I did a Google search for “retailers raising prices because of tariffs” and the link below was the first result. Seriously, do you really think that retailers are just going to eat the cost of tariffs for the next three years?
Retailer's prices are not set to be "fair", they're set to maximize their return on the supply vs demand curve. In other words, increasing prices will generally cost them money, rather than make them money. In other other words, they expect that if they charge 5% more, they will trend towards selling 6% less.
So in general they end up stuck between a rock and a hard place in a situation like this. The most logical path forward would be to work on supporting domestic supply chains, not subject to tariffs, and helping them to gradually reduce prices through increasing both volume and efficiency.
But the problem that concept runs into is that there's about a coin's flip chance that in 3 years these tariffs will simply be reversed. And any domestic suppliers that were relying on them for a competitive edge will simply be left buried. It thus discourages any sort of meaningful investment in these domestic providers.
Retailers typically have thin margins, e.g. 2%. They're paying $0.98 to sell something for $1 so they can keep $0.02. Not all of the $0.98 is imported products (a lot of it is salaries and rent etc.), so a 10% tariff might only raise their costs by 5%. But then they're paying $1.03 to sell something for $1. Do they care more about maintaining their volume at that point? Of course not, they're going to raise price instead of making a loss. But so are their competitors, because their costs went up too, which prevents them from losing sales to the competition anyway. Then they only lose sales to customers being unable to afford it, e.g. because they have to spend more on food and then have less to spend on new cars.
This is true of most taxes in a competitive market. Competition was keeping margins low so the money has to come from higher prices or lower salaries, and salaries are sticky so it's usually higher prices. So if the tariffs are instead of some other taxes, it's just a revenue-neutral tax change, not inherently raising prices. But if the tariffs are on top of other taxes then it's a tax increase which gets passed on as higher prices.
Food is about 90% domestically produced [1], so tariffs are inconsequential there. The things that are going to be largely affected by tariffs are things like imported electronics, furniture, and so on.
The tariffs are primarily hitting the discretionary sector of products, which means people can simply stop buying them. There's also product replacement as an option. For instance the next time somebody's coffee maker breaks they end up buying a French press only to discover that not only is it way cheaper (no filters!), but it never breaks and makes way better coffee anyhow! (Pro Tip: don't use boiling water)
Coffee and chocolate are not domestically produced, nor are bananas which are like the potatoes of the fruit world in terms of how productive they are.
There are lots of nondiscretionary products that take a while to flow through to the point you notice them. The parts to repair the machines that make things for example. Or at a low level, the inserts used in mills to make things out of metal. There are other inserts available, but they aren't as good so they need replacement more often.
There actually are already domestically produced coffees in America! And if other coffees end up forced to significantly raise costs, that would increase the market share and production of these coffees. It could end up being a major economic boon to places like Puerto Rico. The link I mentioned also covered non-domestic inputs, and not just final products. It's about 4.7%.
The lion's share of imports are going to be alcohol and purchasing produce outside of season.
It seems unlikely that we can grow enough coffee in Puerto Rico and Hawaii to make up for the difference. It might be good for those producers though.
Do you mean the lion's share of food imports or imports in general? Lots of seafood is processed elsewhere and imported the US. Strangely it appears ground beef is imported to the US even though we are a net exporter of beef.
> Food is about 90% domestically produced [1], so tariffs are inconsequential there
Prices are determined at the margin. Domestic producers suddenly have less foreign competition. That lets them raise prices. (Which is what we’re seeing, though not at an accelerated rate to what food prices were doing in ‘24 [1].)
> Retailer's prices are not set to be "fair", they're set to maximize their return on the supply vs demand curve.
I would add to that statement the context of the market and competitors. Even if retailers east some % of cost increase, this is still a pretty large price increase pressure.
Fair point regarding possible tariff reversal effect on industry investment!
Rock <-USA-> Hard place. At least deflation is not going to be an issue...
