I Am Worried

[Hobby]

Trump campaigned mainly on illegal immigration and cost of living.  Trump placed tariffs on Canada and Mexico how will this lower our cost of living in the foreseeable future?  Experts are saying tariffs will drive inflation and cost of living through the roof. I am at my financial limit and can't afford to pay more. Like it or not Trump is the president and my president. I want to support him but he is making it difficult to support him if he drives prices up.  Can someone please explain how these tariffs will help lower our cost of living because I have no clue just questions.

[Zep]

If we stop importing (which is the goal of high tariffs) We will have to grow / manufacture / produce more in the USA.   It will take a decade or two, but then we will not need to import cheap items from overseas. The short term pain Trump is selling you will only take 10-20 years.  Until then, there will be shortages, high inflation / prices and only the wealthy will be able to afford many items.   In theory, there will be more jobs in the USA with higher priced items as well.   So no worries, 10-20 years and more wealthy Americans will be making more money!!

Remember,  we are going to be hurting for Trump!!  He's a businessman who has run many businesses into the ground, bankrupt, walking away wealthy.  I'm guessing he's doing the same with our country.

[dogwalker]

I believe you are correct, for the average person.  There is an estimate going around the news that the new tariffs will cost "the average American family" $2,600/year.  I'd like to see the math behind that number and how they define a family.  I doubt the tariffs would cost me that much but I may be able to estimate how much. 

Trump seemed to think, especially in 2017, "China (and now Mexico and Canada) will pay."
That is totally wrong (and today Trump actually admitted that!).  Tariffs are essentially import duties.
That means the importers of goods (in USA) exported by the targeted countries (China, Mexico, Canada) pay the tariff in order for the products they ordered to enter the country imposing the tariffs (USA).
It's just like customs duties travelers sometimes pay if they purchase certain items over a certain value or quantity in a foreign country, then bring those items back home to the US.
In the current situation when companies in China, Mexico and Canada are the exporters and (some) US companies are the importers then US companies that import from those countries will pay the tariff. I suspect most will pass on those costs to their customers especially if they are smaller, specialty stores that are not profitable or barely profitable.  Larger companies like Walmart are profitable and will have numerous ways to even out the impact of tariffs.

How to counteract it? 
1. One could limit buying items subject to tariffs.  Easier said than done for many probably.  Some of our food is imported because due to weather we can't grow enough of some items to meet our demand.  However does one HAVE TO eat avocados and strawberries (from Mexico)?  No.  Tequila may be different....LOL.
2. Prices can be lower if quality is inferior.  Do we want that?  Some of that already happened during the recent inflation where some downgraded from brand name items to something cheaper.
3. Reduce spending on discretionary items to compensate.  Fundamentally I only need food, water, and shelter.  I buy many things I do not truly need (50% of my budget in fact) but that I enjoy to have a certain standard of living.  So my strategy is if any of Trump's policies affect my finances negatively enough, then I can easily reduce my discretionary spending, even if I do not really want to.

However to answer one of your questions:  I don't think tariffs were the strategy to reduce prices since economically that makes no sense as I explained above.  In theory it could IF American made goods cost less but that is part of the problem----they typically don't which.....duh....is why we came to a point where we imported so much from countries where labor and thus costs of production were cheaper.  Trump uses money to threaten other countries.  That's what the tariffs are really about, to basically extort other countries into giving Trump what he wants.  However now, as predicted, those countries increased their tariffs on items exported by the US so it's at a stalemate in terms of economic-based threats except citizens of all those countries mayend up paying more for certain imported items.

One main way to decrease prices of American-made good would be to increase production but from what I see production of many things is already at a maximum.  Also what company wants to increase production to lower prices for potentially similar total revenue but have increased capital and labor costs to do so?  Very few that I know of unless they are super patriots or are forced to by law.  Trump has not clearly indicated how prices will be reduced "on day 1" (and they obviously have not)

Looking at it from a different viewpoint there is a reason the target inflation and interest rate for the Federal Reserve is 2.0%.  When many things are considered that appears to be the optimum rate where growth is allowed (which is required because the Earth's population and demand for products is increasing) but not so much that items we purchase are unaffordable. At a 2% increase every year it would take 35 years for the cost of an item to double.  The hope is wages and investments increase by at least 2% to compensate. The most relevant inflation rates are now about 2.5-2.9% so after a few years of high interest rates inflation has come under control.  However some estimate Trump's tariffs could add 0.5-1.0% inflation to that. Going in the wrong direction.  That by the way is why mortgage rates (which are tied to longer term interest rates) are still about 7.0% for a 30 year loan when they should be lower.  The prospect of higher inflation is keeping long term bond rates high which in turn is what influences mortgage rates.  It's also why the Fed has not dropped shorter term rates by as much or as fast as some hoped.

[bats]

Nothing to worry about, according to Trump. He reiterated tonight that people understand that the masses must endure some "short term" pain for the benefit of billionaires.

[Danno]

I understand buy American, but it will always be way more expensive, people here aren't going work for 50 cents an hr. Some things make no sense to make here.
Canada got rid of all Kentucky whiskey, all their tariffs are to hurt red states.
So what is the plan for all this tariff money?

[HighStepper]

If you are not buying stuff made in Mexico, Canada, China, etc. you will not be paying more. Unfortunately you are probably buying things that are not wholly produced in America.

