Goldman Sachs has come out and said president Donald Trump’s tariffs have had a bigger impact on consumer prices than originally thought. Additionally, the bank has said what the rest of us already know: the tariffs are being paid entirely by United States businesses and consumers; not the Chinese government.
Financial Experts Warn: Americans WILL Pay The Cost Of A Trade War
Some sites have been warning that prices will spike on many items (food included) thanks to the taxes levied on imported Chinese goods and the mainstream media is finally admitting that taxation isn’t good for an economy. Goldman Sachs also said that the prices American consumers and businesses pay are higher because China is covering the cost of the additional tariffs.
“One might have expected that Chinese exporters of tariff-affected goods would have to lower their prices somewhat to compete in the US market, sharing in the cost of the tariffs,” Goldman said according to CNBC. But that’s not how business works. When the cost to make a good goes up, the cost to buy that good goes up to cover. Businesses don’t go into business to lose money and just because we’re talking about Chinese goods, that doesn’t change the finite laws of basic economics.
From the very beginning, Trump has repeatedly and inaccurately claimed that China will pay for tariffs imposed by the U.S. “However, analysis at the extremely detailed item level in the two new studies shows no decline in the prices (exclusive of tariffs) of imported goods from China that faced tariffs.”
https://www.shtfplan.com/headline-news/financial-crisis-the-trade-war-cost-americans-1-4-billion-per-month-last-year_03052019
Additionally, in order to cover the increased costs of goods, U.S. producers have even hiked their prices in response to protection from Chinese competitors, the bank said. Goldman Sachs predicts that the U.S. and China will come to some sort of an agreement later this year. “Our baseline expectation is that the U.S. and China will strike a deal later this year. We think this would come in the form of a gradual, staggered reduction in tariffs on a last-in, first-out schedule,” the bank said. “There is, however, a risk of further escalation,” Goldman said.
Further escalation could damage the economy and would make Trump’s reelection chances suffer.
The most recent round of trade talks, which ended on Friday with no final agreement, was overshadowed by President Donald Trump’s decision to more than double tariffs on $200 billion of Chinese goods, from 10% to 25%.
White House Economic Adviser Larry Kudlow on Sunday said that Trump and Chinese President Xi Jinping will likely meet at the June G-20 summit in Japan. He said that he expects China to retaliate against the U.S., and acknowledged that the U.S. will pay for China tariffs. –CNBC
Other investment banks are preparing clients for a “worst-case scenario.” According to “experts,” that scenario would be a fight that sends the S&P 500 into a correction, which would be 10% off that key indicator. The companies likely to be hardest hit, say the experts, are likely Boeing, Apple, and Caterpillar. They are all down about 5% this week already, according to another report CNBC.
Then the financial pain always ripples into the metals, mining, and automobiles sectors – passing on higher costs to the consumers, or cash strapped Americans. “Fasten your seatbelt and don’t hold your breath,” Bank of America strategists wrote in a note this week.
Well Duh!
The object of tariffs is to make you STOP buying Chinese shit.
I mean, is this really news to anyone? SHTFplan continues to circle the intellectual drain.
The abandonment of tariffs with “Free Trade” fell upon US households. All one needs see is the rust belt.
“Protection of our own labor against the cheaper, ill-paid, half-fed, and pauper labor of Europe, is … a duty which the country owes to its own citizens.”
Daniel Webster
“The wealth … independence, and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation … ought to endeavor to possess within itself all the essentials of national supply. These compromise the means of subsistence, habitation, clothing, and defence.”
Alexander Hamilton
“Free trade results in our giving our money … our manufactures and our markets to other nations. … It will bring widespread discontent. It will revolutionize our values.”
William McKinley
“Open competition between high-paid American labor and poorly paid European labor will either drive out of existence American industry or lower American wages.”
William McKinley
EXACTLY !!! Tax policy is the tail that wags the dog for every government policy. Taxes either penalize people or incentifies them to certain actions.
Tariiffs create artificially higher prices. Higher prices make people AND businesses seek lower cost suppliers, transfering imports from China to other countries who also need to export; OR produce the product in the USA and create American jobs.
