Economics Thread

I would disagree with those saying protectionist policies haven’t worked for other countries, and I’m confused about places like Brazil being used as examples. China and most of Europe have granted their businesses advantages with things like subsidizing operating costs, currency manipulation, requiring IP be surrendered from non native companies, and partial government ownership.

How many Chinese or European companies manufacture their products in the US and import them back into their home country?
 
thethe said:
https://twitter.com/x/status/1963314419947241590

Price elasticity. This willc ontinue to be a push pull where ultimately its a negotiation between the suppliers and corporations who absorbs most of the tariff.

This is the first time in 40 years foreign suppliers will face some pushback on costs.
Click to expand...
They're not lowering prices because they are being tarrifed. They are lowering prices because the economy is so bad that customers can't afford higher prices. So businesses margins will suffer, particularly small business.

As an aside, this is another example where you ignora any data showing businesses are passing costs (like chop posted yesterday) and victory lapping any data that shows the alternative
 
thethe said:
https://twitter.com/x/status/1963314419947241590

Price elasticity. This willc ontinue to be a push pull where ultimately its a negotiation between the suppliers and corporations who absorbs most of the tariff.

This is the first time in 40 years foreign suppliers will face some pushback on costs.
Click to expand...
In competitive industries, businesses will compete on prices to the point where economic profit is zero (covers cost to product, opportunity costs, worth the business owners time, etc.). Bezos has this famous saying “your margin is my opportunity” which sums this up with a nice flourish.

Because you’re artificially raising the cost floor, it won’t impact consumer demand but firms will choose to exit because it’s no longer economically viable to compete.

You’re likely right that the big firms with weight will be able to strong arm suppliers to lower prices to eat these costs, but small business won’t have that same capability. It’s why we’ll likely see some combination of suppliers, importers, and consumers sharing the burden of tariff costs. The split between those three will vary across industry.
 
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