Trade Wars and Tariffs

#5,876
#5,876
MontyPython said:
Japan, China and Europe are just gonna eat the new tax? History begs to differ. Your Trump mouthpiece there is an ass clown.

Per Grok:

Are japanese, chinese and european businesses going to raise prices due to president trump's new tariffs on these countries?

Yes, Japanese, Chinese, and European businesses are likely to raise prices due to President Trump’s new tariffs, though the extent and timing depend on various factors. Here’s a breakdown based on available information:

Japanese Businesses​

  • Impact of Tariffs: Trump’s tariffs, including a 24% reciprocal tariff on Japanese goods and a 25% tariff on automobiles and parts (reduced to 15% for Japanese cars after negotiations), significantly affect Japan’s export-heavy economy, particularly its automotive sector, which accounts for 20% of its exports to the U.S.. For example, Toyota projected a $1.3 billion profit hit in April-May 2025 due to these tariffs, and companies like Honda and Nissan are facing similar pressures, with Nissan considering plant closures in Japan.nytimes.comnytimes.comnytimes.com
  • Price Increases: The 15% tariff on Japanese cars could add substantial costs to vehicles sold in the U.S. For instance, a luxury car could see a price hike of $15,000 or more. Japanese firms may pass these costs to U.S. consumers to maintain profitability, especially since the automotive supply chain is deeply integrated and reliant on U.S. markets. Additionally, Japan’s Nikkei 225 fell 7.8% on April 7, 2025, reflecting market concerns about higher costs and reduced competitiveness.nytimes.comen.wikipedia.org
  • Mitigation Efforts: Japan has approved a $6.3 billion spending package to support businesses and households affected by tariffs, which may temporarily absorb some costs. However, analysts estimate a potential 0.8% reduction in Japan’s GDP, suggesting that price increases are likely as companies cannot fully absorb these costs long-term.nytimes.comen.wikipedia.org

Chinese Businesses​

  • Impact of Tariffs: Trump’s tariffs on Chinese goods have escalated to 145% (up from 104%), targeting a wide range of products like electronics, footwear, and appliances, which make up 46.4% of U.S. imports from China. These tariffs, combined with the elimination of the de minimis exemption for Chinese goods, severely impact e-commerce giants like Temu and Shein, which rely on low-cost shipments. Nomura Holdings estimates that this could slow Chinese export growth by 1.3 percentage points and GDP growth by 0.2 points.aljazeera.comcnbc.comen.wikipedia.org
  • Price Increases: Studies from Trump’s first term (2018-2019) showed a nearly one-for-one pass-through of tariff costs to U.S. import prices, suggesting Chinese exporters are unlikely to absorb the full cost of the 145% tariffs. Companies like Apple, heavily reliant on Chinese manufacturing, may face higher production costs, potentially increasing prices for iPhones and other electronics by up to 20% unless they shift production elsewhere (e.g., to India or Vietnam). Chinese firms are also stockpiling goods in U.S. warehouses to delay price hikes, but once these reserves deplete, consumer prices are expected to rise.jpmorgan.comnpr.orgaljazeera.com
  • Retaliation and Adaptation: China has retaliated with 125% tariffs on U.S. goods, which could further complicate global supply chains and increase costs. Some Chinese companies are adapting by expanding U.S.-based distribution facilities, but this is unlikely to fully offset the tariff impact.en.wikipedia.orgen.wikipedia.org

