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High tariffs become 'real' with our first $36K bill

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483 pointsptorrone398 comments

There are some people in my circles who have remained convinced that tariffs won’t actually amount to anything and that it’s all bluster.

It seems we’re now entering the “find out” stage, and it’s incredibly frustrating.

As a tinkerer who loves building things, this is heartbreaking stuff. I have projects in progress that may have to be put on hold.

I tend to order things as I need them, but it’s tempting to stockpile the basics. But I don’t think it will help much in the long run if this continues, and truly hope this madness will be seen for what it is and an appropriate backlash/correction will follow.

I actually moved a bunch of money around after the recovery from April 2nd. I just sat their thinking... wow, short term bonds have a really decent interest rate, and I don't think people are taking seriously the fact that the markets can actually fall apart because business is an incredibly complex, multi-variate process, and right now where just throwing wrenches into the gears for funsies.

I'm not even completely anti-tariff. I just think the way we're going about doing these tariffs is pretty much the opposite way anyone who was trying to bring manufacturing back to the US would do them. Low, clear ratcheting up tariffs are tariffs that allow businesses time to change their strategy without disrupting their income streams. Instead, we're going to bankrupt basically anyone who isn't already a multi-national.

Maybe I'm an idiot and I'm missing something clear, but to me, the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years. Other countries' markets have not fared so "efficiently."

Again, maybe I'm missing something, but I'm looking at this much more defensively than I did under the first administration. The one thing I can't figure out is the dollar. My brother is obsessed with the "dollar milkshake" theory, whereas it seems clear that we are messing with reserve status and are trying to intentionally weaken the dollar... I just don't know. It doesn't really make much sense what we're doing, and I haven't found anyone who can make an argument that makes sense to me.

The vibe on /r/wallstreetbets seems to be "this all makes sense as a massive pump and dump". Very useful source of info if you view them as essentially black boxing the stock market.

Game recognize game.

Anyone can see this is a pump and dump. Trump literally tweeted that it's a great time to buy right before announcing tariffs.

> it's a great time to buy right before announcing tariffs.

you mean annoucing the pause?

he flip flops so much i have no idea what's goign on anymore.

I mean, WSB isn’t a serious place, but they have their moments. I just have no idea who would or even could “pump” the entire S&P 500. My best theory of the last month is just basic “sell in May and go away” theory where you get rosier fundamentals in spring because everyone buries the bad news in Q1 reports, but it’s more difficult to hide as the fiscal year actually happens.

> I just have no idea who would or even could “pump” the entire S&P 500.

The White House, evidently. After the 90-day pause was "leaked" on Twitter[1], the market gained trillions in value, which it promptly lost when the White House disavowed it, before gaining back after the president posted that "It [was] a good time to buy DJT" (paraphrasing), and then formally announcing the 90-day tariff pause a few hours later.

1. The jury is still out whether that was an actual leak, or a guess that later became policy.

> I just have no idea who would or even could “pump” the entire S&P 500.

Have you not been paying attention? Tariff announcements.

The signal to noise ratio is difficult but now and then a factoid pops up - like the amount of retail investors piling in recently. It aligns with messaging in other forms of media that they, well, only use as indicators and frequently don’t take seriously. I’m using it often as a useful tool for counter-balancing my long term plans with the impatient gambling mentality which feeds the machine there. I learned my lesson ages ago from ZeroHedge about being overly bearish and things didn’t play out, so WSB is helpful in my situation because in principle I agree with the market is distorted assertion but believe the collapse will manifest months from now and this is a sucker’s market. Q2 earnings calls are going to be telling.

A factoid is something that is masquerading as a fact, not a small fact.

I don’t think any collapse is coming. I just think the risk profile doesn’t justify many of my smaller cap investments, and where I am in life.

Even a broken clock is right twice a day.

It’s not like WSB has any inside info, and we conspiracy theories are always “fun”.

> the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years

Yes and, to your point, with an independent federal reserve. If that gets messed with, things could get much worse for the U.S..

Same as you I'm in defense mode. I exited the market in early February since something was not right. All I have (not much) sits in money market fund now at 5%.

As a Latin American, I can't help but buy the American Exceptionalism thesis, and seeing you guys in this situation humanizes you so much. The US has such a strong bureaucracy and high bar for competence that you generally lack the immune system required for detecting con artists and social climbers - at least in politics. Ask a random Argentinian or Brazilian what politicians Trump reminds them of, and you'll get a seemingly endless lists of genuinely stupid, borderline sociopath populists. Follow up with a question on what are the consequences of having arbitrary, ever-changing tariffs on most goods for the purpose of industrialization, and you'll get a laugh, then a sad face.

Import-substitution is bad for econ 101 reasons that most people who have an axe to grind against Dems would've been absolutely capable of grasping only a few years ago. Now, it seems so many are willing to turn off a part of their brains for this short-sighted wishful thinking. "Well, the official narrative is that we're doing this to get manufacturing back, so let's wait and see" is something most people would immediately perceive as bs if a Dem was sitting in the Oval Office. Seeing a politician campaign on a stupid platform, and then getting surprised he actually shoots himself in the foot spending political capital pursuing is also very Latin American.

The good part is that the soon-to-be-coming recession the federal government just fabricated out of thin air is fully self-inflicted, and therefore somewhat easy to fix. The bad part is you have (at least) 4 more years of this lunacy, so it might take a while.

As someone who grew up in Eastern Europe, I had a completely identical reaction. We had so many similar populists and idiots in power, one cannot help but recognize the obvious pattern.

Many people in America seem to be convinced that their involvement in the democracy ended after voting in the elections, and cannot conceptualize how to deal with an adversarial government. The scale of the protests and pushback Trump administration has received is laughably small compared to the scale of America as a country. People are lacking a basic political immune system, or even a sense of self preservation.

And the most puzzling part is that the entire situation is 100% self-inflicted. It usually takes a major war or a sustained external campaign to inflict the kind of damage Trump administration has done to the country in such a short period of time.

There has been a sustained campaign of propaganda, stoking division and culture wars. There has also been a sustained class warfare and concentration of wealth at the very top as most people can't seem to get ahead. Both political parties sold out their constituents a long time ago and the supreme court has been stacked with several criminally corrupt and treacherous villains.

This is the exceptionalism they were talking about. These things happen elsewhere also.

That's just Wednesday in Eastern Europe.

This is every country, buddy.

I'm definitely no economist but the current administration doesn't seem to listen to them anyway. To me, this is going to be an extremely high tax on lower and middle income people, as well as small businesses. Most of us buy Chinese products all the time or, at least, ones that have Chinese in the supply chain somewhere. I know there has been a trade imbalance and maybe tariffs is a tool that could have been used, but I learned in high school(maybe in collage too) that it's most effective when you present a united front with other allies. Unfortunately, we really don't have allies like we used to. The current admin has destroyed, or at least highly eroded trust and partnerships we had in the past. By attacking almost every country, we stand truly alone. There was an article about Vietnam recently which explained that because we have/are fighting with them too, they have great leverage to get what they want by leveraging the U.S. against China. To me, we've just given away all our leverage by not being trustworthy and attacking all other countries at once (figuratively, for now at least). I'm simply not hopeful for our future from a majority of citizens point of view. For our GDP per capita, we do absolutely horrible, in what seems like most international indexes, comparatively. The areas we do "well" are not good ones. Like number of our citizens incarcerated. I think we beat China, Russia, and most every country in that. From the perspective of "life, liberty, and the pursuit of happiness", I think we've failed. I don't know, exactly, but from what I've read our Cost/Benefit ratio on healthcare is one of the most dismal in the world. We don't rate well, in almost any category that is a positive for our populous, especially considering our GDP per capita.

I think the burden of proof is entirely on the admin in the White House who seem completely incapable of keeping their story straight and providing anything of value to sooth anyones fears other than "trust me, bro!"

> I haven't found anyone who can make an argument that makes sense to me.

The goal is to eliminate income taxes and replace it with tariffs. An added bonus (for the administration), is that tariffs can be changed if the party in question pays for access to make their case.

The stated reasoning of supporting domestic industry is a smoke screen for the above.

Right, except that’s self-defeating and won’t work. The idea that we can plausibly generate enough revenue from tariffs to replace the income tax is inherently self-defeating, because if the tariffs work at bringing back manufacturing, we’ll stop imports. If they don’t, we’ll consume significantly less, more people will become poorer, and expenditures will increase as revenues decrease.

Maybe there is an equilibrium in there, but I don’t see it.

I don't think the policy working out for the country was considered in deciding to go this route.

Baked in this plan is the idea that the revenue from tariffs will be much smaller than income tax revenues, and therefore that the federal government will also get smaller.

Right, but that implies that spending is controlled by revenues… when it’s clearly not. That just means higher deficits, threatening a default of US Bonds, which is a worst case scenario for American prosperity.

Replacing taxes with import tarriffs will dramatically reduce consumption, and therefore tax revenue.

Taxes don't incentivise earning less, but tarriffs most definitely incentivises spending less!

This theory does not make sense.

> This theory does not make sense.

The theory "makes sense" in that it's what he's stated as a goal. But as policy, it's nonsensical. This is our world now.

I don't think the metric of success is how much mfg comes back to America, it's just a simple slogan that plays well. The real movement is the mfg flocking out of China and into our allies countries.

