Stock Market Evaluation 9/20

[Andrew_Jackson_FTW]

 

[Mashmont]

Are tariffs bad for growth? Yes, say five decades of data ...​

Are tariffs bad for growth? Yes, say five decades of data from 150 countries - PMC
AI Overview

Economic experts confirm that the full, negative impact on the broader economy of tariffs often takes months or even years to fully materialize. This time lag occurs for several reasons, including strategic actions by companies and the gradual nature of economic adjustments.

How tariffs cause a delayed negative impact

Corporate strategy and inventory management

• Inventory drawdown: In anticipation of tariffs, many businesses "front-run" imports by stockpiling goods. This creates a cushion that allows them to delay price increases for several months while they work through their existing, untaxed inventory. As a result, the immediate impact on consumer prices is not always apparent.
• Absorbing costs to protect market share: To avoid losing customers to competitors, companies often absorb the initial cost of tariffs, which squeezes their profit margins. However, this strategy is only sustainable for a limited time. As margins shrink, businesses eventually begin passing on costs to consumers or cutting back on other expenses.
• Diversifying supply chains: Some companies attempt to mitigate tariff costs by relocating manufacturing or finding new suppliers in countries not subject to tariffs. This process is slow, expensive, and can cause temporary disruptions, but it also delays the full effect of the tariffs from being realized.

Gradual economic adjustments

• Pass-through to consumers: The actual increase in consumer prices from tariffs is typically not a sudden shock but a gradual process. Economists have observed that the "pass-through at the retail level tends to be very gradual". For some goods, it can be months or years before the full price increase is passed on to consumers.
• Investment and labor impact: The long-term economic damage from tariffs often comes from reduced business investment and job growth, which takes time to manifest. As uncertainty around tariffs lingers, companies may pause hiring and investment decisions. Yale's Budget Lab estimates that 2025 tariffs will significantly lower payroll employment by the end of 2025 and 2026.
• Reduced productivity: Tariffs can reduce a country's overall productivity and income by creating inefficiencies in resource allocation. Studies indicate that this can lead to a persistent decline in GDP over several years.
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• Historical evidence: Major trade disputes throughout history, such as the 1930 Smoot-Hawley Tariff Act, show that tariffs take time to inflict their full economic damage. Even recent examples show that markets can recover relatively quickly from initial volatility, but the underlying trade war takes much longer to resolve, continuing to influence long-term trends in corporate earnings and supply chains.

Just like climate change. “Could be bad over time”. Negative people are tiresome

 

[SweetTea]

From one of your own

And I disagree, just like I am sure you disagree with Bill Clinton’s take on illegal immigration back when he was President.

I have a few simple, but important questions. According to Democrats, higher taxes are good even though they slow the market because of more government revenue. If tariffs are taxes, why are they not good? Is it just because everyone must pay them instead of just some? That doesn’t make a lot of sense on a practical level, just an emotional one.

If tariffs are so bad, why would countries retaliate with tariffs of their own? Wouldn’t that be like shooting themselves in the foot?

On Reagan’s comment, I also disagree about competition being lessoned. That only happens when taken to the extreme. Nobody is talking about tariffing imports to a point where they are no longer competitive in he US market, but rather tariffing to a point where US products are competitive with imports. If the US made widget is the same price as the Chinese one, many will buy the US one. If the company that makes the Chinese widget sees decreasing sales revenue, they will either upgrade the quality of their product, or lower the price. It is a win/win.

Again, most people don’t think for themselves. They just parrot what they have been told. This is why the idea of Socialism has gained so much traction among many in the Democratic Party. There is a lack of critical thinking skills that has been purposely fostered in our education system.

 

[Luckyone]

And I disagree, just like I am sure you disagree with Bill Clinton’s take on illegal immigration back when he was President.

I have a few simple, but important questions. According to Democrats, higher taxes are good even though they slow the market because of more government revenue. If tariffs are taxes, why are they not good? Is it just because everyone must pay them instead of just some? That doesn’t make a lot of sense on a practical level, just an emotional one.

