Everyone does this. If someone was trying to sell their old car and they saw news of upcoming tariffs on cars, they’d expect to sell their car at a higher price even though the tariffed cars haven’t arrived yet.

A second factor is that volatility and unpredictable policy raises risk, which increases prices. There will be a lot of price increases in excess of base tariff rates simply because everything is changing rapidly on the whims of this administration and businesses need more buffer for unexpected shocks.

If you’re a company who set up manufacturing in China, placed orders 4 months ago, and you’re watching the tariff rate change from 65% to 125% or more in the span of days with threats of more, you have to increase your prices a lot to have more buffer. Those parts you ordered now have an unpredictable price tags attached when they arrive at the port. It’s completely out of control.

In Japan the US Military buys fuel and sets the price at its on base stations according to what they purchase it for. On several occasions when I lived there this resulted in the Base CO having to address everyone and tell them if they don’t buy the fuel (that is now significantly cheaper outside the gate) then the Exchange cannot buy new fuel, and they may have to shut the station down permanently.

It never came to that; everyone just went and paid the higher price for a tank and the issue was resolved.

My point is that trying to price a commodity that moves prices like that by a lagging indicator is a great way to capture business on one side and a great way to go bankrupt on the other.

If I bought a gallon of water for a dollar and then there was a terrible water shortage I would not let it go for two dollars

Stores often sell common staples like bananas, generic milk, and other basics at close to cost. They’re the things that get people in the door. They make their profit on things like cereal, deli meats, packaged goods, and other non-staple items that people also buy once they’re inside.

It’s similar to how many gas stations compete on cost of gas to get people there, but hope that you’ll stop inside and get a $6 drink or some $5 packaged snacks.

Then you have to consider all of the other things that go into a store are also tariffed. The parts for the trucks that transport the bananas have tariffs. Many of their cleaning supplies. Parts for the checkout registers. The light bulbs they have to replace. Many of those tariffs could be well over 100%. They have to make up that price in the cost of bananas and everything else.

In the current circumstances, though, companies do not have a choice to lower prices. The basic cost of taking an item into inventory from these suppliers has risen significantly, in most cases well above 2024 margins.

The net effect is that, despite the market's best effort to correct prices to within an affordable range, costs may rise considerably and availability may still fall regardless. Under severe shock to the system, the usual maxims that account for nominal shifts in day to day trading no longer apply.

True, but human psychology is a huge confounding factor. One area where this is evident is gas prices that "go up like a rocket, and come down like a feather" in response to crude oil prices. Simple supply and demand does not explain this.

"The price went up 10%, that must be the 10% tariffs" is something consumers will inherently understand… but it's not the case. The 10% is not on the on-the-shelf price; it's on the wholesale price the importer's charging. The $20 shirt at Old Navy is probably $4 (with $0.40 in tariffs added) for tariff purposes… but they'll add $2 to it anyways, because consumers will go "oh ok". There's a massive information asymmetry here.

The unpredictable nature of these specific tariffs is fairly unique, too. The rates change randomly, with zero warning, and how they're set isn't sensical. With ships across the ocean taking weeks, that's gonna chill the supply side as well.

Normally I'd make a joke about econ 101 but I'm pretty sure you'd lose points for answering with this in an econ 101 class

Most of the developed world pre-calculates sales tax.

If McDonalds charges you $10.32 in Australia, the government gets $0.84(8181812...) of it. Rounding isn't an issue because you don't write a check for each individual $0.84(8181812...), you pay them the aggregate amount on a regular basis.

That sure is a HUGE rounding error! 9¢ savings by doubling up is nothing to sneeze at!

> they will get you for those pennies

Was your restaurant ever audited? That is a lot of pennies!

Sales tax is not uniform for all products depending on your state. My home state for example does not charge sales tax on food items and clothing. Some other special categories also have different sales tax depending on what they are - e.g. vice taxes for some items.

They'll just raise the price of the domestic good to $13 and we will all pay $8 extra on a thing that used to cost $5.

If the price displayed is still $5 but tariffs added at the end, the domestic seller's $13 sticker price will not look attractive to buyers.

The regional supermarket chain in new england that is owned by kroger ALREADY localizes their weekly sales flyer TO THE STORE despite every store in the state having the exact same tax rates.

They STILL don't include the tax in the price listed because fuck you, this is america

Rates that change from day to day is a serious problem when shipping containers on a boat takes weeks or months.

Mainly with the concept of letting a ginormous multinational megacorp with more money and resources than 99.9% of the rest of America combined influence our political process is literally how we got here.

The CEO of Amazon is welcome to lobby as himself but letting an extremely already privileged legal fiction (an LLC) have more power over our society is just dumb.

    const trump_tariff = priceIncrease > 1.0

Isn't this the horn everyone keeps trumpeting? It doesn't seem complicated.

If you're buying good copper cookware the manufacturer "brand" matters, they build a reputation for having quality products, ideally continue to make those quality products at a fair price, etc. and life is good.

But then there are brands and unfortunately when we use the term brand we wind up lumping together "high quality brands" with "cheap, useless dog shit products" and it can be difficult to differentiate. At least for me and my limited vocabulary.

You start with this, but then the rest of your comment is totally unrelated. Could you elaborate?

It might be like shipping and handling: $20. The shipping is probably $5, the handling is $15. The handling is just a fee they charge to sell it to you. They want you to think it's shipping that's why they put "shipping" first. Uber Eats calls it "taxes and other fees," which are mostly fees, but they want you to think it's taxes, that's why they put "taxes" first.

Many business are scummy like that, we've just gotten used to it.

The point being, they are signaling a price hike and they are trying to attribute it to tariffs, which maybe or may not be true down to the penny. If they were exact in what the tariff was, people can easily calculate their cost, which Amazon doesn't want. I'm sure they will sneak in some extra profit in there at some point using similar tactics as described above.

Of course the republicans are just as guilty as democrats in letting their people keep running as they get old in office.

I have a personal policy of never voting for someone who has held the office more than 1 time. If more people would do this we would solve a bunch of problems. (2 terms is a good number if you like the person since they have some experience in the second term). This also means I oppose too small districts in local issues - if there are not several people interested in running for the office than either it shouldn't be elected (why do I elect my country treasurer - it shouldn't have any power), or the district is too small.

2. Democrats believe that "anybody who's not the other guy" is a winning strategy despite it failing over and over. They think that a candidate that people are excited to vote for is not a necessity and have been proven wrong over and over and over again. They got beat with this strategy in 2000, 2004, 2016 (and now 2024). It barely worked in 2020.

If the plan in 2028 is somebody who's a hold-your-nose and say "Well I'll vote for anyone who isn't republican" they will get absolutely smoked again.

You said: "This will help me select products from nations that have a healthier and more sustainable commercial relationship with the US."

It's not going to help you with that

On a less sarcastic note, pretty much zero mainstream economists believe that tariffs will bring back manufacturing to the US. There are economists who think the US should manufacture more. They talk about taxing consumption more and savings/investment less. When you cite economists to tariff-enthusiasts, they usually reply with "economics is a scam!" or some such nonsense. That's only a breath away from an equally dumb Marxist line: "economists are just servants of The Capital". Bleh.

And I love Amazon. They're a fantastic company and have been since day 1. I'm a grown-up. If I want to buy cheap Chinese goods, I should be able to. And if that hurts Americans, that sucks for them, but I shouldn't have to pay a tax because some US company can't compete with Chinese companies. And if I lose my job because someone in China does it better/cheaper, I won't whine about it. I'll find something else to do.