It’s just a summary of the recent Q2 earnings presentations from the big retailers (the writer cites this 1st sentence). Look at those reports if you want primary sources
What do you mean by lack of citations? You mean self-linking to their own content? All the other alternatives, including the one you said "is a better source", do the exact same thing. I am having a hard time finding the ideological bias you're talking about in the El País article.
The CNBC article is actually the best, since it corroborates its numbers with their own price research.
Perhaps this is just coming from a finance background. But I’m not a fan of folks quoting numbers from “financial reports” without saying what report they’re citing.
> having a hard time finding the ideological bias you're talking about in the El País article
To be clear, I don’t allege this article has a bias. Just that I’m going to be sceptical of a paper calling something out that aligns with their priors.
I see what you mean now. The CNBC article does a better job at discussing the technical impacts, while both the NPR and El País are more oriented toward social impacts.
What is most surprising to me is the price increase for dairy products. I wonder how much of that increase, if any, is caused by tariffs vs other factors.
A comment I made earlier in this conversation has been downvoted a few times. People are choosing sides and using their votes in attempt to silence voices that question the Trump regime. Fortunately, I have plenty of karma to burn.
True. However, I think it’s important to note that the governor refused to be intimidated and continued mocking Trump on social media. I don’t always agree with Newsom’s politics but I sure like the fact that he reuses to bend the knee to Trump.
That works because you are a senior developer who knows how to properly use the AI tools. What 10 years from now? What happens when senior devs are retiring and we do t have replacements since we replaced junior devs with AI?
Well I'd probably consider myself a materialist but I'm not sure I'd agree. The evidence to me seems that it can really only come from two places: additional compute or new breakthroughs in AI learning. Compute's coming, certainly, but that only has the potential to improve things if it's added in conjunction with a commensurate AI breakthrough. I think the trend in improvement for transformer could be logistic, not exponential, like a lot of the snake-oil salesman like to state. And while there's plenty of evidence for compute there isn't much for the AI breakthrough that leads to an exponential jump, and if it does exist it's a trade secret, so until we know we don't know.
Capital doesn’t bring along the culture of where it comes from or become part of the polity. Capital doesn’t need to be educated or housed and isn’t eligible for welfare benefits.
When do we get to call Trump a dictator? When he ignores court rulings? When he floods the zone with illegal executive orders? Do we have to wait until he calls himself a Dictator and insists everyone else do the same?
If you are criticizing Trump, did you have any credibility with that part of the public to begin with?
Not saying there aren't reasons to avoid name calling. But I feel like battle lines are fixed by now. I don't feel like "Good point" is a likely reaction to anything said by anyone.
The only poll that matters is the election. And despite some of his voters disapproving, there is very little chance of them voting for the opposite party.
My estimation is 5% of the US is fully supportive, 15% are manipulated into thinking that all of this is necessary through very selective coverage, and some 10% don't necessarily like everything, but still prefer this over "other team" being in charge.
Meanwhile, 50% live in apathy (be it due to burden, a means of escape, or otherwise)and that's probably the biggest shame. I can only hope enough of those people rise up or wake up before it's truly irreversible. There's probably so much damage as is to take decades to repair.
I am talking about removing fascism. Remove its supporters from office, jail the ones who broke the law, and reverse any fascist laws or policies that have been put in place.
Also, Trump does not have the support of 50% of the population. At best he has 20% of the popularion which are very vocal plus the support of many of the richest americans.
Sounds like maybe a positive spin on the erosion of the fundamental building blocks of our democracy. This to me is a strange take, if I’m reading that correctly, what do you mean by it?
I mean that the US, my country, effectively ceased to exist in its old form on January 20, 2025. The Trump regime has been working aggressively to destroy all vestiges of our democracy and replace it with autocratic rule.
This is some bullshit and pisses me off, but here we are.
While I’m not happy they are changing the text of the constitution on this website, I’m glad they are such bumbling idiots about it.
“The old world is dying, and the new world struggles to be born; now is the time of monsters.”
Trump received 49.8% of the popular vote.