The Tariff Talk

[JTH]

I have a hard time caring about Tariffs when any one of them can be reversed/altered/ignored, at a moments notice. Don't get me wrong, it's an extreme annoyance to wake up to a new embarrassing headline every day. But hey what can I do? Gotta flow with the go and roll in the dough....

 

[James48843]

Maybe, but the shareholders don't seem to believe it for some reason.

https://www.wsj.com/business/autos/auto-industry-trump-tariff-impact-955ca0bf

Automakers take $12 billion hit from tariffs so far. Thats before the real big tariffs kicked in. Now it’s going to be double, or more.

From the article:
“Toyota forecast tariffs will create a $9.5 billion burden through its fiscal year that ends next March, leading to an anticipated 44% decline in net profit.

For the world’s 10 largest automakers, not including those in China, net profit is currently forecast to fall by roughly a quarter this calendar year to its lowest level since 2020, when the pandemic led to cash-draining factory shutdowns.”

Having a quarter of an entire industry profits erased is going to hurt the market.

 

[tsptalk]

Interesting. GM is number three on that list and the top USA company. But again, shareholders don't seem worried yet. This inverted H&S looks surprisingly good.

 

[nasa1974]

Maybe the shareholders feel the industry can weather the storm. Or they see the wavering back and forth from the administration as something positive. Bottom line is the workforce and consumers will feel the pain from the tariffs.

 

[Boghie]

I order K-Cup pods from 'Black Rifle Coffee' and the price is increasing by 6%

Oh, the humanity!!!



I kinda remember that coffee being something like $21 back before 2021. It is now going to be $34.

So, the price has increased by $15. The tariffs account for $2 of that.

I don't like tariffs, but they really aren't the problem.

 

[James48843]

I order K-Cup pods from 'Black Rifle Coffee' and the price is increasing by 6%

Oh, the humanity!!!

View attachment 69891

I kinda remember that coffee being something like $21 back before 2021. It is now going to be $34.

So, the price has increased by $15. The tariffs account for $2 of that.

I don't like tariffs, but they really aren't the problem.

Is coffee even on the list that Uncle Sam uses to calculate inflation?

New data just came out.
Inflation is UP- CORE CPI now at 3.1% , thanks to tariffs.

Data and the story here:

https://www.yahoo.com/finance/news/inflation-rises-by-most-in-six-months-stoking-tariff-driven-price-concerns-123415069.html

 

[Boghie]

 

[TommyIV]

Why Haven’t Tariffs Boosted Inflation? This Theory Is Gaining Traction​

If you entertain the idea in this article, that tariffs have yet to unfold their full effect on inflation, then you may also put yourself at odds the current price of the stock market.

"Barclays research suggests that inflation hasn’t increased that much partly because the U.S. hasn’t collected tariffs on many goods—for now. In June, just 48% of U.S. imports were actually subject to tariffs, thanks to myriad exemptions, according to the bank’s analysis of U.S. Census Bureau data."

Stock prices were inflated Tuesday after the latest Consumer Price Index was low enough for the market to price in a 92% chance of a 25 bp Fed Fund rate cut in the September Federal Open Market Committee (FOMC) meeting.

S&P 500 Weekly Chart (last five days)​

The market is also projecting a 42% chance of another 50-bps cut by the December FOMC meeting.

But if the effect of tariffs hasn't reached its potential, the latest CPI may be setting investors up for disappointment. If the FOMC sees inflation nudging the other way in next wave of data, then they will divert back to cautiously waiting.

The market may have to correct its rate cut expectations in the next month or two, I'd rather have some cash available when it does. I hold stocks, a majority SPY ETFs, but I've also have a healthy amount of cash in my portfolio waiting for the next discount to buy.


"Ultimately, Barclays expects weighted-average tariffs to end up at around 15%, up from a current 10% and 2.5% last year. Other economists calculate even higher rates. That could mean much of the likely tariff hit is still in the future."

 

[James48843]

I really think August will be the start of tariffs showing up in prices. By October it will be very apparent. I’m seeing slowing in several sectors now, because of tariffs.

John Deere laying off workers in three plants, due to 26% decrease in sales. That’s serious. https://www.thegazette.com/business...e-than-200-employees-across-three-factories/#

More in other industries. It’s coming.

 

[weatherweenie]

I really think August will be the start of tariffs showing up in prices. By October it will be very apparent. I’m seeing slowing in several sectors now, because of tariffs.

John Deere laying off workers in three plants, due to 26% decrease in sales. That’s serious. https://www.thegazette.com/business...e-than-200-employees-across-three-factories/#

More in other industries. It’s coming.

But but, the billions of dollars the tarrifs are supposed to be bringing in.

 

[JTH]

Ok I read the link, but saw no mention of Tariffs as the the cause of the layoffs for John Deere.

"Previous reporting indicates Deere & Co. began laying off employees in October 2023, when it laid off 225 people at the Harvester Works in East Moline."

