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How is it people don't understand basic principles of profit?

I had a coworker today come over with an invoice, asking if we had been billed for tarrifs on our parts yet.

I told her I didn't know because I don't deal with purchase orders.

She said, "I got one on this invoice, and I don't think that is how tarrifs work. Why do they have a tarrif on something made in the US?"

I said, "More than likely, they use materials they have to get from overseas distributors."

She seemed shocked. "Well that isn't right then! They need to deal with the tarrifs! They are the ones who decided to use materials from overseas!"

I looked at her and said, "That's not how tarrifs work. That is what our government has tried to tell us, that businesses will absorb the tarrifs, but that isn't how the reality works. Every business will always pass the tarrif costs onto the end consumer. This is why everything is costing so much more now. We are paying the tarrifs."

"That's not right! We shouldn't have to pay that!"

"That is how businesses have always operated and always will."

I wish people understood the basics of economics. They are too easily fooled.
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MyGirlPhotoswell · 61-69, M
And I'm sure she, and others also don't understand that's how taxes also work. When local, State and federal puts a tax on something, the consumer pays it.... That's how it works and has always worked.

I love paying the B&O taxes on my utilities......
texasgamblerguy · 46-50, MNew
I would say every tariff and every product have different impacts. This list of things are usually combined in any product cost from a tariff. The supplier can eat some of the cost, the middle man can eat some of the cost, or the consumer can eat some of the cost. The fact is usually all 3 divide the cost, however rarely do 3 participants share the cost equally. Also remember substitution, or living without a product. Then often it leads to deflation in an import product. I am not particularly a fan of tariffs, but the impacts on the overall economy are very overrated. That does not mean I do not feel bad for individual companies who deserve a more stable economic policy.
samueltyler2 · 80-89, M
@texasgamblerguy when you buy anything don't you get to see the sales tax listed? Tariffs are just that, they are essentially taxes you are paying indirectly to the federal government.
justanothername · 51-55, M
@samueltyler2 From memory of shopping in the US, ALL costs associated with the purchase price of the product are listed on the invoice receipt. (That SHOULD include any tariffs)
samueltyler2 · 80-89, M
@justanothername you are incorrect. Taxes are printed, tariffs are not yet. We have no VAT so have no idea what the total tax cost involved is.
Northwest · M
General Motors may absorb tariffs for a while, but at some point, they will need to start firing people. But not every company is a general motors.

However, not all businesses are General Motors. Small businesses, accounting for nearly 45% of the US GDP will get hard, because they operate on thin profit margins.

I wish people understood the basics of economics. They are too easily fooled.

We have a President who convinced them this is the way it is. A President who the Wall Journal Journal thinks is illiterate when it comes to economics, and a secretary of commerce who does not understand the first thing about commerce.
Northwest · M
@texasgamblerguy
Grocery stores sustain on low margins, gas stations substain on low margins. Your make generalizations without facts.

Every single thing you say is fact free.

Grocery store, are generally not small businesses. Not to mention that they do not generally absorb price hikes from suppliers. That is with the exception of those that choose to absorb some costs to remain competitive or for promotional purposes, and it's only for short durations.

But feel free to provide "facts" proving differently.
@texasgamblerguy you just keep digging your hole deeper, on all fronts, confirming you are talking out of your MAGA @$$
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Khenpal1 · M
I think one will see the impact within one year , dollar is loosing 1 % per month , inflation up , people will buy less . One tea plantation owner told me he will stop exporting to USA all together, the result will be less choices.
PHlover19701 · 56-60, M
Ugh....I agree with you.
tindrummer · M
Does she wear a red hat with 4 letters stenciled on the front?
FoxyQueen · 51-55, F
@tindrummer She's Christian, so I am assuming she may not be a rabid follower, but definitely gave the vibe check that she believed the Pedophile in Cheif's rhetoric.
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FoxyQueen · 51-55, F
@Nick1 He'll just get his people to fake the numbers or be fired like he just did.
samueltyler2 · 80-89, M
That is how this POTUS and his administration works. The gaslight an entire population.

 
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