Is this actually happening? I figured the result would be China simply swooping in and picking up all the trade partners we've alienated. And also all the soft power we've abandoned.

> The real movement is the mfg flocking out of China and into our allies countries.

If Trump cared so much about America's allies, why has he also imposed tariffs on Canada and repeatedly threatened to annex it? Why has he repeatedly talked about annexing Greenland?

The USA is 20% of Chinese exports

China has been moving the manufacturing to their allies for years, as their labour force climbs the value chain.

Here in Aotearoa I am looking forward to continued booming trade with China and it's allies, hoping our government (we have a particularly bad one too currently) do not try to suck up to Mr Trump.

But the insanity in USA is bad for everyone. Hopefully we will get used to it soon and adjust to living without USA trade, and dollars

That will be good for everyone but the USA

> As a tinkerer who loves building things, this is heartbreaking stuff.

Tinkers are inventors, which are future entrepreneurs. This administration can't think as far ahead as its nose.

> Tinkers are inventors, which are future entrepreneurs. This administration can't think as far ahead as its nose.

I don't see any evidence that they can't or don't think far ahead. These are people who think that "Competition is for losers". Past that, they're smart cookies.

I stockpiled the basics for my projects before I learned how fast the basics can shift.

That’s a really good point that makes this so much worse.

It’s not just that I may not be able to continue some projects, but that I may not be able to continue pushing the boundaries of my knowledge and experience as I learn more.

Thinking about this in terms of younger aspiring builders, this will stagnate the technical growth of a generation.

This getting-ahead-of-the-tax-hikes/inflation thing was probably why the segment of households with meaningful disposable income (top quintile or so) increased spending in Q1 even as everyone else was pulling back.

We did it with air conditioner upgrades, among other things. Now? Five figures of previously-probable, but optional, spending for the rest of the year is on hold indefinitely. Prices on lots of things (construction materials, holy shit) are already way up, so we'll be sitting on as much cash as we can until that eases up. We don't need that much, really....

I've been "stockpiling" car parts for years for various maintenance I need to do... I guess I should get to doing that actual maintenance but those strut springs still scare me.

When covid hit, I def sold a lot of junk that I had sitting around for years

I think hobby areas involving anything produced overseas will get utterly annihilated. Board game companies are already shutting down. That whole industry went from a multi-year boom to a bust this year due to tariffs.

I've been trying to put a TCG together, I might just get a printer and print my own cards until volume demands otherwise. At least there are still high-quality options in the US, like USPCC, but you'll pay for it.

The madness is the total reliance on cheap Chinese products, with very few or zero US alternatives. But building knowhow and sourcing rare metals will be a very tough challenge.

It seems that China has the upper hand for now, so it will be interesting to see how it plays out.

China has the upper hand and the US is being run by morons. With the US cutting itself off from the largest supplier of electronics while simultaneously destroying the basic research infrastructure that keeps America on the bleeding edge you can expect a brain drain towards Europe and Asia. The damage from this administration will last generations.

We are being run by abject morons who will never be able to understand simple truths, one of which is China is in a far stronger position: their factories are missing dollars. We are missing goods. One of those is easy for a central bank / government to replace.

Watching these people discover where the world's rare earths come from is equally amazing and terrifying.

But think of the coal mining jobs...

In all seriousness though, China is also not some young slick economic powerhouse. It's largely propped up facade with serious structural issues that the US doesn't have.

Also keep in mind that while countries are annoyed with the US, that doesn't mean they are going to welcome Chinese ships into their waters.

The brain drain started decades ago. We've been importing people for STEM jobs and exporting manufacturing for a while, leaving behind large numbers of people with no hope for a better future. Now the rest of the country faces that prospect as well

I think it's worse than generations. It will likely never recover. What's happening resembles when private equity takes over a company and runs it into the ground intentionally.

Not sure why people keep insisting that goods from China are “cheap,” which always seems to carry a negative connotation when in reality, “cheap” is exactly what we seem to want as consumers in wealthier western countries.

And in many cases, these products are neither cheap nor expensive, they’re simply the only option, because no one else in the world manufactures them. So, what exactly are we comparing them to? And if the assumption is that producing the same goods in Europe or the US would be more expensive then that’s likely true but only because we still expect to earn a living wage, even in factory jobs

> these products are neither cheap nor expensive, they’re simply the only option, because no one else in the world manufactures them.

This is exactly it. And even if an item can be US-supplied, it's components are only available from China.

Tariffs are how we get it to stop being built in the US.

The USA could bring manufacturing back, but not with tariffs.

They can't tell businesses "Look, we've dramatically increased your cost of doing business, made your products more expensive (which will likely lead to lower sales) and we're forcing you to spend extra capital by paying tariffs on your products... Now all you need to do is come up with billions of dollars to build the factories that build your product and eat the high costs for the 5 - 10 years it will take to build the factories. We don't care if you're a small business that only sells $1M of product a year, if you want to reduce your costs, you need to build the factories."

Of course, the question is whether Americans really want those factory jobs -- do parents aspire to have their children work in a factory assembling iPhones? There's only so many Robot Technician jobs to go around (despite the promise of unlimited high paid technician jobs, for the forseable future there will be plenty of menial factory jobs)

I don't know what jobs will be left. As our benefits have dried up. e.g. retirement, healthcare, job stability. Every article I've read basically said workers are going to need to be very adaptable. Forget about the lives your parents, and or grandparents had. That is gone. AI is only going to make things worse. I'm not anti-immigrant but H1-B has made the U.S. dependent on Indian labor, as it has done exactly what it was never supposed to do i.e. replace american workers with cheaper foreign labor, this is largely due to Indian Contract companies that are rife with fraud (both conservative and liberal administrations have found that). So, IT has lead the way to professional gig work i.e. contracts with either no benefits, are very high cost ones. Without protection, there just will not be stable jobs in this country. Forget retirement, most of us probably can't afford basic health care. Don't even think about dental care. In my mind, we are entering a new feudal age. No it won't be land based, but it's the same thing. Land was just the leverage for power, now it might just be net-worth and/or position. In general, American's are becoming poorer. I see us looking more like other nations with a largely poor populous. I'm guessing the rich already see most of us, like the nobles of old as peasants, with the same or similar justifications for bigotry. Divine right, or the rest are just dumb, and uneducated and only fit for manual labor, until we die (early).

P.S. I love sherlock holmes, and from that have some fascination of Victorian England, I just never thought we would go back to it. It was great if you were a noble and/or rich, but most of the populous wasn't either and suffered. All from my understanding, so historians or just more historically knowledgeable people can correct me.

This has very little to do with "bringing mfg back."

I think the total reliance is a legitimate concern that needs to be addressed.

I still think this approach to addressing that issue is complete madness.

Not only is there no coherent plan for how that reliance will be reduced, but we’ve now crippled ourselves in the meantime.

> I think the total reliance is a legitimate concern that needs to be addressed.

> I still think this approach to addressing that issue is complete madness.

You're assuming the 'total reliance' argument and corresponding actions are being done in good faith. The original 'emergency' declarations justifying large initial tariffs in February were because of a 'fentanyl crisis'. Which then morphed in to 'well, we should be manufacturing here for defense purposes' and assorted other arguments along the way ("we're getting ripped off!", etc).

There's a danger in being cynical about this, but also danger in taking everything at face value. There's been no coherent communicated policy with justifications and expected outcomes or timelines ever put forward the same way twice from this administration.

Yeah. One thing among many that some in the US don't seem to get: only one side in this war needs to completely rearrange their economy in order to survive, and it's us.

I have no idea what the administration’s plan or thoughts might be, but I suspect that one part of it is that they’ve seen how many governments (including their own, as well as allies like the EU) delay and defer as negotiation strategies. The EU even used delays and uncertainty against its very closest ally (the UK) in trade negotiations. As a result, sudden and ‘violent’ shifts are the only way to get things done in the current environment.

The only way for China to lose influence in this fight is by playing ball. They can simply continue to trade with the rest of the world and be totally fine when it is US consumers paying the bill.

This is what I don't quite get? What is the impetus for their government to want to play ball with us?

The incentive for their companies is that they can access US markets. But their government is a bit different. That government has clearly been serious about 2 things for the past couple of decades, one is developing an internal market. (Which, prior to our imposition of tariffs, they were failing miserably at). The other is their pivot to the global south. (Which, prior to our imposition of tariffs, they were wildly successful at).

Now that we started a trade war, they will be more successful at both. Especially the pivot to the global south. I guess I just can't see why the government of China feels more urgency to talk with us, than it feels to accelerate their pivot to, and development of, markets in the global south for instance? Why is talking to us the better choice for their government strategically speaking?

I mean, if I were sitting in their shoes, I'd just be like, "Man, this is be the perfect illustration of why it was so important to pivot to the global south in the first place."

That's a valid argument, but a 125% tariff with basically zero notice - on manufacturing and shipping timelines - is not the solution.

>"... is not the solution"

The source thinks the opposite. You can complain directly. I don't think it gives a flying fuck

Global trade is goodness, not madness.

There is surely a balance to be struck to get some of the benefits of global trade, without creating a dependency that can be exploited to create leverage against you.

If your trading partner is an authoritarian dictatorship that has publicly stated they are in a thousands-year struggle for global supremacy, then maybe we should shift some key imports away from them

I get what you are saying, but the U.S. BUYS goods, because we are "too rich" to make them. We SELL services, because other countries are "too poor" to offer them.

