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A company's future can hinge on such questions. I am hoping the answers become more clear in 2019.
Monday, February 25, 2019
Tariffic news
Two Trump tweets from yesterday. Read the bottom one first, then the top one:
We don't talk about tariffs much, but they are a big issue for a lot of companies, including one that's near and dear to me. While I understand why Trump has pursued tariffs in general, the uncertainty concerning their duration and overall effect has caused a lot of businesses to struggle with their short- and medium-term planning. If you currently source a product from China, will a tariff apply? For the whole product, or just certain components? If you source the product elsewhere, can the new companies deliver a product of comparable quality to what you're currently getting, at a price that makes sense? If the tariff goes away, do you re-establish your business relationships? Or could the tariffs come back? And if you keep your products in China and pay the tariff, do you pass along the cost to your customers? In whole, or in part?
A company's future can hinge on such questions. I am hoping the answers become more clear in 2019.
A company's future can hinge on such questions. I am hoping the answers become more clear in 2019.
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I was talking to a farmer the other day who is on the state soybean commission. I figured that he would be a little ornery about the tariffs. Turns out that this whole "trade war" has been working out pretty well for them. Some new markets have been opened up to replace Chinese demand. And if Chinese demand goes back up? Nice.
I appreciate that uncertainty isn't a boon to everyone, but it's not been all bad.
I appreciate that uncertainty isn't a boon to everyone, but it's not been all bad.
It's rarely all good or all bad. Having said that, I can tell you the mood in my office is better today, at least in the C-Suite.
My take on tariffs is really simple. Does our government incur expenses keeping sea lanes open, the border patrolled, the Coast Guard running, and such? If so, please tell me why we shouldn't levy a revenue tariff on imported goods instead of forcing Wal-Mart customers to subsidize their competition for good paying jobs through the income tax and such?
Of course, the counter-argument is simple; politicians see both/and instead of either/or, but if we could get some grownups in DC....yeah, I know, "dream on".
Does our government incur expenses keeping sea lanes open, the border patrolled, the Coast Guard running, and such? If so, please tell me why we shouldn't levy a revenue tariff on imported goods instead of forcing Wal-Mart customers to subsidize their competition for good paying jobs through the income tax and such?
We keep the sea lanes open for more reasons than transportation of cargo. Why shouldn’t we charge tariffs? Didn’t say we shouldn’t, but that’s not the point I was making. The point I am making is it’s better for everyone if government isn’t mercurial. Trump has been more cautious than has been portrayed, but we weren’t sure what the tariffs were even going to be on March 1. At this point, there’s an uneasy status quo, which helps businesses to plan.
Understood, and I've got to admit as well that Trump doesn't really favor what I want, either--uniform tariffs with surcharges for countries that don't honor U.S. intellectual property. That noted, I think the uncertainty is Trump's tactic, and it seems to be working well--at least for those who are not importers, I guess.
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