President Trump often sends conflicting ideas, for example he is for the every day person on the street trying to make it through the next month and he loves tariffs, In his mind, raising tariffs on things will encourage the manufacturer’s to build more of the things in the US, in addition the tariffs revenues will pay down the national debt. Then reality begins to settle in.
In an article by Barrie McKenna, he noted new research by 3 economists at the University of Chicago and the US Federal Reserve. President Trump imposed tariffs of 20%, then 50% on washing machines.
While the 3 big companies of Whirlpool, Samsung and LG added 1,600 jobs which is good for those employees. Appliance makers permanently raised prices on all washers by an average of 12%, including those not affected by the tariffs. The price of dryers also went up 12% or $100. The manufactures raised prices because they could.
The affect of the tariffs is Americans, including those who President Trump says he is working for, paid an extra $1.5 billion for washers and dryers which are no better than the cheaper ones they were buying before the tariffs. The 1.600 jobs cost an average of $820,000 a job.
In terms of raising money to pay for the debt, the tariffs rasised $82 million a year, the debt is a little over $22 trillion. The US trade deficit raised $81 billion.
The big winners are the makers of the tariffs are the appliance makers.
Linking to dividend paying stocks, often one of the good things about them is because the companies have a monopoly or near monopoly, they can raise prices and stay in the great competitive space where they are. In the case with the appliance makers, whom people would tend to shop for the best price, they were able to pass on the price of the tariffs and then some to earn a nice profit.
There are more questions than answers, till the next time – to raising questions.