White House press secretary Karoline Leavitt calls journalist vile name in rant

It depends on the situation and the amount of tariff.

On some super high margin product, lets say textiles, if you slap a 10% tariff then the business may choose to just keep going with slightly less profitability.

If you do 25% or 50% tariff or the product didn’t have plenty of margins/profitability to work with, then “caving” isn’t really an option as it is making a business entirely unsustainable.

 

Ok, so you agree with the AP reporter that it's a tax on Americans. Glad we got that settled.

On to the next: Renegotiate what?

Then walk me through how this ends with lower prices.

 

I don't listen to everything spewed, but is this meme true? If so I'll leave it up.

 

This is wrong. Literally the week that Trump stepped in office the domestic CRU for steel started increasing because of his threats to impose tariffs. Previously the CRU was flat for quite a while. The index has now gone up every single week he’s been in office. With the imposition of tariffs that will only continue. And why wouldn’t it? If domestic suppliers’ international competitors are suddenly 25% or 50% more expensive why would a domestic supplier leave money on the table? You claim to have run a business so you know you wouldn’t have done that.

 

Yeah, no. It actually allows the domestic producer to increase their prices due to lower competitive intensity. Your analysis assumes that doesn't happen and that domestic producers have a set price that doesn't vary. But, in practice, that is usually what happens.

 

Imagine thinking that lowering competition lowers prices. Can you provide a single empirical example of this theory?

 

@flgator2 Going to explain yourself or just do a drive by? This idea that tariffs are free money or consequence-free is not based in reality.

Studies by people that actually understand economics have been conducted on tariffs. Two recent examples:

In 2002, President George W. Bush raised tariffs on selected steel products in hopes of saving the U.S. steel industry. The move backfired. Longtime trading partners were outraged and threatened to retaliate on American-made goods. More jobs were lost than saved.

“We found there were 10 times as many people in steel-using industries as there were in steel-producing industries,” former U.S. Sen. Lamar Alexander (R-Tenn.) told Politico in a 2018 interview. “They lost more jobs than exist in the steel industry.”

Seven years after the steel tariff was imposed, President Barack Obama slapped a 35 percent levy on Chinese tires. The president would later boast the tariff saved 1,200 U.S. tire jobs and spurred a rise in U.S. tire production after a protracted decline.

But a 2012 review by the Peterson Institute of International Economics found that, as a result of the tariffs, Americans ended up paying more for tires. The cost of Chinese-made tires rose 26 percent and, with less competition from China, domestic tire makers raised prices 3.2 percent.

Altogether, the increase in prices from the tire tariff cost Americans an extra $1.1 billion, which translated to an estimated 3,731 retail jobs lost, the Peterson study determined.
https://news.gsu.edu/2024/10/15/are-tariffs-good-or-bad-for-the-economy/​

 

I’m not even sure what you think happens.

If they “cave” and eat the tariff cost, it would just mean prices stay the same. For awhile. But we know from history and Econ 101 (and basic logic) that doesn’t happen, importer/suppliers can’t take losses forever, and prices will tend to go up under tariff regimes.

If you take Trump at his word (a laughable idea) that it’s about reciprocal tariffs, to get other countries to lower their tariffs. That would theoretically be good for export business! But it’s still not going to lower your consumer prices.