European Businesses​

  • Impact of Tariffs: The European Union faces a 30% tariff on goods exported to the U.S. (initially proposed at 50%, delayed to August 1, 2025). These tariffs affect a broad range of products, including vehicles, machinery, and food imports. The Stoxx Europe 600 index dropped 1.7% in response to the initial tariff announcement, indicating market concerns about reduced competitiveness.en.wikipedia.orgnytimes.comen.wikipedia.org
  • Price Increases: European companies, particularly in the automotive sector (e.g., Germany’s luxury car manufacturers), are likely to pass on tariff costs to U.S. consumers. A 30% tariff could add significant costs to vehicles, with estimates suggesting luxury car prices could rise by $15,000 or more. Food imports, such as olive oil, are also expected to see price hikes as European exporters face higher duties. Businesses may delay price increases by relying on pre-tariff stockpiles, but this is a short-term strategy.nytimes.comfinance.yahoo.comnytimes.com
  • Negotiation and Retaliation: The EU is actively negotiating with the U.S. to avoid steeper tariffs, with talks involving Chinese and Japanese officials to explore trade diversion mechanisms. However, the EU has signaled potential retaliatory tariffs on U.S. goods (e.g., bourbon, motorcycles) if negotiations fail, which could further drive up costs globally.en.wikipedia.orgcnbc.compbs.org

Broader Considerations​

  • Consumer Impact: Across all regions, tariffs are likely to increase U.S. consumer prices. The Tax Foundation estimates that tariffs on Chinese, Canadian, and Mexican goods alone could add $1,072-$1,300 per U.S. household annually, with similar effects expected from Japanese and European tariffs. Sectors like automotive, electronics, and food are particularly vulnerable.pbs.orgnpr.org
  • Business Strategies: Companies may mitigate costs by absorbing some losses, relocating production (e.g., to the U.S. or other countries like Vietnam), or diversifying supply chains. However, these strategies take time and may not fully offset tariff impacts, leading to higher prices in the short-to-medium term.claconnect.comnpr.org
  • Economic Risks: J.P. Morgan estimates a 60% chance of a global recession by year-end 2025 due to these tariffs, as they disrupt supply chains and reduce global trade. This could force businesses to raise prices further to cover losses from reduced demand.reuters.com

Conclusion​

Japanese, Chinese, and European businesses are likely to raise prices in response to Trump’s tariffs, as the high rates (15-145%) make it unsustainable to absorb costs fully. While some firms may delay price hikes through stockpiling or production shifts, the consensus among economists is that consumers will bear much of the cost, particularly in sectors like automotive, electronics, and food. Ongoing negotiations and potential retaliatory tariffs could further complicate the situation, but price increases appear inevitable in the near term.
Click to expand...
You need to reprogram your GROK. The problem with AI is that it's only as smart as the information fed into it. The tariff on Jap cars is going down so why is your GROK saying that:
  • The 15% tariff on Japanese cars could add substantial costs to vehicles sold in the U.S.
Click to expand...

Since tariffs are paid by the importer, why on earth would the exporter raise prices to compensate for it? Makes no sense
 
#5,880
#5,880
MontyPython said:
Japan, China and Europe are just gonna eat the new tax? History begs to differ. Your Trump mouthpiece there is an ass clown.

Per Grok:

Are japanese, chinese and european businesses going to raise prices due to president trump's new tariffs on these countries?

Yes, Japanese, Chinese, and European businesses are likely to raise prices due to President Trump’s new tariffs, though the extent and timing depend on various factors. Here’s a breakdown based on available information:

Japanese Businesses​

  • Impact of Tariffs: Trump’s tariffs, including a 24% reciprocal tariff on Japanese goods and a 25% tariff on automobiles and parts (reduced to 15% for Japanese cars after negotiations), significantly affect Japan’s export-heavy economy, particularly its automotive sector, which accounts for 20% of its exports to the U.S.. For example, Toyota projected a $1.3 billion profit hit in April-May 2025 due to these tariffs, and companies like Honda and Nissan are facing similar pressures, with Nissan considering plant closures in Japan.nytimes.comnytimes.comnytimes.com
  • Price Increases: The 15% tariff on Japanese cars could add substantial costs to vehicles sold in the U.S. For instance, a luxury car could see a price hike of $15,000 or more. Japanese firms may pass these costs to U.S. consumers to maintain profitability, especially since the automotive supply chain is deeply integrated and reliant on U.S. markets. Additionally, Japan’s Nikkei 225 fell 7.8% on April 7, 2025, reflecting market concerns about higher costs and reduced competitiveness.nytimes.comen.wikipedia.org
  • Mitigation Efforts: Japan has approved a $6.3 billion spending package to support businesses and households affected by tariffs, which may temporarily absorb some costs. However, analysts estimate a potential 0.8% reduction in Japan’s GDP, suggesting that price increases are likely as companies cannot fully absorb these costs long-term.nytimes.comen.wikipedia.org

