Consumer solutions in the event of a trade war?
March 2, 2018 11:27 AM
How does the average person deal with it on a micro level, if the president has a unilateral ability to institute tariffs on foreign commodities?
I understand that a result of this will be the rise and fall of certain industry practices and trajectories that will impact employment, but my question is regarding the rise in prices for consumer goods that will accompany this. Is the average person merely a hostage, or is there something they can do in the meantime, while political action is taking place?
I understand that a result of this will be the rise and fall of certain industry practices and trajectories that will impact employment, but my question is regarding the rise in prices for consumer goods that will accompany this. Is the average person merely a hostage, or is there something they can do in the meantime, while political action is taking place?
If you know you'll soon be in the market for particular classes of consumer goods which may be affected, and you have the budgetary flexibility, you can plan to make your purchases in advance of the tariffs. With the recent tariffs instituted on washing machines, trade experts explicitly advised consumers to do this. Otherwise, that's about all one can do, apart from the typical organise-politically/eventually-vote-the-bums-out strategies.
posted by halation at 11:48 AM on March 2, 2018
posted by halation at 11:48 AM on March 2, 2018
Individual tariffs you can buy around and stock up. An actual trade-war (in this case with China) there isn't much you could do to insulate yourself.
By the time your buying something at retail it's passed through a lot of hands who have likely raised their prices across the board to compensate.
My company for example who designs things here, makes things overseas, imports them and sells them to big box stores and retailers, we would raise all our prices not just on China built lines to compensate. Because if we only raised them on the China lines, we might lose those lines in retail and lose swathes of our business. Our customers (your retailers) would then raise their prices across the board.
Also no amount of tariffs would ever push our manufacturing to the US because the infrastructure to manufacture in the US has been gone for decades. It's not a matter of price, it's a matter of capacity and quality.
These are but a few of many reasons a trade war is a terrible idea.
posted by French Fry at 12:36 PM on March 2, 2018
By the time your buying something at retail it's passed through a lot of hands who have likely raised their prices across the board to compensate.
My company for example who designs things here, makes things overseas, imports them and sells them to big box stores and retailers, we would raise all our prices not just on China built lines to compensate. Because if we only raised them on the China lines, we might lose those lines in retail and lose swathes of our business. Our customers (your retailers) would then raise their prices across the board.
Also no amount of tariffs would ever push our manufacturing to the US because the infrastructure to manufacture in the US has been gone for decades. It's not a matter of price, it's a matter of capacity and quality.
These are but a few of many reasons a trade war is a terrible idea.
posted by French Fry at 12:36 PM on March 2, 2018
If it's possible for the goods you're buying, you can buy used. To use the washing machine example, you could buy a washing machine off Craigslist or Facebook Marketplace instead of from Sears or wherever. Not possible in all cases, obviously, and the price of new goods might affect the price of used goods, but otherwise yeah, you're a hostage.
posted by kevinbelt at 12:46 PM on March 2, 2018
posted by kevinbelt at 12:46 PM on March 2, 2018
If there is general inflation then buying non-perishable goods is an old '70's trick. One perhaps apocryphal story that made the rounds was about a man who packed his attic with paper towels and toilet paper and saved hundreds of dollars over several years and claimed to have done better than the stock market. If only certain goods become more expensive and you think you will need them then buy in advance. Or decide you don't really need them.
posted by Botanizer at 1:02 PM on March 2, 2018
posted by Botanizer at 1:02 PM on March 2, 2018
If you have savings, particularly if you’re putting money away for future purchase of a washing machine or car or whatever else, you could hold it in an inflation-protected instrument - TIPS or IBonds. Then the money will grow in proportion to the increase in cost of living that would result from tariffs or quotas.
posted by exutima at 4:05 AM on March 3, 2018
posted by exutima at 4:05 AM on March 3, 2018
This thread is closed to new comments.
posted by GCU Sweet and Full of Grace at 11:45 AM on March 2, 2018