Zig
Well-Known Member
“Scale this out across all kinds of different industries.” Or is it we’d rather set aside our regulation in the name of their efficiencies? Why are imports so cheap? Our laws or their efficiencies?Mmmm, it's a little more complicated than just "How much did the price go up".
Think of it like throwing a stone into a pond with ripples that spread out from the point of impact.
- Tariffs in place on assembled/finished products, as well as raw materials, result in increased production costs which are then passed to the consumer so as not to affect the balance sheet which is all Shareholders care about. "Ford" is beholden to the shareholders as much, if not more so, than the CEO and the Board.
- Since the consumer now has to deal with increased costs of what is, essentially, the same car it was a year ago, a lot of people tend to either buy something else entirely or choose not to buy anything until they are more stable in these "uncertain economic times".
- Less people purchasing a product means that company doesn't need to maintain as large a workforce to produce said product. Let's say 1 or 2 lines a day instead of 3 full shifts. People get laid off.
- Less people working for that company show up on a balance sheet as "increased profits" however that is actually a reduction in OpEx. Unfortunately this looks good for a quarter or two until companies start to realizse that the decrease in opex is offset by the decrease in revenue.
- Less people working means less disposable income for individuals or families. People tend to be risk averse and so aren't making large purchases (houses) or discretionary purchases (fun stuff like cars etc).
I'm sure there are other factors involved that I'm unaware of. And the example above is just one company. Now what about people in the Computer and Tech industry? Stuff coming from china is still up in the air for costs. What about other people at dealerships selling german cars? Not many people buying when they have to pay the markup so less people working there too. Scale this out across all kinds of different industries.
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