Patterico's Pontifications

5/19/2019

REUTERS: Walmart says higher China tariffs will increase prices for US shoppers

Filed under: Economics,Government — DRJ @ 8:05 pm



[Headline from DRJ]

Walmart says higher China tariffs will increase prices for U.S. shoppers:

Walmart Chief Financial Officer Brett Biggs said in an interview that higher tariffs will result in increased prices for consumers. He said the company will seek to ease the pain, in part by trying to obtain products from different countries and working with suppliers’ “costs structures to manage higher tariffs.”

But:

“It’s not just tariffs. Transportation costs are up, labor costs are up. It’s an inflationary environment,” Del Monte CEO Greg Longstreet told Reuters on the sidelines of a conference. “A lot of that’s going to have to be passed on. The consumer is going to have to pay more for a lot of critical goods.”

— DRJ

39 Responses to “REUTERS: Walmart says higher China tariffs will increase prices for US shoppers”

  1. By making your money buy less, Trump’s tariffs are a pay cut for everybody.

    #MAGA

    Dave (1bb933)

  2. You mean like dog food with anti freeze in it? What has transportation and labor costs have to do with tariffs? The chi-coms will just manipulate their currencies walmart and their suppliers will buy from countries that tariffs are not on killing chi-coms market share. When you here this will hurt america much more then china you know your hearing from a free trade commie china loving traitor. As one of the marx brothers said the free trade multi-national conservative libertarians will sell us the rope they are hanged with!

    lany (f507dc)

  3. Walmart increase prices and not take cut in profits instead?!?!

    “Tariffic.”

    DCSCA (797bc0)

  4. I did buy a ten-pack of t-shirts from my local Walmart about a month ago when I was shopping for t-shirts and saw the special on the internet. And I did buy some groceries there last July, just to check my options besides Jewel. (I stayed with Jewel.)

    Walmart is critical only to the Walton family.

    nk (dbc370)

  5. Tariffs are essentially a national sales tax on imports paid by consumers. It is a regressive tax that affects mostly the lower and middle income classes.

    Gawain's Ghost (b25cd1)

  6. I wish we’d had them 30 thirty years ago before Walmart put thousands of stores out of business and tens of thousands of store employees out of work, and before the Chinese built up their military so that they can now rattle their sabers at us in the Pacific.

    nk (dbc370)

  7. They also have signs throughout their stores promoting US products.

    Kevin M (21ca15)

  8. I have 3 Walmarts within 5 miles, two are open 24 hours. They employ a lot of people no one else will (young people and retired people) and the workers seem happy to be there.

    I don’t get the hate.

    Kevin M (21ca15)

  9. I don’t get the hate.

    Nor do I.

    Lower prices help people live better. They’re equivalent to a tax-free pay raise.

    Dave (1bb933)

  10. A lot of the hate started with the defenestrattion of so called Main Street retail and went into overdrive when Target cast itself as the hip correct- side of the social issues alternative (though the wage, and product composition by country of origin is similar).

    nk, the last sentence of post #6 is spot-on, the rest sounds like a Sears homer..

    urbanleftbehind (d28da6)

  11. Ok, tariffs are taxes. Half of your taxes go to welfare programs. Maybe more than half. And you will be paying them, no matter what. If not from tariffs, from your other taxes. Wouldn’t it be nice if along with supporting the government, your “taxes” in the form of tariffs, also supported American workers and weakened burgeoning foreign enemies? Like, you know, two stoners with one bong?

    nk (dbc370)

  12. And Walmart became the bane of the accounts receivable departments of its many vendors and subcontractors by waiting until the 59th day (one month late plus the last possible day to have a grace from late fees on the first month) to pay off invoices.

    urbanleftbehind (d28da6)

  13. I don’t often shop at Walmart, but I think Wa!mart tries to hold down prices and offer goods the public wants.

    DRJ (15874d)

  14. The Del Monte CEO made a good point. This is an inflationary time. Adding tariffs means it will be harder on companies, so consumers will pay.

    DRJ (15874d)

  15. Stop the presses!!!

    Tariffs drive prices up at Walmart!

    Sun rises in East!

    John B Boddie (66f464)

  16. More words. Increase prices by how much? On what products. Specifically. And how do we know this is true? Maybe Walmart wants to make more profit and is using this as an excuse. But that can’t be true, because Walmart is our friend, and only wants to sell us stuff at the lowest price possible.

    rcocean (1a839e)

  17. If the tariffs go away, will Walmart then reduce prices? Of course. Walmart is our friend.

    rcocean (1a839e)

  18. Wouldn’t it be nice if along with supporting the government, your “taxes” in the form of tariffs, also supported American workers and weakened burgeoning foreign enemies?

