Walmart just leveled with Americans: China won’t be paying for Trump’s tariffs, in all likelihood you will
Trump promised voters tariffs are a panacea for the economy, but Walmart finance chief John David Rainey warned they will be inflationary for customers.
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Realistically though, that's how tariffs just work. With products costing more, theoretically that should drive demand down and eventually lead to fewer imports. Of course, if there's still no competing product or the product is a basic necessity, then it'll likely just result in people paying more.
Working tariffs make importing goods so expensive that manufacturing them nationally is viable. There are definitely areas where tariffs make sense, e.g. you have or want to build an industry that's competing against a subsidized industry from another country. Tariffs are one way to help with that.
But we all know that's way too much thought for him, which probably boiled down to "China bad"... which I'm not necessarily disagreeing with fully... but for reasons that tariffs aren't necessarily an answer to.
Working tariffs make importing goods so expensive that manufacturing them nationally is viable.
The lack of American subcompact trucks is evidence that this is false.
I think this is rather an issue with what the majority of the market wants. If carmakers saw a bigger profit in offering smaller transport vehicles (pickup trucks in my opinion aren't even particularly good at transporting a lot of stuff), they'd manufacturer and sell them.
But the truth is pickup trucks are often just lifestyle products (when I need to transport something, I just rent something adequate) and as such, there is a much larger customer base than for sensible options, which makes the others commercially risky.
Wasn't it something to do with trucks are work vehicles so emissions restrictions didn't apply to the same extent, so they basically pushed trucks hard and made everything truck sized to skirt around it? That has the effect of turning into a lifestyle product. Guarantee my little Subaru sees more off-road than most jacked up trucks.
Actually I'd argue Subaru is more of a lifestyle brand, selling the idea that you for sure need that extra clearance and all wheel drive, just in case you decide to rock crawl your way up to a camping spot after Costco. I love mine, and actually use it, but that doesn't mean I'm blind to what they're pushing.
In the US, CAFE which regulates this sort of thing has different rules for light trucks versus cars. That's why nearly everything sold today is a "light truck" - not just pickups but SUVs, CUVs, and vans which make up the majority of new vehicles sold. These rules also had a lot to do with large cars like station wagons going away.
That could also be, I'm not American so I don't know all the details.
However, watching from the outside, it clearly comes off as some kind of statement.
Yeah, the fact that every sporting event's commercials rotate between dick pills, beer, and giant trucks totally doesn't have anything to do with it.
Also, if the market didn't demand smaller trucks, why slap a tariff on them to encourage local production?
I don't know, is that particular tariff already in effect?
I'm not saying they're always good, bit that they can be a strategic instrument. The example you brought up makes no sense, I agree. But I'm sure if carmakers saw a market for a class of cars, they'd take the opportunity - maybe not on their core brand (like I don't think Ford would build one under that brand in the US).
Yeah, the fact that every sporting event's commercials rotate between dick pills, beer, and giant trucks totally doesn't have anything to do with it.
I think this rather proves my point, they're lifestyle products targeting a specific demographic under the guide of being a utility.
It’s called the Chicken Tax and it’s why I can’t buy a Hilux despite demanding as hard as I can.
I think this rather proves my point, they're lifestyle products targeting a specific demographic under the guide of being a utility.
It’s also creating demand for trucks that are terrible at doing truck stuff.
Saying “the market demands big trucks” ignores the billions they spend making the market demand big trucks.
Why? Because they’re insanely profitable.
So this is a retaliatory tariff and not actually one that makes particular sense otherwise.
It’s also creating demand for trucks that are terrible at doing truck stuff.
Yeah, they're garbage.
Saying “the market demands big trucks” ignores the billions they spend making the market demand big trucks.
It's probably some kind of feedback loop.
On the other hand, if just marketing budget created demand, they'd advertise these more here as not a lot of people own one. But someone figured out that that marketing budget would probably not yield an RoI, as opposed to the US. Though they're are probably practical factors at pay, like gas prices and road size.
I think this is why single use vehicles aren't popular in America. Everyone needs a car, usually to work, and generally also to vacation, grocery shop, meet friends and family, etc.
We tried this in 2017. Trump put tariffs on dishwashers, and American companies just raised their prices to match, pocketing the difference.
Yah, I mean realistically, I can only really see tariffs working if a nation is trying to enter an industry. That's not the case here, but even so, these tariffs differ from the ones you mentioned because they would be against Chinese imports rather than a specific product, so I can't imagine there's as much risk of that sort of market manipulation from happening again... but then again, I've got no idea.
If you’ve got no idea then why argue?
There isn’t a competition in the market between Malaysian washing machines vs Chinese washing machines, in reality the tariffs will affect Chinese goods mainly, and any industry will raise prices to pocket the difference as we saw in the above example. It was more than just a single appliance that raised the prices.