Chinese Businesses​

  • Impact of Tariffs: Trump’s tariffs on Chinese goods have escalated to 145% (up from 104%), targeting a wide range of products like electronics, footwear, and appliances, which make up 46.4% of U.S. imports from China. These tariffs, combined with the elimination of the de minimis exemption for Chinese goods, severely impact e-commerce giants like Temu and Shein, which rely on low-cost shipments. Nomura Holdings estimates that this could slow Chinese export growth by 1.3 percentage points and GDP growth by 0.2 points.aljazeera.comcnbc.comen.wikipedia.org
  • Price Increases: Studies from Trump’s first term (2018-2019) showed a nearly one-for-one pass-through of tariff costs to U.S. import prices, suggesting Chinese exporters are unlikely to absorb the full cost of the 145% tariffs. Companies like Apple, heavily reliant on Chinese manufacturing, may face higher production costs, potentially increasing prices for iPhones and other electronics by up to 20% unless they shift production elsewhere (e.g., to India or Vietnam). Chinese firms are also stockpiling goods in U.S. warehouses to delay price hikes, but once these reserves deplete, consumer prices are expected to rise.jpmorgan.comnpr.orgaljazeera.com
  • Retaliation and Adaptation: China has retaliated with 125% tariffs on U.S. goods, which could further complicate global supply chains and increase costs. Some Chinese companies are adapting by expanding U.S.-based distribution facilities, but this is unlikely to fully offset the tariff impact.en.wikipedia.orgen.wikipedia.org

European Businesses​

  • Impact of Tariffs: The European Union faces a 30% tariff on goods exported to the U.S. (initially proposed at 50%, delayed to August 1, 2025). These tariffs affect a broad range of products, including vehicles, machinery, and food imports. The Stoxx Europe 600 index dropped 1.7% in response to the initial tariff announcement, indicating market concerns about reduced competitiveness.en.wikipedia.orgnytimes.comen.wikipedia.org
  • Price Increases: European companies, particularly in the automotive sector (e.g., Germany’s luxury car manufacturers), are likely to pass on tariff costs to U.S. consumers. A 30% tariff could add significant costs to vehicles, with estimates suggesting luxury car prices could rise by $15,000 or more. Food imports, such as olive oil, are also expected to see price hikes as European exporters face higher duties. Businesses may delay price increases by relying on pre-tariff stockpiles, but this is a short-term strategy.nytimes.comfinance.yahoo.comnytimes.com
  • Negotiation and Retaliation: The EU is actively negotiating with the U.S. to avoid steeper tariffs, with talks involving Chinese and Japanese officials to explore trade diversion mechanisms. However, the EU has signaled potential retaliatory tariffs on U.S. goods (e.g., bourbon, motorcycles) if negotiations fail, which could further drive up costs globally.en.wikipedia.orgcnbc.compbs.org

Broader Considerations​

  • Consumer Impact: Across all regions, tariffs are likely to increase U.S. consumer prices. The Tax Foundation estimates that tariffs on Chinese, Canadian, and Mexican goods alone could add $1,072-$1,300 per U.S. household annually, with similar effects expected from Japanese and European tariffs. Sectors like automotive, electronics, and food are particularly vulnerable.pbs.orgnpr.org
  • Business Strategies: Companies may mitigate costs by absorbing some losses, relocating production (e.g., to the U.S. or other countries like Vietnam), or diversifying supply chains. However, these strategies take time and may not fully offset tariff impacts, leading to higher prices in the short-to-medium term.claconnect.comnpr.org
  • Economic Risks: J.P. Morgan estimates a 60% chance of a global recession by year-end 2025 due to these tariffs, as they disrupt supply chains and reduce global trade. This could force businesses to raise prices further to cover losses from reduced demand.reuters.com