    We should definitely pay to retrain workers in uncompetitive industries and help them find better jobs. An open-ended commitment (which protectionism is) to prop up every industry that finds itself unable to compete is exactly the wrong thing to do.

    Is old Russian saying: Give a man a potato, and you feed him for a day; but teach a man to hide his potatoes under the floorboards, and you feed him until his ex-wife rats him out.

    Unemployment at the moment is 4.4 percent. Labor-force participation has been unchanged since 2015.

    Where are these armies of starving steelworkers and Walmart victims, exactly?

    Dave (1bb933)

  19. Here’s news for you. Remember econ class, and how companies try to maximize revenue by setting price vs. quantity sold. Walmart isn’t setting prices on all its goods based on cost. Its setting price based on maximum revenue. If it Would maximize revenue it would sell AAA batteries at $1,000 a pop. Unfortunately, people always want to believe that if we decrease taxes or lower costs the companies are going to pass all those savings on to us. No, they aren’t. They’re in the business to make money – not be your friend.

    rcocean (1a839e)

  20. If the tariffs go away, will Walmart then reduce prices?

    Why did they reduce them the first time?

    (Hint: it has nothing to do with being your friend)

    Dave (1bb933)

  21. Inflation and profit go hand in hand. Profit is what you pay above the actual value of the goods and services. Want a good indicator of inflation? See how many more billionaires we’re getting and how more billionairier they’re getting.

    nk (dbc370)

  22. 19. rcocean (1a839e) — 5/20/2019 @ 8:13 am

    companies try to maximize revenue by setting price vs. quantity sold.

    No, they don’t try to maximize revenue, unless they’re an Internet based company like Lyft, or Amazon in years past, and even then they may not be trying to maximize revenue, but customers or users; they try to maximize profit. (the difference between revenue and cost) Adam Smith called cost the “natural price” Prices don’t drop toward the natural price when there are legal or de facto barriers to competition, which can often exist when there is a high start-up cost. Generic drugs are a particular problem here. Regulation actually tends to drive out companies already in the market.

    Sammy Finkelman (3fda43)

  23. Ok, tariffs are taxes. Half of your taxes go to welfare programs. Maybe more than half. And you will be paying them, no matter what. If not from tariffs, from your other taxes. Wouldn’t it be nice if along with supporting the government, your “taxes” in the form of tariffs, also supported American workers and weakened burgeoning foreign enemies? Like, you know, two stoners with one bong?

    This sounds a lot like the arguments i hear from the pro-union types.

    One part of this that i don’t understand is that when Unions want to strike to force employers to pay more to workers the traditional conservative response has been to oppose the union and take steps to weaken them. I haven’t noticed any actions or rhetoric on that from the current administration or their supporters.

    Am I missing something or is there a difference between higher costs through Tariffs and higher costs through higher union wages?

    Time123 (353edd)

  24. Here’s news for you. Remember econ class, and how companies try to maximize revenue by setting price vs. quantity sold. Walmart isn’t setting prices on all its goods based on cost. Its setting price based on maximum revenue. If it Would maximize revenue it would sell AAA batteries at $1,000 a pop. Unfortunately, people always want to believe that if we decrease taxes or lower costs the companies are going to pass all those savings on to us. No, they aren’t. They’re in the business to make money – not be your friend.

    rcocean (1a839e) — 5/20/2019 @ 8:13 am

    Good summary of high school econ.

    In real world product planning the decision to offer a product includes the profit analysis in comparison to other potential offerings.

    So if tarries on

    Time123 (353edd)

  25. The closest Walmart to me is 47 miles away (or so says Google).
    Sears and KMart are gone.
    Target opened a store that is too small and in a place with no parking, so no one goes.

    If I need a 25 pack of socks, I go to the Patterico Amazon search bar over there on the right.

    steveg (354706)

  26. hit submit by mistake.

    Here’s news for you. Remember econ class, and how companies try to maximize revenue by setting price vs. quantity sold. Walmart isn’t setting prices on all its goods based on cost. Its setting price based on maximum revenue. If it Would maximize revenue it would sell AAA batteries at $1,000 a pop. Unfortunately, people always want to believe that if we decrease taxes or lower costs the companies are going to pass all those savings on to us. No, they aren’t. They’re in the business to make money – not be your friend.

    rcocean (1a839e) — 5/20/2019 @ 8:13 am

    Good summary of high school econ.