This action by TRUMP actually spreads Global GDP around, OR returns it home to the USA. There is no good reason for American wealth to be transferred to China. I mean, what have they done for US, besides steal our technology ??? Time to cut China’s outstretched hands off !!!
Anything provided by China to American Consumers can be purchased elsewhere in the world, and cheaper. It’s the Economic Principle of SUBSTITUTION in action. 🙂
Careful, you are going to put all of the dollar stores out of business.
Let’s not forget Wally World too.
One can refer to China as the sleeping giant of manufacturing that has been awakened; its strength was low cost mass production. Northern Europe has been spared its effects because of their production of very high quality goods that China, until recently did not compete in. I seen the incipient stages of a change when BMW, a well known high quality producer opened a manufacturing facility in China.
It’s a given that the 20th century was dominated by the US. It appears that the 21st century has China coming into that position. One variable is AI / Robotics which may so alter manufacturing that low cost labor, China’s advantage, is negated by no cost labor. That’s a dynamic for another discussion.
You don’t understand how they operate culturally.
If you give them something YOU designed and further explain what everything’s supposed to do in there, and what you’re looking for in the final product… they’re like a Xerox machine. Very accurate. They can also pull off some saves you didn’t anticipate needing.
The problem comes in when you let them design. Or give them too much in the way of vague instructions. Or give them conflicting demands which… lemme tell you at my company is pretty much par for the course (internal politics).
Blame the US companies for badly designed dogshit, it doesn’t have to be that way.
People need to get over buying cheap foreign shit!
Thats the whole problem, all these dummies have wanted was cheap foreign shit,,,
So what then happens?
USA ends up with no manufacturing capability.
Bring it back home
Comments from “sources close to the trade talks” via Reuters:
“…demands for curbs on Chinese industrial subsidies and a streamlined approval process for genetically engineered US crops.”
Seems to me that US corporations get their fair share of subsidies themselves…as do most corporations in most countries. Isn’t this what the WTO is for? As far as the GMOs, seems the Chinese aren’t so easily convinced.
“…commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.”
The FRN is the most manipulated currency in the world. And who would blame China for not giving access to their financial services. That would be the same as giving up your sovereignty if Wall Street or the City of London got hold of your markets.
“Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical trade deal.”
Make what you want of these comments but it sounds like the US is asking some things of China that they will never agree to.
China is a country where men are so beaten down that they even get into fistfights arguing about which of them is going to carry somebody else’s luggage because there is a dollar at stake, and the guy who wins carries eight or nine suitcases all at one time, ruining his health just to make a few cents. Our country is better. People here are not so desperate, and because of this there are lots of people going places with lots of luggage and lots of people make a fairly decent living by, among other things, carrying luggage and not fighting over who gets to do it, though some exceptions do occur but it’s not as bad as China. It’s better to spend $150 on a work lamp that is well designed and works well for more than a hundred years, than to spend $19.95 on a cheap, poorly designed and poorly made work lamp that has problems with it and won’t last twenty. China? Not for me. Buy cheap? It’s almost always better to buy good quality that costs more, works well, and lasts longer.
We didn’t start this process–the rich manufacturers did. It’s called Planned Obsolescence; a deliberately implemented strategy that ensures the current version of a given product will become out of date or useless within a known time period. This guarantees that consumers will want replacements in the future, thus naturally supporting demand.
This started with the light bulb a hundred years ago–they discovered it would last decades so made it cheaper to need replacement sooner!!
We don’t need Congress to pass laws. We have the real power. It’s time we used it. Buy American.
.
And don’t buy it from amazon or walmart.
“Buy American”
Tell that to President Trump and Ivanka, the two biggest offenders of “Buy American.” Ivanka has all of her “Sold in the USA” product lines manufactured in China including holding 16 patents there, and Trump all of his MAGA merchandise from the caps to the tee shirts to the key rings and mugs even MAGA dog/pet supplies and products named after him and his MAGA motto are “Made in China.”