Conclusion​

Japanese, Chinese, and European businesses are likely to raise prices in response to Trump’s tariffs, as the high rates (15-145%) make it unsustainable to absorb costs fully. While some firms may delay price hikes through stockpiling or production shifts, the consensus among economists is that consumers will bear much of the cost, particularly in sectors like automotive, electronics, and food. Ongoing negotiations and potential retaliatory tariffs could further complicate the situation, but price increases appear inevitable in the near term.
Click to expand...
japan will take smaller profit margins and not raise prices due to tarriffs for Japan has to have US market available to them?

from GROK:
Japanese firms, particularly automakers, have indeed shown a tendency to absorb U.S. tariffs to maintain market access, prioritizing sales volume over profit margins. Recent data indicates that Japan’s economy relies heavily on the U.S., its largest export market, with over 20% of its exports—especially automobiles—destined for the U.S.. In response to U.S. tariffs, which rose to a 15% reciprocal rate on Japanese goods and autos under a July 2025 trade deal (down from a threatened 25%), Japanese carmakers like Toyota and Honda have largely absorbed these costs. For instance, export values for cars dropped 25.3% year-on-year in June 2025, despite a 4.6% increase in export volume, suggesting significant price cuts to offset tariffs. A GMO Research survey found that 35.9% of large Japanese firms with U.S. operations are maintaining current strategies or increasing prices minimally, while smaller firms (70% of those with 5-50 billion yen in revenue) are more likely to absorb costs to stay competitive.

This strategy stems from necessity: losing U.S. market access could tip Japan’s export-dependent economy into recession, with economists warning that higher tariffs could halve growth. However, absorbing tariffs squeezes profit margins—Toyota projected a $1.3 billion profit hit for April-May 2025 alone—and intensifying competition from China, particularly in electric vehicles, limits pricing power. While Japan’s $6.3 billion stimulus package aims to cushion the blow for businesses and households, the trade-off is clear: smaller margins are preferable to losing the U.S. market. On the flip side, this approach risks long-term profitability, especially if tariffs persist or rise, and some argue Japan should push harder for tariff exemptions or diversify export markets to reduce reliance on the U.S..
 
#5,881
#5,881
jmacvols1 said:
japan will take smaller profit margins and not raise prices due to tarriffs for Japan has to have US market available to them?

from GROK:
Japanese firms, particularly automakers, have indeed shown a tendency to absorb U.S. tariffs to maintain market access, prioritizing sales volume over profit margins. Recent data indicates that Japan’s economy relies heavily on the U.S., its largest export market, with over 20% of its exports—especially automobiles—destined for the U.S.. In response to U.S. tariffs, which rose to a 15% reciprocal rate on Japanese goods and autos under a July 2025 trade deal (down from a threatened 25%), Japanese carmakers like Toyota and Honda have largely absorbed these costs. For instance, export values for cars dropped 25.3% year-on-year in June 2025, despite a 4.6% increase in export volume, suggesting significant price cuts to offset tariffs. A GMO Research survey found that 35.9% of large Japanese firms with U.S. operations are maintaining current strategies or increasing prices minimally, while smaller firms (70% of those with 5-50 billion yen in revenue) are more likely to absorb costs to stay competitive.

This strategy stems from necessity: losing U.S. market access could tip Japan’s export-dependent economy into recession, with economists warning that higher tariffs could halve growth. However, absorbing tariffs squeezes profit margins—Toyota projected a $1.3 billion profit hit for April-May 2025 alone—and intensifying competition from China, particularly in electric vehicles, limits pricing power. While Japan’s $6.3 billion stimulus package aims to cushion the blow for businesses and households, the trade-off is clear: smaller margins are preferable to losing the U.S. market. On the flip side, this approach risks long-term profitability, especially if tariffs persist or rise, and some argue Japan should push harder for tariff exemptions or diversify export markets to reduce reliance on the U.S..
Click to expand...