When this administration focuses solely on one side of that (Goods vs Services), they miss the forest for the trees. I'm not saying we shouldn't bring back manufacturing, because we should, but we can't pretend that we get the short end of the stick in this trade partnership.

China makes the cheap shit that isn't economical here, and the only way to make it economical here is to pay a tax on the cheap shit we want if it isn't made here, but the crazy thing is we could do a 400% tariff on Chinese imports, and it is still too expensive to buy American for most goods. Not even getting to the point that we don't have the infrastructure here because that also costs money, which would rise the price for American goods even higher.

Does Bill Gates mow his own lawn? No!

Does Donald Trump grill his own Big Mac? No!

Because when you hit a certain "wealth bracket" you stop doing things that are below that and hire them out. We hired China because we were too rich.

Wait, so is the solution to make ourselves poor?

Something my half-brother said ...

"Cheap foreign products are a necessity when so-called American companies don't love Americans enough to pay them what they're worth. It's the whole reason things went overseas in the first place. It's gonna be nice if we can finally get American companies to actually support America and pay citizens what they're worth."

The above sounds nice, but it's oversimplified, like a lot of political rhetoric recently. Now, if this does end up making real living wages for the American worker a commonplace thing, that's awesome, but I'm pessimistic given the history of things, how money can influence politics, and how corporate lawyers can find loopholes.

I'm not sure if it would pan out like how your half-brother wants it to be. Let's assume the manufacturing jobs return here and you are getting paid American wages. But if you try to turn around and spend it on anything, it will just be more expensive because everything else you want to buy is also being made in US factories and those workers are also getting pay similar to yours? You might have a manufacturing job finally but now you are paying $350 for a Nike shoe that used to be $150 when it was made in China. You want to buy a new TV? It costs more now. You want to upgrade your old iPhone? It costs more now.

So will the American manufacturing wages actually translate to living wages or will you just be getting paid more on paper but you still feel poor because the things you want to buy are all more expensive now?

Wait till this person finds out he can't have his mandarin orange segments in his nightly Jello salad anymore and then I expect they'll have a different opinion.

What would an american upper hand look like?

I agree, and I am in favor of protectionist tariffs. But it does seem to be poor strategy to rush into high tariffs without the pieces put in the place for American industry to grow and benefit. That said, I don't believe Trump is that stupid (despite the trendy opinion to the contrary), and I think he knows this is doomed to fail if the goal is immediate American industry bloom. Which is why I don't believe these are intended to be long term. Based on how the other tariffs have gone, it seems to be more of a negotiation tactic to reduce tariffs on both sides, not protectionism. China has just put up more of a resistance to it than other nations have, so now it's turned into a game of chicken.

> That said, I don't believe Trump is that stupid

Do you think he's acting when he does things like keep preventing an interviewer from moving on because he wants to make extra sure everyone knows he entirely believes that obviously-photoshopped, not-trying-to-look-like-anything-but-an-overlay letters and numbers on a picture of someone's hand were in fact real tattoos?

I just got an email this morning from ARACE, one of the main suppliers of Radxa boards for global shipping.

I ordered their Orion O6 Mini ITX board back in December, for $430.49 total ($85 shipping).

The email this morning said they had to cancel all un-shipped orders, and I could re-order and prepay the tariff through 4XL (they dropped DHL and FedEx due to tariff complications).

I put the board in my cart, and now the total is $1500.90 ($1,150 in shipping).

I'm happy to pay for the actual cost of shipping a single item across an entire ocean, but maybe that increase is a bit much...

> I'm happy to pay for the actual cost of shipping a single item across an entire ocean, but maybe that increase is a bit much...

The Import-ant thing (heh) is that the additional money you must pay is not going to the manufacturer or the shipper. It won't be improving working-conditions of foreign sweatshop laborers, or upgrading cargo ships to reduce pollution, etc.

Instead, it's going to a US government official that basically seizes goods crossing the border who won't give them back without a payment.,

Worse: These higher import-taxes all US companies and consumers are being made to pay will probably go towards the benefit of... lowering what rich Americans pay on their personal income taxes.

This made me wonder what the tariffs will do to private jets and if the 100% write off for them just includes everything or if there is more nuance there.

The jets can be registered somewhere else (Bermuda, Cayman Islands, Aruba, Isle of Man) and thus never officially imported into the USA.

e.g. https://www.occrp.org/en/investigation/tax-rules-for-the-sup...

Same as yachts and big ships.

Genius!

No. I live in a wealthy Wyoming town. We already have runners who will bring tax-free construction materials in from Canada and Mexico (or hell, in undeclared cargo, idk) for cash. This is how life works in high-tax states like Greece and India.

I’ve heard private jets goers barely get bothered with customs - I’m curious how much smuggling starts happening via them.

starts? Might I introduce you to the story of Barry Seal?

https://www.imdb.com/title/tt3532216/?ref_=nv_sr_srsg_0_tt_8...

My point is less about where the money goes and more about not subsidizing cheap Chinese shipping.

I don't think I should be able to order a little plastic trinket for $10 shipped direct from China, when just shipping the same thing inside the US costs $10+!

That's a reasonable desire, but I'm not convinced the real shipping cost is being subsidized very much. At one point the US was losing a dollar per item. Fix that and the trinket only goes up to $12. And we've already been fixing it.

When shipping from China instead of the US, the first segment is cheaper, the middle distribution and last mile are the same, and there's a ship segment that splits a couple thousand dollar container cost across a massive pile of packages. I don't expect a particularly big difference.

> My point is less about where the money goes and more about not subsidizing cheap Chinese shipping.

FWIW, most of the packages I've bought from AliExpress over the last 6 months have been delivered by private couriers (like OnTrac for packages from China or UPS for packages from the US).

I have a hunch that AliExpress hasn't been using USPS shipping for a while now.

Why not? The trinket was made in China in the first place, so it had to already cost some amount to import into the US + some amount to ship to you + some amount to the reseller.

Skipping the reseller saves you money and pollutes the environnement less.

They're talking about just the postage cost being $10. Even for something that is produced domestically. Postage to mail something >1,000mi: pennies. Postage to mail something across town: $10.

You think that makes sense?

My "this implementation ticket is not actually what the customer wants to achieve" senses are tingling. :p

What is the fundamental harm or injustice that needs to be fixed or reduced here?

I'm confident there are much better ways to tackle those things (e.g. pollution, consumer waste, moral failings) than a blanket import tax on an entire country-of-origin, even one done in a proper and legal way.

In a lot of developing countries with high tariffs people end up going abroad to buy stuff and bring it back in their luggage as used of not much value. Like in Vietnam a lot of people would visit Singapore. It's funny seeing the US in that position. Maybe you'll have to visit a friend in Canada or Mexico?

De-minimis changes may make that hard, but recently I learned that there is actually an official Volvo program to create such a tariff-dodge on cars: https://www.volvocars.com/us/l/osd-tourist/ Fly you in, have you drive the car just enough that is your 'used' property, import.

I think the pay up front thing makes sense. Nobody knows who is going to actually pay / what the volume will be at the new tariff/tax point and the businesses need to find out fast / up front.

I won't defend these tariffs, or their rollout. But I will say that our dependence on Chinese manufacturing (and engineering, these days) is not good for our nation.

Free trade combined with cheap labor led to a massive loss of national capability. We outsourced 75% of the supply chain for electronics, and provided decades of free training to foreign companies. Then we pulled a surprised mug when those same companies decided that they don't need us any more.

As a parent of young kids, I'm also keenly aware of how much random plastic garbage we import - just to throw it away after maybe one use. Party favors are a big one. Families are drowning in low-cost, low-quality products that wind up in a landfill. Free trade created this situation, and I don't think it's good for anybody except importers and factory owners.

I don't know what the solution is, and the current tariffs clearly aren't it. But free trade with China hasn't exactly been great for the US in a longterm sense, and we shouldn't pretend otherwise just because we're getting cheap consumer goods.

Had tariffs been applied early when American corporations stated offshoring manufacturing to increase their profits the industry base might have been saved. But now these tariffs are just going to introduce pain to people in substantial price hikes and no company in this chaotic environment is going to put the collective trillions of dollars to building capability back in the USA. This requires a better plan.

I wonder whether you realize that the US is currently second in manufacturing capacity and far ahead of the country (Japan) in third place. (I'm not defending Trump's tariffs.)

The situation in electronics manufacturing specifically I will concede is concerning.

Is that a per capita metric, or overall? America is fuckin huge.

Overall.

Energy costs (particularly natural gas prices) are much lower in the US than in the other manufacturing powerhouses, and some manufacturing is very energy-intensive.

That's a goofy argument because manufacturing did not start to be offshored until AFTER tariffs were removed.

Chart: https://upload.wikimedia.org/wikipedia/commons/a/ad/Average_...

Eh, doesn't that chart support their argument?

Domestic manufacturing decreasing as tariffs decrease implies that increasing tariffs would increase domestic manufacturing. With their argument being that you needed to do it 50 years ago when the shift started because if you do it now it's really painful.

> if you do it now it's really painful.

That's a misnomer if ever there was one. The current batch of tariffs will destroy enough American wealth to nosedive the economy before any long-term change. Manufacturing is not coming back, there's just not gonna be enough wealth in the US to warrant it. Plus there are counter-tariffs, so if you make it in America, you can't reliably export it.

