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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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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 it is unfair though that the cost of the tariff on an item, aka tax is not apparent to the. Consumer. At least i. Europe you are told how much the VAT is.

texasgamblerguy · 46-50, MNew

@samueltyler2 It is a poor argument. Why the hell do I care how a product got to whatever price it is? I care if it worth 50 bucks to me. They do not break down every component of a product cost to me, the labor cost, the regulatory cost, etc. Either I wanna pay $50 for it or I do not. It makes no difference in my decision if it $3 or $15 of it is tariffs. Also it's a pretty impossible number to calculate fairly. Simply using the tariff% does not give a fair number.

FoxyQueen · 51-55, F

@texasgamblerguy I have no empathy to give to companies. If they can't afford to be in business without pushing costs onto the consumer, maybe they shouldn't be in business.

texasgamblerguy · 46-50, MNew

@FoxyQueen Not sure I really understand your stance? I thought you were against the tariffs? Regardless we should all want stable policy from governments?

FoxyQueen · 51-55, F

@texasgamblerguy Or srable governments lol

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texasgamblerguy · 46-50, MNew

@FoxyQueen I don't mind a government shaking things up from what I think have been decades of policy I do not love. I do however like a less chaotic trade policy approach.

Northwest · M

@texasgamblerguy

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.

That's a lot of cans which amounts to a whole lot of beans.

The fact is usually all 3 divide the cost

You're coming up with a brand new model for commerce and there's nothing factual about it.

A stainless steel exporters in Canada, is not going to lose 25% on every $100 they sell me, and I'm not going to lose 25% on every $100 worth of ball bearings I sell, especially if their profit margin is 10% and my profit margin in 10%.

I will be out of business fast. Not every company is a General Motors.

So my only option is to raise my prices.

the overall economy are very overrated

🤣 Do you think tariffs grow on trees?

[media=https://youtu.be/78Ubd_NkWvM]

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FoxyQueen · 51-55, F

@texasgamblerguy I just think a stable government will create stable policy, but maybe I'm being idealic.

justanothername · 51-55, M

@texasgamblerguy Trump is all about disruptive chaos. He’s also about bankrupting business.
Both the Fed and Wall Street prefer known predictability in order for business and investing to grow.Trump is not bringing ANY of this to his Presidency.
Expect the true effects of the global tariff impact to be revealed in the economic results at the end of this quarter and expect growth to be revised downward.

samueltyler2 · 80-89, M

@justanothername i have been moving my i vestments into more conservative things. I have even considered buying some actual gold!.

texasgamblerguy · 46-50, MNew

@justanothername That's great stock market has ripped since the early April panic. Stock market crushed it till Covid in his 1st term, then even held up pretty good in the 10 months after Covid. You would have to argue the economy in his first 38 months was making people pretty happy?

texasgamblerguy · 46-50, MNew

By the way we have the trifecta government jobs down, illegal immigrant jobs down, citizens jobs up. I am pretty good with that combination if it continues,

Northwest · M

@texasgamblerguy

That's great stock market has ripped since the early April panic.

The Wall Street Journal (if you don't believe the woke media) has multiple analysis that detail it.

To sum it up: the market no longer believes what Trump says about the tariffs, so they decided to ignore him and believe it's business as usual.

Stock market crushed it till Covid in his 1st term,

It's called "maintaining the trajectory it was on". Same with unemployment.

then even held up pretty good in the 10 months after Covid.

Yes, thanks to consumer spending, fueled by the Multi-Trillion injected into the economy to keep it from collapsing. But if you have not noticed, Trump, in his second term, just as in first term, inherited a sky-rocketing stock market.

Not that the stock market is the economy.

texasgamblerguy · 46-50, MNew

@Northwest WSJ is no bible of anything, they predicted horrific things for our economy back in April with everyone else in the main stream economy. If you love the WSJ so much though and other publications you would agree Jerome Powell should cut rates.

Northwest · M

@texasgamblerguy

WSJ is no bible of anything

It's better than your "out of thin air" analysis.

hey predicted horrific things for our economy back in April with everyone else in the main stream economy.

Provide an example and I will guarantee that if Trump had done what he promised, the predictions would have been realized.

Even a casual observer will tell you that every single time Trump backed off, the market recovered.

And what's really pissing him off now, is that the job market is not going the way he wants.

Worse, the net effect of the tax cuts he promised big business, is starting to appear in the form of potential $Bs in additional profit. What did the Tech industry do? Laying off 15%+ of their workforce, so this does not trickle down.

If you love the WSJ so much though and other publications you would agree Jerome Powell should cut rates.

The WSJ is hinting that if the September job report is going to be bad, they want Powell to cut rates, and he probably will. So, what's your point? Should I make stuff up?

FoxyQueen · 51-55, F

@texasgamblerguy I have blocked this user. Making up what they want to believe are facts does not makw them so and when you start flinging insults at having that pointed out is an instant block.

justanothername · 51-55, M

@BlueGreenGrey That’s not intimidation, that’s called giving a break down of the costs on the invoice. You already get that on your invoice when it lists the sales tax when you make a purchase at your local store or restaurant. Amazon just wants to add the cost of the tariff tax to that list as it will be incorporated into the price hike that the tariff caused.

Dementia Donny just wants to sneak that tariff in under the table and not tell you that he’s shafting you.

samueltyler2 · 80-89, M

@justanothername Amazon first said it would, then bowed to TACO pressure.

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.