    In real world product planning the decision to offer a product includes the profit analysis in comparison to other potential offerings as well as strategic benefits.

    So if tariffs on a good reduce Walmart’s profit margin from 3% to 1% it would probably drive a discussion about if the price should be raised, another product offered in it’s place, or the product continued at a loss to drive traffic and adjacent sales. Those are really the main options. The guy that runs Walmart is telling the public that they will be raising their prices.

    He’s probably less focused on revenue than on profit.

    BTW as your sit and write your pointed comments about the virtue of trade restrictions, can you tell me how many articles of clothing currently on your body were made in the USA? To the extent that this is a ‘moral’ issue it would make your arguments more compelling if you confirmed you were treating this problem like a big deal through your actions.

    Time123 (353edd)

  27. I am a pro-union type. Both my parents were Teamsters.

    nk (dbc370)

  28. nk, that makes sense.

    Time123 (353edd)

  29. But I’ll tell you what. You help this consumer, me, to repeal the $7.56 in taxes per pack of 20 cigarettes in Chicago, and first chance I get I’ll tell to President to remove the tariffs on Chinese imports.

    nk (dbc370)

  30. Maybe I would help with something else? I’m not a smoker and would rather not smell it. Since we need tax money I’d rather they raise it off of stuff I don’t do. 😀

    Time123 (353edd)

  31. I’d rather subsidize something that would get nk to stop smoking, because I want him around as long as possible.

    (Sorry if that sounds too much like a nanny. But it took a heart attack that resulted in a triple bypass to get my father to quit….)

    kishnevi (0c10d1)

  32. I believe in peoples right to make choices for themselves. But I do think more NK is better than less. My dad had to have surgery twice before he gave up smoking.

    Time123 (797615)

  33. I had never shopped at a Walmart in California until last Fall. Due to, coincidentally, being located smack dab on the direct route between my old and new places, I hit one almost every day for a few weeks in September and October.

    They sold moving boxes for less than 1/3 the price Office Depot wanted to charge me. Diabolical.

    I’d buy out their entire stock, then come back in a few days and do it again.

    Dave (80618d)

  34. @33. OTOH, depending on the volume you need, boxes are ‘free’ — at the U.S. Post Office.

    DCSCA (797bc0)

  35. I don’t often shop at Walmart

    I didn’t shop there either when I lived in L.A., but that was mostly because the grocery unions (whose people were paid worse than Walmart at the time) got the L.A. City Council to ban them.

    Now, I probably go to Walmart 3 times a week. I probably go to the Kroger store (Smith’s) more but WalMart is much better on packaged and canned goods, and OTC. They just have a quality ceiling; not the place to get meat and veggies. I wish that Trader Je’s was closer though.

    Kevin M (21ca15)

  36. @33. OTOH, depending on the volume you need, boxes are ‘free’ — at the U.S. Post Office.

    A little small for moving.

    Kevin M (21ca15)

  37. I am a pro-union type. Both my parents were Teamsters.

    WalMart hires people the grocery union stores won’t.

    Kevin M (21ca15)

  38. Walmart has good prices and selection, but it is not convenient to my house and most of the time it is not worth the trip for the small amounts I need.

    DRJ (15874d)

  39. This isn’t about tariffs, though that is the surface level view. China is a threat to US economic and national security. It also protects its own industrial base with its terms concerning entry to its market. This is all controlled by a system of governance that is morally abhorrent and antithetical to that which Americans (should) hold dear: Liberty for all men.

    This day of reckoning was coming, sooner or later. Personally, I never understood why we blithely allowed our manufacturing sector to be destroyed and umpteen jobs lost in a one sided and rigged game. I never understood why we would engage at all with such a nation. Tariffs? These are sanctions levied against an obvious enemy. We fund their neocolonial initiatives around the globe. Belt and road: the Chicoms build the roads and in turn hand the “lucky” recipients of their corrupt largesse the belt with which they will hang them selves. We are already hearing the grumblings of Africans who are waking up to the fact that they’ve sorta kinda maybe given up their sovereignties for what? A port and supporting infrastructure built to serve the needs of their new overlords, not so much their own.

    The only answer to the threats posed by China is to stop willingly nurturing the dragon that looks to feed on us. Tax on the people!!!! Yeah, maybe. Now look down the road a bit farther than your own nose and see what is surely to come: a military clash that, if the arrangements of the past are allowed to continue, we will surely lose. Scoring cheap political points because of the hatred some of you direct at Trump and his Deplorables is so much short sighted blather. China is a strategic competitor inimical to our own interests: time to wake up, kids. They play to win.

    Bellman (fc5c41)


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