The pain increases with time, but we don't have a time machine so what is the alternative?

Correct, however that doesn't mean that bringing tariffs back will have any immediate impact to reverse this change. 2025 is not 1980.

If your goal is to prevent cheap throw-away items from ending up in landfills, there's a straight-forward policy the Govt could adopt - just make it very expensive to send stuff to landfills (and stop the practice of sending our garbage to poor countries where it just ends polluting rivers and oceans).

This would encourage people to buy only high-quality items that are longer-lasting and are not just discarded very quickly. If it costs $200 to discard your dishwasher, maybe you will buy a high-quality product that might have a higher sticker price upfront but it has better reliability and won't break down quickly requiring you to replace it and therefore pay the hefty landfill price. This in turn would encourage manufacturers to build products with better reliability.

But how do you even know if it's actually higher quality. I find that expensive stuff breaks just as readily as cheap stuff in many cases. Speaking to dishwashers specifically in my rentals I've found that pretty much they all have similar flaws. The $1500 Bosch doesn't last longer or clean better than the $300 Frigidaire. What I've learned is that the best is to get the cheapest, but popular model with the decibel rating you want. Samsung Stormwash has been the best for me because the replacement parts are readily available. The cheaper models they keep changing parts every 6 months so it's more difficult to replace them.

You would find them the same way you find any good products today (word of mouth, product reviews, etc). But currently consumers don’t care so much about the longevity of any product or its repairability because throwing it away and getting a new one is the more economical choice. Manufacturers instead focus on gimmicky or useless features while not focusing on reliability. If disposing an item to a landfill is made to be expensive, then consumers will start making different choices and manufacturers will change their products to meet their needs.

Does it have more than the minimal legal manufacturer warranty ?

As you mention, how long are the repair parts available ?

What do repair shops say about the repairability of the model ?

Where is it made ?

>I won't defend these tariffs, or their rollout. But I will say that our dependence on Chinese manufacturing (and engineering, these days) is not good for our nation.

How would you solve it differently?

Not OP, but it's clear that slow, low, scheduled tariffs are how you move manufacturing. When a business say, hmm... in 5 years, we're going to be unprofitable, we should probably invest in an American fab.

This is also why you pass the tariffs through the legislature and not via some literal "emergency" order, which means that the tariffs could disappear at literally any point, and probably will if things get bad. So what's the point of investment if you have a better than 50-50 chance and you're going to feel the pain either way?

It's just exactly the opposite way anyone who is seriously trying to shift manufacturing would go about doing it. There is also some strong dollar issues, but that's really complicated.

With what we know now, or going back in time and making different decisions than what were made? offshoring isn't necessarily the wrong decision, but sending it all to one country with hostile form of government to your own does seem like a bad move. China just happened to be smart enough to develop in this way where Mexico or other Latin American countries did not, nor did other Asian countries. They are all now trying to play catch up, but only after China became THE place for all of this manufacturing.

There is no overnight solve at this point. But a solution would be working to help countries with more friendly government to your own to build up their manufacturing with the promise of guaranteed business to help prop it up by moving away from the hostile government.

> But a solution would be working to help countries with more friendly government to your own

In other countries we are scared of, not friendly too, the USA

The Chinese and others often prefer to subsidize their important industries rather than taxing their own citizens in the form of tariffs.

No, China imposes rather large tariffs on external goods to force internal consumption. That's beyond a bunch of other measures that prevent foreigners from starting businesses or owning property.

Of course as other comments in the thread have pointed out: a much smarter way to roll out tariffs to encourage domestic manufacturing is by slowing ramping them up to give industry time to react.

My lathe was $3400. A week later the price is now $4000 thanks to tariffs. There are no domestic manufacturers left and banks/Wall Street aren't going to finance someone spinning up a machine tools company. The difference in price isn't enough to erase China's excessive subsidies to their industry combined with their lower labor pay rates so even if someone did try to compete they still couldn't match $4000. My best guess is more like $6-7k. In the end all the tariffs are doing is making it more difficult to get into machining.

If idiots and sycophants weren't steering the ship the US would have a state-run investment bank that partnered with private capital to offer investments to anyone who wanted to start a business. Frankly I think there is lots of opportunity in various spaces like machine tools to make innovative products at all scales from the small hobbyist to big industrial shops. It won't be a 1000x return though so no one cares.

> That's beyond a bunch of other measures that prevent foreigners from starting businesses or owning property.

In defense of the comment you're responding to: measures like making it impossible to compete by subsidizing their domestic competition. (I wasn't trying to suggest China and others do not use tariffs)

There's also another effect though : that money goes to the government. What is it going to do with it ?

Not expecting a positive effect from that from this administration, but in theory there could be one. Like that investment bank. Or just lowered taxes.

> If idiots and sycophants weren't steering the ship the US would have a state-run investment bank that partnered with private capital to offer investments to anyone who wanted to start a business.

Fwiw this sounds like an aspect of fascism. Just defining, not criticizing. It clearly works for China.

> Fwiw this sounds like an aspect of fascism

Can you explain that?

Call it a sovereign fund then.

I'm confused. Average tariff rate in China is higher than in US https://en.wikipedia.org/wiki/List_of_countries_by_tariff_ra...

Here's a different argument: there's nothing to solve in relation to Chinese manufacturing.

The US "dependence" on Chinese manufacturing is not a problem at all. It's mostly just a wedge/scapegoat/distraction issue to placate constituents who have faced decades of declining general welfare due mostly to domestic policy and not trade issues.

For example, trade policy with China didn't force the government to lower taxes on the wealthy to cut public college funding (college used to be free in California, where do y'all think Silicon Valley's innovations came from?), refuse to implement single-payer universal healthcare, or refuse to address the housing affordability crisis.

Have a diverse economy and tell corporations "no" when they want to move manufacturing to other nations. Or tell them to delist off American markets and move the actual company to the cheaper nation. They want the protections and freedom of the US economy but they don't want to pay for any of it. That's called a parasite and they aren't needed here.

> our dependence on Chinese manufacturing (and engineering, these days) is not good for our nation

If we only tariffed China, this argument would hold water. Instead, we’re handing every country’s imports to China on a platter.

The bulk of US wealth and economic strength is is high value, highly profitable services. I worked in sales support for Engineering and a 60% profit on labor was the norm. There’s a tremendous gap in low value services (restaurants) which distort the efficiency of the US economy as best reflected in a lack of social safety nets on morality grounds rather than economics. COVID stimulus proved that the nation would not collapse if the most vulnerable were subsidized, and it’s against the political machine’s interests to confront this reality.

> COVID stimulus proved that the nation would not collapse if the most vulnerable were subsidized

The resulting inflation has lowered the purchasing power of the vulnerable and increased the wealth gap.

> Families are drowning in low-cost, low-quality products that wind up in a landfill. Free trade created this situation, and I don't think it's good for anybody except importers and factory owners.

No, free trade did not create this situation. People like you did. I'm not over here drowning in useless plastic and we've lived in the same globalised world together.

Sure. But this is not the way to do it. In fact if I were to think of a way to destroy the USA, this plan of Trumps would be it.

especially with the recent military changes. everything I'm seeing just reeks of foreign operatives initiating plans that benefit the foreign government.

> Then we pulled a surprised mug when those same companies decided that they don't need us any more.

What does this mean?

mug = face

The clearer wording is probably:

>Then we were surprised when those same companies decided that they don't need us any more.

We all know this, and most people I know are all for onshoring more stuff back here as well as with friendly nations around the world. What Trump is doing is insanity, zero business acumen, zero chances of success. To bring some (certainly will never be all) manufacturing back, we could have real business incentives, ending h1b visa program, tax relief for industries that "disappeared", target tariffs and trade agreements. Instead we get some kind of shitty AI math conjured up by DOGE boys that claims "trade deficits" are the same thing as "tariffs" and whispering it into Trump's ear.

I truly believe Q2 numbers are going to be ugly and these temporary pumps in the market are very irrational. We're going to see the effects on earnings and employment from costs skyrocketing overnight. Many small businesses can't front the money for tariffs.

Market has been divorced from fundamentals since COVID IMO. Too much money with nowhere else to go and too many index fund investors really inhibit price discovery. If folks start having to cash out their 401ks, we might start seeing a decline, but even then that's a tiny % ownership of the market.

What do market models say about what happens as more and more of the "pie" shifts toward people and entities whose only demand is investments, not (a meaningful amount, proportionately, of) consumer goods or non-financial services for ordinary human wants and needs?

It's gotta be... bad, right? It seems like it'd be bad.

More investment money available => the net must be cast wider to find investment opportunities => riskier opportunities get funded.

Is it a net good or bad thing to try riskier stuff? Maybe some moonshots pay off, maybe a ton of money gets wasted on stupid ideas.

This is pretty much what’s been happening since 2008.

It feels like a weird backdoor to socialism. Look, we're capitalists, we trade stock on open markets ... but really most stock market gains come from a tiny fraction of companies with incredible performance, so everyone just invests in index funds to make sure they own all of the stocks, including the ones that will go up a lot ... and since we all own all of the companies, we start making sure our government works to prevent the companies we own from going out of business ...

IMO the 2008 financial crisis was the beginning. Stock market has been following the monetary pump since then. The crisis was never solved. Now we are going to suffer a much larger one.

Since Covid? Since the 1990s when P/E ratios in tech started to hit the high 20s and 30s. What was “crazy” back then is de rigeur now, and even paltry.