The Trumps made a fortune off of NOT producing in the USA. We are not contributing to “Buy USA” and “Made in the USA” by buying any “Made in China” merchandise or his merchandise for that matter, which to date has raked in several-hundred $$$millions for which he has not paid a dime in taxes.
There’s a reason why 80% of Wall Street Execs have said that Donald Trump will be re-elected in 2020. Yeah, the Dems are definitely worse but he’s not much better. Two wings on the same bird. Time to wake up people.
Come on Folks. Patriots can stay the course and do without Chinese products for a while. The Chinese think Americans cannot stand a little discomfort, so their plan is to stay their course longer than the “whiners”. China has financially abused the USA for decades and our idiotic politicians let it happen. We finally have a President that represents American interests. For Heaven’s sake, don’t force us to return to Chinese advantage in all transactions.
It’s the Quantity vs Quality mentality.
Too many people value quantity over quality and believe the more you have the better off you are..Nobody ever said that quality wasn’t going to cost you,but I would rather only cry once from buying quality than to never stop crying from all the junk that is priced what it is for a reason..The end result of buying junk is that you typically end up spending more than if you would’ve bought quality from the start..99% of the time you get exactly what you pay for..
China has a completely different concept of the value of human life. We have what? 327 million people. China – 1386 million. Yep, about 4 times as many. They must play and live by different rules. Just the need for jobs, food, water, shelter are vastly greater. They historically have been known to sacrifice enormous numbers of their people to make a gain.The only real threat they face is internal. What happens if those needs for food, water and all are not met. Want to beat China – threaten those. Take away the ability to support themselves and one of 2 things will happen – they’ll capitulate or they’ll go to war. For them, the means to the end is always the same….. purposeful population reduction to achieve their goals – they have the numbers to lose. One small last point – they never forgive or forget when another nation harms them. Think Japan. To this day, the hatred is intense.
Nor should they on the Japan thing. Although I did ask them this once and they denied it totally and acted offended. Then again, they stopped getting material from a Japanese supplier as soon as was humanly possible.
Ever see stuff about the rape of Nanking? I’d be forgiving the Japanese when their island was at the bottom of the ocean, man.
Me personally I don’t care, didn’t happen to me, but I do feel the same way about the “former” (guffaw) Soviet Union, personally. Thanks for completely screwing my culture up you half baked Euro trailer trash.
Not for Hillary’s reasons though. I mean… come on now. Como se dice “irony”? A communist deflecting blame onto communists, that’s rich. I think she just glommed on to the fact that some of us are not really all that happy with them and it was an “aha” moment for her scapegoating bullshit. Yeah. Sorry. To garner conservative support, you kind of have to demonstrate you’re a conservative in the first place. Your liberal buddies just… sat there getting confused. I mean they yelled it because you told them to, but not because it made any sense to them.
“We have always been at war with Oceania”. Yeah Hillary, that’s about how that looked. Gotta tell you.
Anyway. What I foresaw with a Trump presidency is coming to pass. I traded not being a radioactive blast crater for eating a fucked up economy, and this is… going to fuck it up. Badly.
See… this is. I just. Sigh. All this stuff needs to happen yeah (China, Russia), but nobody really seems to have a plan that doesn’t involve sawing their own leg off to get there so… shit. Uh. Throws up hands in a “wtf” gesture.
“What happens if those needs for food, water and all are not met.”
“China has a completely different concept of the value of human life.”
Gutter oil and cardboard dumplings.
Only if you feel you need to buy something Chinese. Look, even Chinese food is American. You can stay away from buying cheap sh!t for a while.
Businesses and money typically flood any jurisdiction with little tax burden.
Money from tariffs does not go to support affected industries, but to pet projects of the govt, when no more taxes can be raised, legally.
He’s purposely trying to crash the economy but its not just him– he is in collusion with the deep state– either willingly or coerced.
Read AOL news today– investors in Bank of America expect stock market crash in next 3 months because of Trump’s trade deals. But honestly, he probably felt he had no choice– what president wants to go out like the President Kennedy?