Also I attended a Tractor Pull In Germany last year. it was sponsored by John Deere, and they brought out a fk-load of gear. I've never seen so many German Rednecks in one place, and judging by the number of children, they are prolific breeders. Also somewhat strange many were dressed like they were attending a Ramstein Concert....

 

[tsptalk]

I said this somewhere recently, a forum post, commentary? Can't remember. But I believe I also wondered why others weren't saying it.

https://twitter.com/x/status/1958912470254342448

Major Powell shift in thinking: “a reasonable base case is that the impact of tariffs will be relatively short-lived - a one-time shift the price level.”

@SaraEisen

 

[Boghie]

Too funny... Barclay's postulates that the affect of tariffs is functionally invisible (rounding error) because only half of them are in effect. Too funny.

I won't discount the inflationary effect of tariffs. They are inflationary. However, there are a lot of variables that factor into inflation. Here is one: Fuel Prices. What has happened to the cost of fuel over the past 6 months - or, even the past year. We can assertain that the cost of fuel will remain stable or drop as a result of current policy, especially in the good ole' USofA. That is DEFLATIONARY. The cost of food is declining. A BUNCH of stuff is declining in cost. Will that offset the tariff factor leading to inflation?

Too many balls in the air and too soon to make a call - but, my money is actually on deflation.

Is deflation good?

 

[TommyIV]

I said this somewhere recently, a forum post, commentary? Can't remember. But I believe I also wondered why others weren't saying it.

https://twitter.com/x/status/1958912470254342448

Some might say the effect of tariffs on inflation is… transitory.

I get the argument, but framing it as a “one-time shift” feels too simplified. In reality, the impact doesn’t just hit once and vanish. As companies adjust, they’re likely to gradually pass their higher costs onto consumers, which means the data could reflect those pressures in waves rather than in a single step.

 

[Boghie]

Some might say the effect of tariffs on inflation is… transitory.

Nice, very nice. I see what you did there

 

[nasa1974]

The problem with tariffs is that large companies can absorb the cost or trickle down some to its customers. Small businesses will be hanging out the closed signs.

 

[nasa1974]

Too funny... Barclay's postulates that the affect of tariffs is functionally invisible (rounding error) because only half of them are in effect. Too funny.

I won't discount the inflationary effect of tariffs. They are inflationary. However, there are a lot of variables that factor into inflation. Here is one: Fuel Prices. What has happened to the cost of fuel over the past 6 months - or, even the past year. We can assertain that the cost of fuel will remain stable or drop as a result of current policy, especially in the good ole' USofA. That is DEFLATIONARY. The cost of food is declining. A BUNCH of stuff is declining in cost. Will that offset the tariff factor leading to inflation?

Too many balls in the air and too soon to make a call - but, my money is actually on deflation.

Is deflation good?

I'm going to disagree on the stable fuel costs. I've watched the Speedway by me increase gas prices in just a few hours by up to $0.50. Today was the worst I can ever remember. Gas this morning @ 7:30am was $2.72/gal. I was on my way to ride some coasters at Cedar Point. I drove by Speedway @ 4:00pm and gas was $3.49/gal. That's a $0.77 increase. Thats total BS.

 

[evilanne]

I'm going to disagree on the stable fuel costs. I've watched the Speedway by me increase gas prices in just a few hours by up to $0.50. Today was the worst I can ever remember. Gas this morning @ 7:30am was $2.72/gal. I was on my way to ride some coasters at Cedar Point. I drove by Speedway @ 4:00pm and gas was $3.49/gal. That's a $0.77 increase. Thats total BS.

Where do you live? Are you sure the higher price is for Regular and not Premium or Diesel? Prices are pretty stable where I'm at, I usually fill at Sam's or Costco. It was higher in Wyoming end of July (during Cheyenne Frontier Days) but now it is about 10 cents less. Maybe coming up on Labor Day prices are increase due to higher demand? It's too early for Winter mix but that should actually lower the cost.

 

[JTH]

The problem with tariffs is that large companies can absorb the cost or trickle down some to its customers. Small businesses will be hanging out the closed signs.

Might be the biggest issue I have with Tariffs is how these policies serve to squeeze out smaller companies who can't compete at scale. Drive through every major city, stop at every major intersection, and we'll see the same 10-20 stores like a cookie cutter template. In the end we'll create less diversity and resiliency in the economy, less choices which sounds strangely to me more like communist-style production.

 

[Boghie]

Unleaded Regular (Raleigh, NC):

Aug 2024	$3.34/gal
Aug 2025	$2.95/gal
Deflation:	11.7%

No impact, no idea where that Speedway jacked prices by $0.77. Must have been something local.

That $2.95/gal is higher than I have seen it for a while. It was $2.85/gal in July. That is why the FED doesn't include fuel in it's preferred inflation gauge - but a 40 cent decline YoY is pretty good.