Markets have been divorced from fundamentals for years before COVID. Wealth is just too concentrated in a few hands and people don't seem to understand the affect this is having on the market.

I'd argue market patterns have been confusing since the end of the mortgage crisis.

I hear this from MAGAs and I don't buy it. It seems to be their go to reason for the coming collapse of the economy from instead of the real reason of self induced stagflation caused by unhinged economic policy from a clown. I just don't buy it. Trump is deliberately attempting to bring on the 2nd Great Depression and he doesn't care because he has cash stored away enough to last several life times. He just likes playing God with the economy because cowardly republican congress members quiver in fear he might give them a thumb's down.

> too many index fund investors really inhibit price discovery

What?

The Efficient Market Hypothesis is that securities prices represent the best available information in the market, because if they didn't, smart investors would take advantage of the unincorporated information to make money by buying the underpriced securities and/or selling the overpriced ones.

Index fund investors do not do that; they just buy the securities that are listed in the index, which are selected typically because they have large market capitalization or are old, not because they are underpriced. So, to whatever extent the market conforms to the Efficient Market Hypothesis, it's not doing so because of the index fund investors.

The price of a stock like Tesla is supported due to its inclusion in the S&P 500 index funds. If you asked every person who owns SPY if they'd want to own TSLA, I imagine it would not add up to 100%. If State Street decided tomorrow that they were removing TSLA from SPY, it would crater the stock.

Time and time again we see when the investors want to see a bump, they lay people off. We have execs that openly talk about maximizing head winds by running leaner than necessary so that when the next tail wind comes the gains from the shift are as big as possible... for investors.

I'm not excited to see how an administration that seems to enjoy manipulating market swings pairs with investors that treat the labor force as a stock price lever.

The market should discount all future cash flows so as long as we end up in a more normal place the results of any one quarter don’t really matter. But yeah, the market is assuming this all resolves itself in relatively short order, which may not be the case. Whether or not the response is rational… depends how quickly it resolves.

I can tell you our tariff markups are ugly. Q2 is going to be a bloodbath where I work.

Q2 GDP is estimated to come in at 2.3%, aka no recession: https://www.atlantafed.org/cqer/research/gdpnow

This estimate was produced today (May 8), and represents increasing GDP growth vs. the previous estimate

In January their model estimated 2.4% https://web.archive.org/web/20250107140003/https://www.atlan...

The model is likely based on fundamental economic factors and rational decision making. The latter is why Q1 ended up with -0.3% growth. You could call this the Trump effect.

Hilarious because 10 days ago it was -2.7%:

https://www.atlantafed.org/cqer/research/gdpnow/archives

This wild of a swing makes me re-assess depending on this data for anything.

That was for Q1, not Q2.

Phew, thank God. Crisis averted. Christmas is saved!

> tariff taxes are paid before we sell any of the products and are due within a week of receipt

This is going to smash the cash flow of so many small businesses

and as the article says it's going to cause prices to shoot up so even if they have the cash, some dongle that would sell at $10 might not sell as well at $30, so they aren't even going to be able to e.g. borrow money to float until they can sell the goods.

And if that tax isn't paid the shipment goes back, billed to the original shipper.

I wonder how much stuff is going to be completely wasted by this process.

Not just small. _all_ businesses.

"Recession!"

I mean, aside from the profits.

Very exciting that we can't predict how much extra we'll pay by the time our orders hit the shores.

> products we couldn’t manufacture ourselves even if we wanted to, since the vendor has well-deserved IP protections

That's something I hadn't though about in the context of tariffs with interesting implications.

Does following IP rules mean that any products and technologies that wont manufacturer in the US but holds IP protections become subject to a permanent tariff? Giving countries a permanent 125% advantage over US businesses when using that IP?

What's the plan here?

Other countries wouldn't get a permanent 125% advantage over the U.S. They have zero involvement with the tariff because it's the importer who pays it to the U.S. Treasury when the cargo arrives in the U.S. In the case where it's a single-source, IP-protected item, the tariff is largely irrelevant to the country that produces it. People will buy it if it's a necessary item. The tariff doesn't give them a reason to adjust the price up or down or do anything different at all. They sell to their U.S. wholesale customer at the same price, that wholesale customer pays the tariff, and then the wholesale customer either passes the tariff through to the retail customer or charges multiples to maintain the same profit margin percentage.

In the absence of IP protections, it would hurt the countries with the highest tariffs on their products because there would be an incentive to produce an equivalent product domestically or source it from another country whose products are taxed at a lower rate. In practice, it still doesn't work out to impose broad tariffs because no one has a fully domestic supply chain. It really only makes sense to tariff very specific items in new-ish markets where you have a foreign player whose government is subsidizing production, e.g. Chinese EV's, Chinese EV batteries, solar panels, etc.

> People will buy it if it's a necessary item.

What do you call necessary? What about non-necessary items? What about IP that improves manufacturing efficiency by 5% in some process? Better battery tech? Better UI? Better chips? Better sensors? In some cases the answer is yes, in some cases the answer is no. If the answer is yes then the US pays 125% more for that item, if the answer is no then the US has worse efficiency, worse prices, worse technologies.

You talk in absolute which makes me feel like you're missing all the nuances at play.

It's the buyers in the other countries who get the "125%" permanent advantage, not the sellers. Sure, it doesn't affect you if you're TCL making flat-panel displays. It affects you if you're buying flat-panel displays to incorporate into your product, by making your product a lot more expensive.

Given the tariff are here to stay, the only logical solution is for the US to withdraw from international IP treaties & conventions.

I wouldn't call it logical for the US to lose all the IP protections they benefit from. But I doubt the international community would mind if suddenly American IP became free after the US withdrew itself from international trade.

> Given the tariff are here to stay

Based on what? They’re going up and down every day. And the Trump administration is clearly desperate enough for a deal with China to be caught lying about engaging in talks.

"given" as in "assuming"

> Given the tariff are here to stay

My assumption has been they're here for four years at most.

I guess then might try to buy the IP

>What's the plan here?

As far as the Trump administration goes, there doesn't seem to be a coherent plan. Among themselves they can't even decide if they were or were not already negotiating with China.

I've yet to see someone who is a part of the administration who is clearly educated about trade making an coherent argument about the tariffs.

I watched the UK/US press conference this morning. Lutnick is infuriating. Anything remotely resembling an explanation or justification for 'tariffs' devolves in to obsequeous praise of how great Trump is. It's as if they can't function for an hour or two without overtly proclaiming the wonder of Trump.

"Jamison and I working together couldn't have put this deal together in 3 years, but President Trump was able to pull this off in less than 45 days!" (paraphrasing but IIRC it was pretty close).

The administration is now Trump and yes men, there's nothing that isn't "great".

I feel like a broken record, but it makes perfect sense if you ask yourself, what would Putin want?

Putin would love the US government destroying large portions of its economy for no discernible gain. I think Putin probably encouraged Trump by telling him all the idiotic things he keeps repeating like how the trade deficit shows the US is getting ripped off. Or that huge tariffs will bring manufacturing back to the US. Or that countries would be lining up to make a deal.

But no actual sane person can explain the end game because anyone with even a basic understanding of economics and trade knows that none of those things are or were ever true.

I think the plan is to consolidate power at any cost. If people are too broke and scared to resist, it's a win for them. The claims that tariffs will help the economy or kidnapping citizens and judges will protect national security, is just a nonsense excuse.

I think this because the right wing think tanks published that Project 2025 plan and it's clearly being followed even though Trump lied and said he wasn't aware of it

> What's the plan here?

…

>Giving countries a permanent 125% advantage over US businesses when using that IP?

This makes zero sense.

If a business in France uses tech X imported from China, and a competing US business uses the same tech X imported from China but has to pay 145% more than the French company, is that not an advantage they have over the US company?

One thing I wonder is:

If you're a business used to selling at a certain price point, and the value proposition is established with your customers .... do you bother risking shattering that expectation if the future is unknown?

Do you risk customers saying "Oh crap my hobby that I did with Adafruit is now untenable ... well I'm out." vs "Well they're low on stock, I'll check back when this is all over."

I don't know if it is all or nothing but it seems like there's a lot of risk either way.

I worked with a lot of ecomm and especially crowdfunded companies that shipped to 100+ countries. Outside of the US, most consumers expect to have to pay import fees as a separate line item.

But this is new for US consumers. My hope is that US companies will add temporary price increases if they can't eat the tariffs in their existing margins and then reduce when tariffs are reduced. But my guess is that most companies will increase prices, blame the tariffs (rightfully so), but then not fully reduce prices if/when the tariffs decrease.

It's similar to what happened with tipping for takeout food during Covid. It's now a permanent tax.

> Outside of the US, most consumers expect to have to pay import fees as a separate line item.

Only if you buy from a foreign store directly which is relatively niche. It's much more common for an importer to pay the duties and then put the product in local stores.

Buying from a foreign store is not niche at all. I think it's insanely common. I think most people do it multiple times a year. Why would you think it's niche?

Part of the reason it's relatively niche is because people did it once, then didn't like the surprise customs bill that arrived. (Or they heard about this from a friend/colleague.)

That makes no difference for the price.

Well yeah. The point they're responding to was about how different stores display things in the same economic situation.