I do love it that you think the US can just cut off a country from being able to export goods to the US, and that US companies and consumers will just be like "ok".

For such supposedly ardent advocates of 'capitalism' you seem to have a very poor understanding of market forces.
 
#5,882
#5,882
Sea Ray said:
He's assuming that the exporter is paying that 15% tariff rather than the importer and I'm not certain that he's accurate with that
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Foreign companies are willing to eat the tarriff than raise prices. Their existence depends on access to US markets as Trump uses that as leverage. Some companies will increase prices 15% to offset tarriffs, some may increase prices only 10% or 5% to offset some of the tarriff. CPI is not showing major price increases nor is there skyhigh inflation as the left is hoping for.

grok:
The latest Consumer Price Index (CPI) data for June 2025, as reported by the U.S. Bureau of Labor Statistics, indicates that the CPI for All Urban Consumers (CPI-U) rose by 0.3% on a seasonally adjusted basis, with the annual inflation rate reaching 2.7%, up from 2.4% in May. Core CPI, which excludes volatile food and energy prices, increased by 0.2% monthly and 2.9% annually. While these figures show a slight uptick in inflation, the impact of tariffs on price increases appears mixed and not yet significant across the board.
 
#5,883
#5,883
BeardedVol said:
I do love it that you think the US can just cut off a country from being able to export goods to the US, and that US companies and consumers will just be like "ok".

For such supposedly ardent advocates of 'capitalism' you seem to have a very poor understanding of market forces.
Click to expand...
Trump did not cut off Japan, EU etc from exporting to the US, Trump is just fixing trade imbalances.
 
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#5,885
#5,885
NorthDallas40 said:
Trump has apparently put out in the last 48 hours he wants a global 15-20% tariff level. I’ve seen enough to form an opinion he’s a moron on international trade.
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i will judge his approach by the final results. Trump is not going to disclose what he is trying to accomplish. He uses media statements as a form of manipulation.
 
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#5,887
#5,887
volbeast33 said:
i will judge his approach by the final results. Trump is not going to disclose what he is trying to accomplish. He uses media statements as a form of manipulation.
Click to expand...
I’ve seen enough to form the opinion he and his “trade gurus” are bloviating morons on international trade. Granted I was 90% of the way there the first week of April when they gaslighted the country with that idiotic piece on the us trade representative webpage trying to sell the stupidity with that idiotic misused formula. Boy did that back fire.

Bessett is the disappointment. He’s smart enough to know better but he had to do what his boss wants. Lutnick and Navarro are barely functional morons. Hassett is on a months long job interview for the next Fed chair.
 
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#5,888
#5,888
Sea Ray said:
You need to reprogram your GROK. The problem with AI is that it's only as smart as the information fed into it. The tariff on Jap cars is going down so why is your GROK saying that:


Since tariffs are paid by the importer, why on earth would the exporter raise prices to compensate for it? Makes no sense
Click to expand...

No. So a $100K car will now cost $115K all other factors equal. That is the price increase that will likely happen - assuming that the car manufacturer wants to maintain its profit margins. New costs (taxes) imposed are just passed along to the end consumer.
 
#5,889
#5,889
jmacvols1 said:
japan will take smaller profit margins and not raise prices due to tarriffs for Japan has to have US market available to them?

from GROK:
Japanese firms, particularly automakers, have indeed shown a tendency to absorb U.S. tariffs to maintain market access, prioritizing sales volume over profit margins. Recent data indicates that Japan’s economy relies heavily on the U.S., its largest export market, with over 20% of its exports—especially automobiles—destined for the U.S.. In response to U.S. tariffs, which rose to a 15% reciprocal rate on Japanese goods and autos under a July 2025 trade deal (down from a threatened 25%), Japanese carmakers like Toyota and Honda have largely absorbed these costs. For instance, export values for cars dropped 25.3% year-on-year in June 2025, despite a 4.6% increase in export volume, suggesting significant price cuts to offset tariffs. A GMO Research survey found that 35.9% of large Japanese firms with U.S. operations are maintaining current strategies or increasing prices minimally, while smaller firms (70% of those with 5-50 billion yen in revenue) are more likely to absorb costs to stay competitive.

