raise prices,” he said in an interview with CNBC on Tuesday. “Our model is everyday low prices. But there probably will be cases where prices will go up for consumers.”
No, of course not. Never “want to” do much of anything beyond accept money, but ever-ready to do what’s needed to keep profits in place. There are, obviously, a lot of questions remaining as to specifics:
Rainey added that it’s too soon to say which products could cost more due to the tariffs. Lowe’s also addressed the risk posed by the tariff proposal as the home improvement company reported earnings on Tuesday. Walmart’s and Lowe’s comments are the latest warnings from U.S. retail leaders about the potential blowback from from the duties.
Yeah, except it is almost beside the point. Again, you don’t have to be an economist to know that if the average Walmart-run is 20% more expensive, the average run will buy 20% less, or at least have 20% less to spend on something else. It means that we will buy fewer “luxuries” or little treasures, and more… Well, the average middle-poor person will just spend less generally and there you go… How’s your recession going? Happy Holidays.
I am certainly no economist but I do know that the economy largely tracks the nation’s mood and morale. I also know that it lags, big big big time lags behind the mood. The nation can turn sour overnight, with people wanting nothing more than to save whatever tiny egg they might have and things get real bad, real fast. But even as the mood brightens, even as policies reverse, things linger, they lag – “It happened before… ” the mood is tough to turn back. It can get almost hopelessly stuck, unresponsive to even Herculean attempts to improve the situation. Ask FDR – who was “bailed out” by the biggest war ever fought among mankind.
This was just so avoidable. Whether free trade is the best means to go about running a global economy or not is left to real economists. But massive changes wrought almost overnight bring about impossible to predict consequences, most based on consumer confidence in a system that they once thought was so strong as to fight off big interruptions or changes in psyche.
But as with so much that is our new reality, the fact that it none of this has to happen doesn’t seem to deter the people still in a position to avoid it.
God Bless: I can be reached at [email protected] and @JasonMiciak and on Blue Sky.
Profits last quarter not on food but other items reported today by Walmart. Just boycott as much as u can, save your money-you will need it.
I think a lot of people are bracing for this new reality. Here’s hoping it won’t be as bad as we fear it might.
“Our Model is everyday low prices.” WalMart hasn’t had LOW Prices since Covid, they began jacking-up prices, in that time….& never lowered them back! RW Corp’ WalMart, love Trump. BOYCOTT, Where you can!
“One doesn’t have to be an economist to fully appreciate that if a country pays a tariff to import goods to the United States, that price will get passed along to the producer, who throws it to the merchandiser, and eventually the cost falls squarely on the customer-consumer. “
Jason, please correct the above quote. The country whose goods are imported into the USA does not pay the tariff – the US company importing the goods pays the tariff to the US government. Then, to protect their profit margin since the cost of said goods is now higher, the US company has to raise prices. The country sending us the goods pays nothing of the tariff.
I will check on that. I think there are different procedures for different goods and I should’ve been clearer. Thank you!
jason
Can I ask a stupid question? Why does everybody assume this is a done deal?
I know Musk wants it, and that means Trump wants it. But does anybody else? Even Republicans?
“…none of this has to happen doesn’t seem to deter the people still in a position to avoid it.” That’s because the people in that position will not be affected by it like we the people will. That’s the definition of oligarchy.
(BTW Jason, there’s an “it” right in front of the part quoted here that needs to go away unless there’s a reason for it that I don’t know about?) tks, K