On a podcast I listened to yesterday (Marketplace, from American Public Media), they mentioned that many businesses seem to be approaching this with an "We're in this together" type of attitude. They played some audio clips of business owners on their social media channels saying things like, "Don't worry [company name] is going to do absolutely everything to fight this. We'll do everything we can to avoid raising prices on you!"

The reality, of course, which they reveal when interviewed, is that they know they're completely powerless. In the best case, all they can do is delay the inevitable and they know it. This approach exists purely to keep themselves from being made into the enemy. As you noted, some business owners admitted to considering if they should just shutter their business too.

A company can do that on a few SKUs, but not their entire catalog. Pausing your entire revenue stream for more than a very short period means laying off staff, breaking leases, ending dividends (if you give them), taking a stock price hit (if you are public) etc. It's potentially a fatal move. Better to lose some customers than fold completely.

Part of what I'm referencing is that you don't know how much "lose some customers" even is. And if you buy stock and pay the tariffs, you might have stock that almost nobody wants...

When freight rates skyrocketed due to fuel prices, freight companies added a fuel surcharge, which reflects the additional cost of moving your product. Retailers need to do the same thing with the Republican Tariffs.

It is fair, and the consumer deserves to know.

I agree, although fuel surcharge is totally expected and common in logistics land.

Consumers ... going to have to learn something new.

You charge a separate tariff charge.

Something this administration considers a 'hostile and political move'?

If you're small enough I guess you might get a way with it, if you're big enough you'll be threatened into compliance.

Either way the US customers and the rest of the world lose, everyone is a little poorer because of these tariffs.

I don't understand how they can say its hostile to list tariffs when plenty of merchants will advertise "made in America" as a selling point. It's the same thing!

The current administration considers "I don't like it" to be hostile, it's really that simple.

More to the point, if high tariffs are GOOD, we should be embracing them and the WH should be working to promote 'pride in tariffs!' messaging. Show how much you love your country and leader by how much in tariffs you pay! It'll be great, because you won't have to pay $3k income tax, just... an extra $5k in cost of living every year. Forever. Even when you stop working.

The people running the government are making bank with shitcoins so some people are winning.

You'd think these big companies would want to stand up against this nonsense. Microsoft fired their law firm who sucked up to Trump's threats.

Why doesn't Wal-Mart or whoever make a loud pronouncement that they'll fund primary campaigns against any congressperson who supports these tariffs? These companies got Citizens United passed so they can spend unlimited amounts of political money, so why don't they use this power when their business is threatened like this?

Well, there's ~1,461 days in a presidential term and only just over a hundred have gone by so far. I think companies are concerned about focused and crippling reprisal.

Because those companies rightly recognize that this administration is following no rules? Like, they were jumping on board for the fascism explicitly, businesses love fascism because it always kills labor rights. All you have to do is stay out of the ire of the dictator and you can do very well.

Like always, the morons who carry water for the fascists think they can "control" them, or radically underestimate the damage a moron with no accountability can do.

Amazon tried to barely show consumers the tariff hurt them, and Trump called Bezos directly, and that plan went away instantly.

Companies are rightly afraid of an administration that demonstrably has nobody stopping them from doing outright criminal and illegal things, and has a rabid fanbase ready to plan bombings of whoever is the target. They know the courts can't protect them. They know the law means nothing right now. They know an entire board can be murdered and the culprits pardoned if Trump feels like it.

Trump's entire shtick is that people who go against him in the Republican party already get primaried. He doesn't even need to ask his supporters, because loyalty is an expected and intrinsic part of the MAGA movement.

This is also assuming that future elections are free and fair, or at least follow previous US rules.

Because anyone making public moves against this will be punished further by the regime.

That's how autocracies work, my friend, you can't rules lawyer your way out of one, because the rules can always be changed to fuck you over some more.

Trump is willing and able to ruin any business. He doesn't respect democratic norms.

And if you're big enough and you do that, you get bullied into submission by the White House. It's really hard to look at this administration's economic policies and not wonder whether there is deliberate sabotage going on. The best case scenario is these people are woefully uninformed and incompetent. These tariffs will hurt consumers, destroy small businesses, and simultaneously have the potential to enrich the largest players in the market. This never would have happened if our population was better educated and particularly more financially literate.

Amerexit

I mean Besset, Trump's Secretary of Treasury, was on Soros' team that broke the Bank of England. According to MAGA he is literally the Soros swamp that got rich basically breaking a friendly country.

https://www.nytimes.com/2024/11/26/business/scott-bessent-wa...

I think it is a good choice to be transparent. I 100% agree with that. But I don't know that it really changes the "I'm out" dynamic or risk that they won't just show up again.

Also if there's a lot of "I'm out" you just bought a lot of stuff nobody wants to pay anything near the cost of.

Yeah, I don't know why any business with the capacity wouldn't be being explicit about this. If you're going to get hate, might as well try to point the hate in the right direction. It makes absolutely no sense to fall on that particular sword.

Yeah I would've expected that like other companies they'd buy sparingly and see what happens. That said, 42 units seems low for them, so maybe they nominally ship hundreds/thousands of that device and are doing a "magic number" trial run.

It's 42 packages with a total weight of 445kg, we don't know how many items are within each package.

Has anyone tried ordering a prototype PCB lately? Holy fuck. Prototype and small-run PCBs are effectively dead if you're in the US.

I switched to Aisler who are in Germany. They're certainly more expensive than China but still way less than quick turn options in the US. There will still be tariffs but they won't be nearly as high. There are also smaller PCB vendors in China other than the "big two" of JLCPCB and PCBWay that are willing to be a bit more flexible and not charge the max possible duty upfront via DDP incoterms.

Yep. They're insane. And there's no alternative locally.

Biggest tax hike in my lifetime.

I tried to order a few small parts off aliexpress from a seller I've used before. I knew I'd be paying a tariff but I was prepared to eat the cost. Turns out the seller just doesn't sell to the US anymore. Can't say I blame them.

Oshpark is still decent for small PCBs, since they are made in the US.

From what I’ve seen the biggest impact is just the carriers requiring a huge fee (relative to my $40 worth of PCBs) just to deal with the tariffs at all. I almost wonder if there’s a profitable side gig for someone couriering PCBs from Canada -> US, mailing them, and then flying back. A single suitcase can carry a LOT of PCBs. Obviously declaring it all still but just structured as a single import so the fees as a percentage would go down.

No assembly.

This gives me a feeling that a lot of smaller embedded players in the US are going to die...

This kill US based vendors and stores. Everyone will move to a JIT model. Shipping to US only after you buy a product.

I expect Mexico and Canadian warehouses will have a lot of business. Stocking a warehouse in USA would be insanely risky because of this upfront cost.

This will kill smaller and medium sized businesses and concentrate capital. Corporations with deep pockets must be elated. This kills their mid sized competitors.

The article points out some really important downsides of tariffs for any business but particularly small businesses:

Unlike sales taxes or income taxes they are paid up front, before the sale.

If they don't make a sale due to tariffs they still have to pay them and end up with unprofitable inventory.

Tariffs can change at any time, and order/shipping times are long, so they are very difficult to plan for. Products may have been ordered months before tariffs but end up liable.

Hm. How easy to spot chatgpt. Lazy f.

This wasn't an llm it was all me, but thanks for the insult!

sorry, my bad.

If you’re curious about how the DIY open-source hardware market for Chinese-made goods is reacting to the recent 145% tariffs, check out the eBay sales data here: eBay Sold Listings:https://www.ebay.com/sh/research?marketplace=EBAY-US&tabName...

Spoiler alert: There hasn’t been any noticeable reaction yet. You might expect to see price increases or higher order volumes when searching for items like the ESP32, but that hasn’t been the case so far.

I’d love to hear your thoughts on the potential impact of removing the de minimis threshold on shipments. It’s hard to imagine how the postal system could efficiently handle tariffs on a dozen small $1 packages from AliExpress landing in the mailbox. I suspect we’re moving beyond that point, with private companies likely clearing these shipments in bulk before they reach USPS—if they even make it that far.

> It’s hard to imagine how the postal system could efficiently handle tariffs on a dozen small $1 packages from AliExpress landing in the mailbox.

De minimis in Canada has been $20 (and sorta $40) for a loooong time. That's like US$14 these days.

Usually brokers and brokered shipments (like UPS, Fedex, DHL, etc) will charge any and every tax/duty absolutely correctly. Possibly charging you more than the cost of the item to calculate all that. And notoriously delivering the parcel and mailing you a bill 2 weeks later. Virtually every Canadian that shops online has some horror story about it.

For stuff coming by post and directly assessed by customs, they used to be sticklers and assess charges on everything worth >$20, even if it's $2.60 in taxes and a $8.95 fee for the privilege of calculating it. In the last ~15 years, they pick and choose.

They seem to ignore China stuff since it's mostly low value and have a sharp eye to spot stuff from, e.g. Japan that's probably higher value.

No idea how Aliexpress and others that use gig workers for last-mile delivery do it. Maybe they just pay the tariffs/taxes because the item value is still low once you exclude the final delivery costs from the valuation.

I’m already finding it in niche listings by way of shipping price inflation.

What was free shipping to the US is now $60 on this item: https://www.ebay.com/itm/388222776222 (a $200 shipping version at https://www.ebay.com/itm/405822192434).

Here’s a keyloading adapter for one of my radios at $600 shipping(!) - https://www.ebay.com/itm/146313261605

Absolute frustration.

