What are you thinking, CYCLING RELATED, on tariff subject

[dsimon]

All this tariff talks, in laymans terms what would happen if everyone stopped using tariffs

[Fat Cat]

Originally Posted by dsimon

All this tariff talks, in laymans terms what would happen if everyone stopped using tariffs

The End of the World

[jamesdak]

Originally Posted by Fat Cat

The End of the World

Cue REM.

[deluz]

I am 67, semi retired and spent a lot of money ($10K) on two new bikes the past few years. I am done buying bikes and expensive parts. From here on it will just be consumables like tires.

[C40_guy]

Originally Posted by 72gmc

I just hope whatever policy comes to life, it doesn't have severe impacts on small businesses such as SimWorks.

Here's some real world feedback...

I'm a fractional CRO for a $3M industrial manufacturing company. The expected tariff increases are putting a lot of uncertainty into our FY25 planning. Some of our components are made overseas, and bringing them onshore presents huge risk. Moving stainless steel molds from one supplier to another (to the US) represents both cost and risk of loss. Seems many molds are "broken" or lost by the original supplier, so new molds have to be created from scratch.

For a small company, the choice may be to either bear the higher cost of tariffs or potentially shut down the business due to the challenges of moving some manufacturing onshore.

[CAAD]

Originally Posted by dsimon

All this tariff talks, in laymans terms what would happen if everyone stopped using tariffs

Free trade.

[Alistair]

Originally Posted by dsimon

All this tariff talks, in laymans terms what would happen if everyone stopped using tariffs

Lower consumer prices at the cost of accelerated globalization of many industries.

Super simplistic example:
US factory produces socks at a cost of $2/pair. Consumer price on the shelf is $2.50.

Chinese factory produces similar socks at a cost of $1/pair. Consumer price on the shelf is $1.50.

US factory workers demand a tariff of $1.25/pair to ensure they maintain their market share.

Chinese socks now priced at $2.75.

US company can now price their socks at $2.70, so they realize an extra $0.20 profit per pair.

US sock factory workers protected, but the rest of the nation is paying $1.20 more per pair than they would be in a free/open market.

And that's just a plain protectionist tariff. Many tariffs are retaliatory and cross industries (see the chicken tax I mentioned earlier). We all pay more for trucks today because some American farmer 50 years ago couldn't compete in the European chicken market.

My position: There are ~2 cases where tariffs are valid...
1. The foreign competitor is ignoring international law or norms (environmental, labor, whatever)
2. Industry that is deemed vital to maintaining the security of the nation (thought this one is prone to all sorts of slippery slopes - Jones Act for domestic shipping/ship building is a related example)

Tariffs should not be used for basic protectionism - if an industry can more cost effectively produce goods elsewhere, let them do so. Domestically, the "fix" is not to protect legacy industries but instead ensure a robust safety net and retraining (which we largely fail to do).

[sg8357]

Originally Posted by dsimon

All this tariff talks, in laymans terms what would happen if everyone stopped using tariffs

The answer to our trade balance problem is not to close our markets, cut imports, or collapse trade. Millions of American jobs are tied to imports. The way to a better life is to open markets now closed, improve trading conditions, and to expand our exports. We learned that lesson half a century ago when we tried to balance the trade deficit by erecting a tariff wall around the United States. The Smoot-Hawley tariff ignited an international trade war and helped sink our country into the Great Depression.
Ronald Reagan, September 13, 1986

[CAAD]

Originally Posted by Alistair

Lower consumer prices at the cost of accelerated globalization of many industries.

Super simplistic example:
US factory produces socks at a cost of $2/pair. Consumer price on the shelf is $2.50.

Chinese factory produces similar socks at a cost of $1/pair. Consumer price on the shelf is $1.50.

US factory workers demand a tariff of $1.25/pair to ensure they maintain their market share.

Chinese socks now priced at $2.75.

US company can now price their socks at $2.70, so they realize an extra $0.20 profit per pair.

US sock factory workers protected, but the rest of the nation is paying $1.20 more per pair than they would be in a free/open market.

And that's just a plain protectionist tariff. Many tariffs are retaliatory and cross industries (see the chicken tax I mentioned earlier). We all pay more for trucks today because some American farmer 50 years ago couldn't compete in the European chicken market.

My position: There are ~2 cases where tariffs are valid...
1. The foreign competitor is ignoring international law or norms (environmental, labor, whatever)
2. Industry that is deemed vital to maintaining the security of the nation (thought this one is prone to all sorts of slippery slopes - Jones Act for domestic shipping/ship building is a related example)

Tariffs should not be used for basic protectionism - if an industry can more cost effectively produce goods elsewhere, let them do so. Domestically, the "fix" is not to protect legacy industries but instead ensure a robust safety net and retraining (which we largely fail to do).

Well said.

My gut tells me these proposed tariffs are purely retaliatory.

[Rpoole8537]

Spending too much time thinking and worrying about what might happen is fruitless. I do know, that an individual who can't make money in a casino, doesn't know too much about how to handle money.

[72gmc]

Originally Posted by C40_guy

Here's some real world feedback...

I'm a fractional CRO for a $3M industrial manufacturing company. The expected tariff increases are putting a lot of uncertainty into our FY25 planning. Some of our components are made overseas, and bringing them onshore presents huge risk. Moving stainless steel molds from one supplier to another (to the US) represents both cost and risk of loss. Seems many molds are "broken" or lost by the original supplier, so new molds have to be created from scratch.

For a small company, the choice may be to either bear the higher cost of tariffs or potentially shut down the business due to the challenges of moving some manufacturing onshore.

Thanks for the notes. I'm going to guess the business I named will just have to bear the cost given they source from Nitto and Honjo, among others ...