This strategy stems from necessity: losing U.S. market access could tip Japan’s export-dependent economy into recession, with economists warning that higher tariffs could halve growth. However, absorbing tariffs squeezes profit margins—Toyota projected a $1.3 billion profit hit for April-May 2025 alone—and intensifying competition from China, particularly in electric vehicles, limits pricing power. While Japan’s $6.3 billion stimulus package aims to cushion the blow for businesses and households, the trade-off is clear: smaller margins are preferable to losing the U.S. market. On the flip side, this approach risks long-term profitability, especially if tariffs persist or rise, and some argue Japan should push harder for tariff exemptions or diversify export markets to reduce reliance on the U.S..
Click to expand...
I mean it could be that the deep pocket MNCs like Toyota eat a portion of the tariff in the short run with an eye on 2028 and such tariffs getting chucked out the window.

However, an important note ignored in this equation: Domestic auto firms will be incentivized to raise their prices since their foreign competition will be pressured to do so, as well.

The big loser in this whole equation: car buyers.
 
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#5,890
#5,890
CobbVol said:
Good news. Trade deals are more than just a % for each country.

From the article:

Australia will lift restrictions on the import of beef from the US, a trade barrier which had angered the Trump administration.

American beef has effectively been banned from the country - which has some of the strictest biosecurity laws in the world - since 2003 after an outbreak of mad cow disease.

www.bbc.com

Australia to lift import ban on US beef after Trump tariffs tiff

The Australian government says it has not compromised on its strict biosecurity laws.
www.bbc.com www.bbc.com
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Given the fact that beef prices are already skyrocketing due to record low herd levels as a result of policies and events over the previous four years, I'm not a huge fan of increasing demand for US beef right now.
 
#5,894
#5,894
The tariffs are a tax. Paid by U.S. consumers. It may be directed at products from specific points of origin, and it may be hoped that it incentivizes U.S. consumers to buy from other points of origin, including U.S. made. But even then, by definition, it results in increased prices paid by us, not them.
 
#5,895
#5,895
MontyPython said:
No. So a $100K car will now cost $115K all other factors equal. That is the price increase that will likely happen - assuming that the car manufacturer wants to maintain its profit margins. New costs (taxes) imposed are just passed along to the end consumer.
Click to expand...
But that 25% goes to your beloved government. I would think you leftists world be ecstatic
 
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#5,896
#5,896
lawgator1 said:
The tariffs are a tax. Paid by U.S. consumers. It may be directed at products from specific points of origin, and it may be hoped that it incentivizes U.S. consumers to buy from other points of origin, including U.S. made. But even then, by definition, it results in increased prices paid by us, not them.
Click to expand...
Now we can get around to killing the income tax.
 
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#5,897
#5,897
lawgator1 said:
The tariffs are a tax. Paid by U.S. consumers. It may be directed at products from specific points of origin, and it may be hoped that it incentivizes U.S. consumers to buy from other points of origin, including U.S. made. But even then, by definition, it results in increased prices paid by us, not them.
Click to expand...

So now you're against taxes?
 
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#5,898
#5,898
lawgator1 said:
The tariffs are a tax. Paid by U.S. consumers. It may be directed at products from specific points of origin, and it may be hoped that it incentivizes U.S. consumers to buy from other points of origin, including U.S. made. But even then, by definition, it results in increased prices paid by us, not them.
Click to expand...


It’s not that black and white.

Some tariffs will be ate by the importer more than others due to having to stay competitive. There is a breaking point where the importer has to raise cost due to margins or the exporter had to lower the cost which effectively reduces the importer tariff side.

Anyone who makes this sound simple is not being honest. Every trade, every manufacture, every important and export will have to handle this differently. It’s not a one size fits all situation.
 
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