”And three days later…” the tariffs have dropped. $15 shipping ahoy.

Its $10 shipping to Ireland for that keyloading adapter.

As a maker of open source hardware, I and others in the US selling my projects stocked up before the de minimis threshold was eliminated on May 2. We're not increasing our prices until those stocks run out and we have to reorder - we don't want to screw the community over.

>We're not increasing our prices until those stocks run out and we have to reorder - we don't want to screw the community over.

That's a nice thing to do, but it might be more sustainable to increase the cost some now, so that you don't have to increase it as much to cover the tariffs in the future.

But once you run out, will you screw the community over or eat the costs?

That's a very uncharitable way to put things. Since my original posts it looks like things have cooled and the worst of the tariffs have been walked back, but at the sky-high tariff rates from before today, my options would have been:

- Raise prices to account for tariffs.

- Not raise prices, therefore not make any profit, therefore not make it worth my time, therefore not make any hardware at all.

I'm not operating at big margins but I do make a profit because I want to balance supporting the community and keeping things at a sustainable level for my sanity. Those tariffs would have wiped those margins out completely.

Re de minimis I imagine suppliers instead of sending lots of $1 packages from Asia will send 1000 x $1 items to some bloke in the US who will send them on, so it will be one import transaction. And quite likely sent from somewhere near China like Vietnam to try to avoid too much tariff.

I like closing the loophole, but the overall turbulence seems to have made many sellers just turn off US sales. I had sourced an off-the-shelf part for our product, so cheap that I wouldn't mind paying 300%, but I can't see the page on AliExpress unless I change my VPN origin.

There is quite a bit of supply still on the US side from vendors preparing for this.

I found this interesting:

> Since they are electronics products/components, there’s a chance we may be able to request reclassification on some items to avoid the 125% ‘reciprocal’ tariff, but there’s no assurance that it will succeed, and even if it does, it is many, many months until we could see a refund.

I did not realize exemptions were processed as refund requests. So even if they are granted, it still kills cash flow in the meantime.

The exemption process probably was never intended to be used in a dynamic / high tariff situation. And to avoid fraud you don't want to just let them off the hook for taxes up front and have them vanish...

Social media is filled with people who are in disbelief when they get UPS or DHL invoices for tariffs. It's hard to watch people who really believed the "China will pay the tariffs" trope start to wake up to reality.

Interesting if we could equate the user pain to sending a bill to the GOP for the new taxes?

That'd solve this problem.

Though there is no practical logic to that, it would be a politically logical tactic.

I know some desperate system design (big picture, not networking) people who are freaking out now because the parts for their designs are going to increase for some 2 fold, essentially killing their projects if something doesn't change. Years of work and coding going down the shitter because of one man's pride and a fearful do-nothing Congress that refuses to do their first and most important duty, to protect the Constitution from tyranny

Finally americans will experience expensive electronics. I guess nobody in US realize how much more expensive is electronics for people in EU. Every electronics is more expensive by hundreds of EUR and with added bonus, the price is same for every country in EU, which in turn means when you live in EU country where median salary is 5x lower than US, you will have great time buying electronics, steam games, etc.

The most expensive electronics the typical American experiences is often their phone, and I think this won't matter too much, because I believe a majority of people basically get them on an installment plan from their cellular carrier. They'll own the phone in 4 years instead of 2, but they probably would have upgraded to a new phone in 2 years and would have been paying the $200/mo. anyway.

Timing is good for phone makers here honestly because phone innovation is slowing down so high prices for the same stuff can be blamed on tarriffs instead of lack of innovation.

The second most expensive electronics would be game systems, and that'll be painful, but I do wonder if e.g. Nintendo would pair with cellular companies and do installment plans like phones, and/or if PS/Xbox would try to do something similar with ISPs (e.g. AT&T Gamer Deal) or rent their consoles instead of selling them.

Gamer PCs are gonna take a serious hit though, and the price of individual games is certain to increase.

I hope they list out the tarrif costs explicitly at online checkout time

Amazon discussed this internally apparently, and when the White House found out they called it a "hostile act"

Oooo. Then we MUST ask for this from Amazon.

As someone living in Europe, I thank my lucky stars that board designs from the likes of Adafruit/Sparkfun are almost all open source hardware.

Historically, because I could throw one or two random ones into my aliexpress cart to hit a minimum order value for free shipping, but now it means I'll actually be able to get my hands on them without one or two sets of tariffs on top. If I could even get them at all otherwise.

170% tariff? What was the extra 25% for? EDIT: Ok I found it. Section 301 tariffs from 2018 on electronics adds 25% to the 145%.

I have been sharing this to try to raise awareness, the impact is going to be high!

Companies are really struggling to optimise their suppliers, it is pretty hard. If they start on bill of materials they can often sort by most common parts and then it becomes a graph problem finding “cheapest” paths between often traversing four tables bom <> parts <> suppliers <> tariffs.

The really hard part is mapping parts down to sku level to tariff codes. Specially at scale (think datasets with many million rows).

Either way we built https://www.searchtariff.com/?q=lights as an entry point and and have been getting more and more worried with the market as we help companies out. They are not ready for this at all and it is bitting deep. Let us know if you also need help mapping products to tariffs, we have a product for that!

Alternatively we also welcome feedback!

We should all stop buying everything till this blows over.

Even if it only caused a 20% drop in spending, a lot of powerful people would take notice.

In capitalism you vote with your wallet. If we continue buying stuff like nothing has happened, whatever happened must be fine. It’s not fine and the quickest and cleanest way to say that is to simply stop.

No new cars, no new appliances. No new anything. Don’t buy any foreign goods, go on a spending diet. If you absolutely must, buy used and buy local.

If some policy brings the economy to a screeching halt smart money pays attention real fast.

That’s intense and probably Made in USA products when they become available will cost adjacent the same.

If (big if) income taxes are significantly reduced (eliminated for tax brackets at $200k or less, and graduated meaningfully above $200k), then the tariffs will be palatable, while giving investors and industry the time to rebuild. The rebuild will not be possible without intensive deregulation and upheaval of some entrenched regulatory institutions. It is hard to believe that any of what I have listed is possible, but in my lifetime I have seen this country do all kinds of wacky things.

Unlikely: https://taxfoundation.org/blog/trump-tariffs-tax-cuts/

And where is this money going? Is it going to be used to directly help companies like Adafruit which are being directly harmed?

Going directly in to the Treasury.

https://fiscaldata.treasury.gov/static-data/published-report...

$252 million was collected from excise tariffs on May 6. You can look at this PDF day to day.

EDIT: adding on to this... most days are between $150m and $300m. There's been a few days north of $300m this calendar year. There was also one day - April 16? 17th? - with $11.5b coming in. Under 'excise taxes'. I have to assume that was something to do with early April tariff announcements? But haven't seen anything remotely similar since.

So this "billions of dollars are pouring in from tariffs!" is... simply not true. There's not been a huge shift one way or the other yet.

EDIT 2 - April 22 - https://fiscaldata.treasury.gov/static-data/published-report.... $11b in excise taxes deposited.

And used to shore up the budget with the upcoming tax breaks for the wealthy...

A bunch of it will go to bail out US farmers who would otherwise be wiped out.

I just can't see how companies such as Adafruit and Sparkfun are going to stay in business at this point. A lot of small businesses are going to get legit killed because of this stupid and avoidable trade war.

Perhaps it's by design if you read a chapter on Project 2025 on killing small businesses.

Winning so hard right now.

I'm in a similar boat. Does anyone know any US PCB assemblers similar to PCBWay or JLCPCB? (e.g. small volume) I couldn't find any when i looked about a year ago

We work with a few, but they just do assembly, you bring the parts and PCBs.

They are also insanely expensive if you are used to China prices. Boards with 10-15 components being $100+ each. Couple that with a domestic PCB manufacturing which is ~10x the cost of China, you are looking at something like an Arduino costing $250.

OK, can you name one you've used/been happy with?

I don't know where you are located, but if you just search google maps for "electronics assembly" you can find places to call. You really want something nearby because it is pretty much the only upside that you can go and talk to them while going over the board and you don't have to hassle with shipping. You can also go inspect the first few boards done before they do the whole run.

I used OSH PARK ~ 10-12 years ago - it looks like they're still around and somewhat affordable, but that was just a 20 second scan of their homepage. They used to be the affordable choice back in the day.

https://oshpark.com

No assembly.

They don't exist. I had hope DigiKey would be the one, but it is not. (You need vertical integration with a parts library to pull this off)

OSHPark is US-based and they have excellent service.

They don't do assembly, do they?

They are expensive for larger boards however.

Great if you only need a few square inches.

About 7 years ago I had around 150 PCB's for a research smartwatch made and assembled at this company in Massachusetts:

https://www.emeraldtechnologies.com

If I remember correctly they were just over $200 per smartwatch. We saved some costs by putting the assembled boards into 3D printed cases ourselves using student labor:

https://amulet-project.org/2018/08/02/assmebly-of-new-amulet...

There's a list of the major components (MCU, BT radio, sensors, display, battery) here:

https://github.com/AmuletGroup/amulet-project/tree/master/ha...

Not including the student labor (or my labor) I think the total we spent per smartwatch ended up being about $300.

