Right now you can buy a 12-pack of bottled Pepsi in your local Walmart for $8.68. That is less than 73¢ a bottle.
Or you can buy a single (cold) bottle at the register for $2.28.
Most of what you are paying is the cost of having the 12-pack broken down and refrigerated.
It works that way with a lot of things. A BIG part of what consumers pay, is added above and beyond the actual raw cost of the actual manufactured product.
Point being, even if the entire tariff is passed-on to the consumer, the 20% tariff is not a 20% sales tax. It adds 20% only to the cost of underlying product, not 20% to the final sales price.
You can buy a container load of plastic kitchen utensils for a few cents a piece and,( as Dollar Tree found out), go broke selling them for a dollar each. Why? Because the cost of the manufactured product (that the tariffs would be added to) is only a tiny part of the total cost of selling the product
The real expense comes not in the raw cost of the product itself (which tariffs apply to) but in
the cost of renting 4,000 stores,
paying salespeople at all 4,000 stores
having a warehouse operation that breaks down a container load into 4,000 smaller packages and
putting them on 4,000 different trucks and shipping them
Consider the following table
Assume 100% of the price increase is passed on to consumer and
tell me how much (or how little) a tariff would add to prices across the economy:
If many of the products are subject to tarrifs then those minor increases get all added up on one bill
Not saying that it will for certain happen but if it’s combined with removal of significant portion of different types of income tax then ye that sounds like inflation
One thing is certain, taxing consumption as our Founders intended [which excludes the necessities of life] is by far one of the most equitable systems of taxation.
Hamilton stresses in Federalist No 21 regarding taxes on articles of consumption: “There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counter balanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.
It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .‘’ If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”
Over 30% of the GDP is shelter, almost completely unaffected by tariffs.
Over 17% of the GDP is healthcare, almost completely unaffected by tariffs.
A large part of the GDP is other services (insurance, streaming video, food service, vacations etc.), almost completely unaffecte by tariffs.
Only 25% of the GDP is actual goods two-thirds of imported goods are oil and other raw commodities (not subject to tariffs.)
The math doesn’t lie. A 20% tariff on 8.5% of the economy would be a very small one-time number.
See my response to @FreeAndClear
Only a small part of the US economy is a “goods” economy.
Only a small part of “goods” are imported and most of that is oil etc. (not subject to tariffs.)
Oh and retailers routinely 300-500% mark-ups to their products because their costs are driven by overhead warehouses, store rents etc…
Asking a Walmart exec a yes or no question like that is (deliberately) lazy journalism.
Any journalist covering the retail beat knows the size of mark-ups and if their colleges had taught them math and business (instead preaching a woke mindset and Collness 101) the reporters would ask better questions.
So Trump’s policies will only raise prices on goods that are wholly or partially imported. I don’t think the argument that inflation has moderated for the overall economy will appease consumers paying higher and higher prices at the store.
The concerns from Lowe’s are stated in their earnings report, I’m not sure where you’re getting “a yes or no question.”
“…trade policy changes or additional tariffs…and other factors that can negatively affect our customers.”
The lowes earning report revealed nothing to indicate lowes or the encomy in general would experience high inflation as a result of the Trump tariff (exactly as much as Moby Dick revealed. both links are equally irrelevant.)
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Fact remains this is the US economy:
75% of the economy is services (not subject to tariff)
A lot of our goods are raw goods (lumber gas etc.) and not at all like tvs (manufacured) or sugar, (a refined product.)
Only 8.5% of our economy is like refined/manufactured
and of that, the cost at the harbor (subject to tariff) is only a small portion of that 8.5%.
A 20% tariff on
– a small portion of
---- something that is only 8.5% of the economy to begin with.
Not for fresh produce, but for imported manufactured products? they certainly do.
From the harbor to the cash register? They absolutely do.
In many categories they get that much mark-up from the back of the store to the front. (How much do you think CVS pays of the 98¢ Hallmark Card they sell ya?)
From back of the store to the front of the store:
Pepsi – Less than 73¢ a bottle in back of store. $2.28 in the front. (73¢ x 316% = $2.28)
Clothing Markups – 100-350%
Shoe Markups – 100-500%
Furniture Markups – 200-400%
Sun/Eyeglasses Markups – 800-1,000%
In other cases retail corporations (like Walmart or Publix) make less from the back of the store to the register but still make 300-500% from the harbor to the register.
What are you missing? About 99% of the sentence.
Actually sentence read (I have broken it up for you below but this is the one actual sentence you are referring to.)
"A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to,
changes in general economic conditions,
such as volatility
and/or lack of liquidity
from time to time in U.S.
and world financial markets and the consequent reduced availability
and/or higher cost of borrowing to Lowe’s
and its customers,
slower rates of growth in real disposable personal income that could affect the rate of growth in consumer spending,
inflation and its impacts on discretionary spending
and on our costs,
shortages,
and other disruptions in the
labor supply, interest rate
and currency fluctuations,
home price appreciation
or decreasing housing turnover,
age of housing stock,
the availability of consumer credit
and of mortgage financing,
trade policy changes
or additional tariffs,
outbreaks of pandemics,
fluctuations in fuel and energy costs,
inflation or deflation of commodity prices, natural disasters, geopolitical
or armed conflicts,
acts of both domestic and international terrorism,
and other factors that can negatively affect our customers."
That is miles and miles away from saying “A 20% tariff on imported manufactured goods will negatively impact our customers.”
It is saying “This document includes forward-looking statements and here is a list of things that might impact them.”
I get that your objective is to defend the Trump agenda, but I’m pretty sure we’re saying the same thing. Lowe’s states that tariffs, among many other potential issues, could negatively affect customers. I don’t think I suggested that tariffs are the only potential danger.