If tariffs are so bad, why would countries retaliate with tariffs of their own? Wouldn’t that be like shooting themselves in the foot?

On Reagan’s comment, I also disagree about competition being lessoned. That only happens when taken to the extreme. Nobody is talking about tariffing imports to a point where they are no longer competitive in he US market, but rather tariffing to a point where US products are competitive with imports. If the US made widget is the same price as the Chinese one, many will buy the US one. If the company that makes the Chinese widget sees decreasing sales revenue, they will either upgrade the quality of their product, or lower the price. It is a win/win.

Again, most people don’t think for themselves. They just parrot what they have been told. This is why the idea of Socialism has gained so much traction among many in the Democratic Party. There is a lack of critical thinking skills that has been purposely fostered in our education system.

You are entitled to your opinion. but I respect Reagan's more.

 

[Mac1958]

It's pretty clear now that Bessent thinks he can run this whole thing hot -- so, higher growth and higher inflation. I'm guessing we'll see the "target inflation rate" increased to at least 3% from 2%.

And here ya go:

 

[SweetTea]

since American corporations are the ones paying the tariffs

Where do you get this information? This is totally false.

 

[Mac1958]

Where do you get this information? This is totally false.

You're saying that American companies don't pay the tariff?

Who pays it? The exporter? The other country's government? Elvis?

Who???

 

[Mac1958]

Where do you get this information? This is totally false.

Please answer my question.

You're saying that American companies don't pay the tariff?

Who pays it? The exporter? The other country's government? Elvis?

Who???

 

[SweetTea]

Please answer my question.

You're saying that American companies don't pay the tariff?

Who pays it? The exporter? The other country's government? Elvis?

Who???

I know who physically pays the tariffs. What I am saying is that much of that has been absorbed by foreign manufacturers. PPI numbers have reflected this.

 

[Mac1958]

I know who physically pays the tariffs. What I am saying is that much of that has been absorbed by foreign manufacturers. PPI numbers have reflected this.

You said I was wrong.

I was not.

 

[SweetTea]

You said I was wrong.

I was not.

You were attempting to imply that corporations were footing the entire bill for the tariffs. That is a common tactic the MSM uses and it has fooled quite a few ignorant people in the country. The fact is, that foreign manufacturers have eaten much of the tariffs by reducing the costs of their goods.

 

[Mac1958]

You were attempting to imply that corporations were footing the entire bill for the tariffs. That is a common tactic the MSM uses and it has fooled quite a few ignorant people in the country. The fact is, that foreign manufacturers have eaten much of the tariffs by reducing the costs of their goods.

Nope. That just happened in your mind, sorry.

I've specifically laid out several ways companies can and are mitigating these costs. Several times. And I've been right -- appropriate, since I have a long background in exactly this.

So you don't know my politics. Play with someone else.

 

[SweetTea]

Nope. That just happened in your mind, sorry.

I've specifically laid out several ways companies can and are mitigating these costs. Several times. And I've been right -- appropriate, since I have a long background in exactly this.

So you don't know my politics. Play with someone else.

PPI numbers don't lie. Spin away, but be prepared for inflation numbers to remain very similar to prior to tariffs. The beauty of that is that much of the money in the US coffers has been essentially donated by foreign manufacturers. Since you people like to call a tariff a tax, look at it like other countries are picking up part of our tax burden. I know, orange man bad, but seriously, put on your thinking cap.

Everyone on this board knows your politics. You aren't even a fence sitter. You claim in be an Independent but espouse nearly every left-wing policy that is ever presented.

Nobody on this board respects your opinion.

Go play with yourself.

 

[odanny]

Just like climate change. “Could be bad over time”. Negative people are tiresome

So are stupid people.

 

[odanny]

Everyone on this board knows your politics. You aren't even a fence sitter. You claim in be an Independent but espouse nearly every left-wing policy that is ever presented.

Nobody on this board respects your opinion.

Go play with yourself.

Speak for yourself.

"Nobody" = MAGA dipshits.