A key purpose of tariffs is to protect American businesses from foreign competition by making imported goods more expensive to buy. If there's a 10% tariff on imported cars, and a car is worth $30,000, the business would need to pay $3,000 (10% of $30,000) as a tariff to the government. This $3,000 goes straight into the government's revenue. Of course the business will add what they had to pay to the government to the sales price.

QUESTION: What is the Trump administration going to do with that money.

[Blkfyre]

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https://www.pbs.org/newshour/politics/trump-says-americans-could-feel-some-pain-as-his-new-tariffs-begin-to-set-off-a-trade-war

By following through on a campaign pledge, Trump may also have simultaneously broken his promise to voters in last year's election that his administration could quickly reduce inflation. That means the same frustration he is facing from other nations might also spread domestically to consumers and businesses.

"WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!)," Trump said in a social media post. "BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID."

https://apnews.com/article/trump-tariffs-canada-mexico-retaliation-trudeau-sheinbaum-70e067b092a3af72c2eb7ca37d532c91

Canada is the largest export market for 36 states, and Mexico is the largest trading partner of the U.S.

Canada and Mexico ordered the tariffs despite Trump's further threat to increase the duties charged if retaliatory levies are placed on American goods.

"We're certainly not looking to escalate, but we will stand up for Canada," Trudeau said late Saturday.

https://www.thedailybeast.com/canadian-provinces-take-aim-at-us-red-states-by-yanking-american-liquor-from-shelves/

Leaders of two of Canada's largest provinces said they have ordered the removal of U.S. liquor from shelves, in response to President Donald Trump's newly announced tariffs on America's northern neighbor.

Ontario Premier Doug Ford, who leads Canada's most populous province of over 14 million people, said in a tweet Sunday that officials will soon be "removing American products from [provincial liquor store] shelves."

"Every year, [the Liquor Control Board of Ontario] sells nearly $1 billion worth of American, wine, beer, spirits and seltzers," he noted. "Not anymore."

On Saturday, the leader of Canada's third most populous province, British Columbia Premier David Eby, said the local alcohol authority will stop buying liquor from Republican-voting states and immediately pull some bottles from shelves.

Well, at least I am glad they are trying to target the idiots who voted for the idiot causing all of this...

[Hobby]

Removing American booze from shelves punishes Canadians who enjoy it.  I don't think the removal of liquor will force Trump to drop the tariffs.  I don't have issue with tariffs just the timing.  I think Trump would have done better to have waited till the wars have ended and America stops paying for them.  It would be more affordable for us to have waited for the wars to end than to pile more cost on us.

[Blkfyre]

Removing American booze from shelves punishes Canadians who enjoy it.  I don't think the removal of liquor will force Trump to drop the tariffs.  I don't have issue with tariffs just the timing.  I think Trump would have done better to have waited till the wars have ended and America stops paying for them.  It would be more affordable for us to have waited for the wars to end than to pile more cost on us.

Don't think they'll have much issue with it: https://www.cbc.ca/news/canada/tariffs-impact-boycott-1.7448609

"Whatever is labelled Canadian, it's going to be [the] choice for me, even if it's not a preference," Don Profit, who calls the tariffs an "economic attack" by Trump, told CBC News at an Ottawa supermarket.

"While the tariffs are on, I'm going to boycott American products."

Matthias Neill, a dual Canadian-American citizen, told CBC News in Toronto that he's working on a list of American products to avoid.

"I've never felt more anti-American in my life," Neill said.

[Romanticlover]

What I've read is Trump is doing this under the emergency powers act to stem Fentanyl from entering the US, Fentanyl is made in China and imported mainly through Mexico. Punishing everyone because of a few bad people doesn't make sense especially now that those countries are imposing tariffs on US goods. I think the tariffs are also to appease labor in the US who thinks this will bring back jobs to the US which likely won't happen(especially electronics). Fentanyl is mainly being brought into the US by Americans posing as tourists and some customs agents and border patrol agents have been arrested too, we need to clean our own house before blaming other countries.

I don't agree with the tariffs on Canadian and Mexican goods but I agree with Chinese goods though.

[Danno]

he only did 10% on China, Why?

[Hobby]

Mexico is making some concessions sending 10,000 troops to secure our border and Trump agreed to delay the Mexico tariffs 30 days.  Maybe tariffs are a forceful negotioninating tool. Maybe Canada will agree to Trump's terms but I doubt it.

[Romanticlover]

Mexico and Canada blinked, they are going to strengthen their side of the border.

Don't mess with Trump.

[Hobby]

Mexico and Canada blinked, they are going to strengthen their side of the border.

Don't mess with Trump.

They sure did back down.  I am happy they did.  Mexico relies heavily on the United States and will lose big in a trade war.  But then again if their economy crashes there will be more pussy on the street for sale!

[Blkfyre]

Mexico and Canada blinked, they are going to strengthen their side of the border.

Don't mess with Trump.

Define blinked: https://finance.yahoo.com/news/live/live-trump-tariffs-on-canada-mexico-paused-for-a-month-china-duties-set-to-take-effect-tuesday-191201440.html

This says that Trump removed/paused his tariffs. If there are no tariffs that apply to them, then why would they apply tariffs to us as they said they're only doing that because of Trump's tariffs?

If you think that at the end of this month long pause, Trump again applies to tariffs that they won't, you are very naïve.

This isn't blinking. This is a discussion that is ongoing and neither side is applying sanctions during that time.

You know, politics as usual