To get an idea of the complexity of the boards here's the open source Github repo with the hardware and software files:

https://github.com/AmuletGroup/amulet-project

It was a double sided, 4 layer board with two small sub-PCB's (touch pads and a power board I think). My experience with Emerald Technologies (then called DataEd at their New Hampshire location, seems they've been bought out by a larger firm) was very positive. They were quite helpful in bringing the project to completion.

https://circuitsassembly.com/ca/editorial/menu-news/33794-da...

The cost per board would have been less if we had ordered more of them. Ours was a fairly large job for DataEd at the time, though they would have been happy to make a thousand of the devices. For tens of thousands or more they would have recommended another affiliated company. They were more of a prototyping company, though that may have changed since the merger. I see that part of Emerald is located in China now, though the DataEd facility is still part of the company, so they might be interested in some US work to carry them through the tariff chaos.

Edit: I should mention, I supplied some of the parts that I prebought to lock in a supply, the MSP430's and touch sensor IC's for example, and they supplied the rest. We had them do minimal QA on the boards, without firmware loaded and we did final QA after programming the boards ourselves. They would have been willing to do those tasks also though.

Uh yea they are real and will have an impact. Who didn't think that? People who banned books maybe? That's pretty wild. Appreciate articles like this though because they can maybe help someone out there. If everyone doesn't talk about it then some people will continue believing all sorts of weird stuff.

I recently got hit with $700 of tariffs on electronics, just as a consumer. It's definitely real and very annoying -- and as a consumer, visibility into it is extremely low, which makes it even worse.

Long story incoming (blog post candidate? Hmm...)

Pimoroni is a fantastic supplier of hobby electronics stuff -- they're like Adafruit, but in the UK. Adafruit actually sells a fair amount of their stuff, but not everything. So I occasionally order directly from them (often adding in some items that are frequently out of stock at Adafruit, such as Pi 5 chargers).

I placed a big order right after the first tariffs were announced but before they went into effect. Pimoroni was having a big sale at the time, so I loaded up, thinking it'd be the last pre-tariff order I made. I elected to pay extra (not much) for UPS, since I generally trust them the most out of the shipping carriers who deliver to me (in Southern NH, right by the freight hub of MHT).

After my package arrived from overseas, it was "stuck" in a warehouse in a port city for several days. The UPS website claimed "your package is being cleared, but we have all the info we need so just sit tight"... After a few days of this, I tried calling up. After fighting with the phone tree robot (one of the few for which swearing didn't seem to get me a human, strangely), the front-line support finally told me that it was actually held up in customs awaiting more information. The support rep just told me to send an invoice and hung up.

That was the first strange flag -- sellers always include invoices on their packages, so why do they need me to send one? I hunted around for a more effective phone number -- a difficult task -- and eventually found the UPS small business customs office line (had to involve ChatGPT to help find the number, Google being useless now). After calling up, I was redirected a few times and finally got ahold of someone who actually was able to investigate for me. He found out that it was being held because US customs had classified some items (incorrectly) as needing additional forms (more on that below), and that I also would have to pay serious tariffs but only after the additional forms were filed.

The helpful UPS guy (who, it turns out, doesn't even work in that department, but had been pulled in to help because the tariff changes were causing a lot of strife) was able to link me to a website with more information and a place to upload forms and track info. The forms needed were: a vehicle import form -- apparently the US government thinks any pump being imported must be a vehicle part, even a tiny fountain pump for plant watering -- and a pesticide import form -- apparently RGB LED matrices are considered pesticides, because they seem similar to UV lamps I guess... And there was no way to reclassify the items (not sure if that's because I'm just a lowly consumer or what).

I sent this stuff over to Pimoroni, and the folks there were equally confused. But they eventually figured out how to fill out the forms and sent them back, and I uploaded them. UPS sent them along and satisfied the government, and my package was released to UPS. But by this time, the tariffs were in effect. And even though I had ordered from the UK, most of the electronics had been manufactured in China, and some contained steel made in Mexico, so the tariffs apparently applied.

On top of the tariffs, UPS was going to charge me excessive warehousing fees for the package being held up! Fortunately, my helpful UPS contact was able to get approval to get those reversed, since I was never informed that the package needed more info.

However, the story doesn't end here! The package was finally sent on its way and my friendly UPS driver showed up at my door with it a few days later, along with the bill. Unfortunately, it was the full bill including the warehousing fees! I had to call up a different UPS line (invoicing) and have them make sure the warehousing fees were taken off, then specifically have them call the local UPS distribution center to have them update it. This happened, and the next day the driver showed up...with the same bill.

Turns out UPS systems are poorly set up. The driver called up the distribution center and verbally confirmed the updated price, but his device would NOT accept anything other than the full amount listed, with no overrides possible. We worked it out, though: I gave him a check for the correct amount, and he gave me the package but did not mark it delivered. He returned to the distribution center, and from there they must have figured out how to override it, because finally it was marked as paid and delivered and everything was solved.

So I got my electronics. But the cost was $700 in tariffs due to manufacturing country (not even final manufacturing country, nor shipper country) and including vehicle and pesticide taxes for items that were not vehicles or pesticides. On a $1900 order. Plus nearly a month of time and countless hours wasted on the phone.

Suffice to say the next time I went looking for a part and saw that it was shipping from outside the US, I didn't buy it. So, intended effect of the tariffs, I guess? Though I couldn't just order from the US instead, because it wasn't available, so I just didn't order anything. Hooray.

It was shocking to see just how little information pretty much everyone had in this process (myself included), the complete lack of ability to correct blatant errors, and the "delay and rack up more $" strategies that seemed to be occurring.

Wrt the post here: I'm sad to see Adafruit get hit by this bill, and I'm sure their prices are going to go up as a result, but I'm definitely going to continue purchasing from them, and I hope they continue to stock items from elsewhere (including Pimoroni). And I hope to one day feel comfortable ordering directly from Pimoroni again...

@nja - this is a very good overview, i made a chart, is this somewhat a way to look at the "process" ? https://cdn-blog.adafruit.com/uploads/2025/05/tariff_process...

will check back here later & we are pt at adafruit dot com & limor at adafruit dot com ...

@ptorrone yup that about sums up what I experienced!

> products we couldn’t manufacture ourselves even if we wanted to, since the vendor has well-deserved IP protections

Tariffs are working as intended: if somebody can manufacture similar things here they will be in advantage.

This isn’t an endorsement of tariffs, just an observation: their goal is to give domestic manufacturers an edge when similar goods can be made locally. In that sense, they’re functioning exactly as intended.

It would make a lot more sense to boil the frog over a long period of time with steady, scheduled increases in tariffs instead of pouring scalding water on everyone's heads all at once. Even with plenty of capital and willpower and know how, it takes plenty of time for industry to be built out. Under ideal conditions, even, these tariffs are harmful (and we don't have ideal conditions).

It is if it’s part of a strategy. The oafish nature of this expression of one man and his whack pack of losers surrounding him is beyond that.

I’m doing what most people who can are - freezing capital spend, unwinding positions and contracts that will be hit and planning for the inevitable crash in the fall. The companies that rely on advertising for revenue are going to be purging workforce — there nothing to sell.

Ironically the idiots rallying for the clown will be hardest hit when the farms loans are due and the cotton and soybeans are rotting in the fields.

They will be bailed out at everyone else's expense like they were in his first term.

> if somebody can manufacture similar things here they will be in advantage.

They can't and it's not worth the multi-year effort to start up a factory to do so. That's why these tariffs are so dumb, they aren't protecting US manufacturers, they are just hurting consumers needlessly.

Even for things that are manufactured in the US, the products they make are still going to be more expensive than untariffed goods manufactured in China. The point of tariffs is that manufacturing is cheaper in other countries and so domestic manufacturers can't compete on price, so the tariffs add onto foreign prices until they're above domestic manufacturing prices. So even if magically there was a factory in the US tomorrow for every product manufactured in China, prices would still be higher with the tariffs than without

Companies aren't going to invest 4+ years to get a supply-chain setup in the US when they can just wait for the next administration to roll these back. It's just needless economic turbulence.

> if somebody can manufacture similar things here

Gotta pay tariffs on the machines to manufacture the stuff first.

And the raw materials. Oh I guess just start a mining operation, and a refining operation, and...

Yeah and then all we'll have to do is build a multi-dimensional teleporter so that we can go to an alternate timeline where the US has all minerals it needs in it's earth.

So just a few steps and we'll be good.

Your statement there implies that the intention is related to such a price point.

I suspect that's wrong, and that they didn't even try to calculate those price points, which will vary per kind of good, not per country. If the per-country tariffs happen to match those unknown numbers they didn't even try to calculate, that can't be due to intention, it can only be dumb luck.

There are no domestic manufacturers for the majority of things tariffed.

And for things that can not be manufactured or grown here... we just suck it up and pay the extra 10-20-30% anyway?

If the 'intent' was to spur manufacturing, you'd enact laws with long term financial stability planned in. Few are going to commit to spending millions equipping factories when the 'tariff moat' that might make those factories sustainable will go away if Trump sees a movie in six weeks that says tariffs are bad.

The 'intent' seems to be to create financial instability and chaos, to allow Trump to position himself as the financial savior, and we are concentrating huge amounts of economic power in the hands of a single person.

Especially when the legal basis these tarriffs are based on is a sham of

They are temporary emergency powers with a limited timeframe. The emergency is fake, Congress has declared the calendar is suspended for purposes of the clock running on these temporary "emergency" powers.

The tariff could disappear any day if Congress grows even the flimsiest spine.

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