I just bought a microwave to replace a decades old one. It is a little more complicated than the old one but cost less than half the old one cost. It will take a little while to become comfortable with it.
After Menard’s rebate the cost will be about $98.00. Let’s give Menards’s a small profit after expenses and say it cost them $85.00. Transportation to the Menards’ warehouse from the West coast harbor is $2.00. The shipping from China to the West Coast is probably $3.00. That leaves the cost to Menards at factory about $80.00. Now I don’t know if these numbers are correct but former President Donald Trump has repeatedly stated he would impose a 20% to 50% tariff on Chinese manufactured products. A 20% tariff would have added $16.00 to my price of $98.00. The cost would now be $114.00.
Tariffs cause inflation when they are applied and raise the cost of products to all Americans and do nothing to punish China because no microwave is made here. If a product isn’t made here to compete with an imported one then it doesn’t create competition. It just costs more.
Before income taxes the main source of income for the Federal Government was tariffs. In spite of what politicians say, decreasing or adding the cost to an import is a political decision. Reducing tariffs can reduce inflation or raising tariffs will increase inflation. Trump has talked about inflation – far from being the highest in his lifetime – but on his first day he would raise tariffs on all imports. Economists say that could raise inflation to over twelve percent. Think about the plans Trump spouts before voting for him.
Commentary About the Blue Marble 