Tariffs

[Altair8800]

What just about nobody mentions is that because of the blotched trade formula they presented is that what they really want (in the end) is to go back (in effect) to a pseudo barter type system.

That is, USA will only trade with you xx billions of goods if you purchase (pretty much) the same amount of goods from the USA.

[PlainName]

Doubt it. The EU offered 0% for 0% back in March, and again when the latest fun started. Still got hit with 20% because Trump has to have the bigger number, whatever it represents.

[Ranayna]

Doubt it. The EU offered 0% for 0% back in March, and again when the latest fun started. Still got hit with 20% because Trump has to have the bigger number, whatever it represents.

In german media, it was claimed that the US wants the EU to buy more "Energy" (i think in the form of LNG) from them.
But that is cheaper available elsewhere, so there is (or rather was) little economic incentive to buy specifically from the US.

Then there is the thing with the clorinated chicken, that the US dearly would like to sell to the EU, but we do not want it.

I think that these are issues that are amongs those that the tariffs are intended to adress. With little success so far.

[tggzzz]

Doubt it. The EU offered 0% for 0% back in March, and again when the latest fun started. Still got hit with 20% because Trump has to have the bigger number, whatever it represents.

More or less. In Trump's weltanschauung winning requires somebody else losing. He cannot comprehend "zero sum" and "win win".

In the long term the US will lose more than it gains. Trump won't be around to care, and his current acolytes won't care losing, provided they think someone they hate is losing more.

Overall the tariffs are only a small part of the problem, and are only the visible manifestation of underlying problems of inequality.

[MK14]

Because of the tariffs.

How long is it likely to take, for it to filter through, to the street prices, of many things.  That are affected by the tariffs?

There seems to be some mention of a 90 day, delay before some kick in.  But I haven't really kept up with the finer details.  Since I don't live there.

Because, if/when the prices, go up a lot, because of the tariffs.

That could be when, the current administration's, popularity diminishes.

E.g. China and 254% tariffs.  Would surely affect the prices of such items (on the street, i.e. in shops and when paying some bills), by a large and very noticeable amount?

[Marco]

Doubt it. The EU offered 0% for 0% back in March, and again when the latest fun started. Still got hit with 20% because Trump has to have the bigger number, whatever it represents.

Germany has always been semi-mercantile, not as much as the Asian tigers, Japan and China ... but still.

The only way to get balanced trade in a mercantile trade situation is to be either exactly as developed AND repressive/mercantile AND resource rich as your trading partner ... or to force it through tariffs/import-certificates. I've said it before, but good old Keynes wanted to force trade balance too with Bancor. The thought that trade balance is best for world economic development is very old and likely accurate ... even if Trump shares it

[tggzzz]

Just got this email from DHL:

I wonder if this email is Australia specific. For example, it's not clear if shipment from China of less than $800 require formal processing.

Yes, it came from the Australian comms group.

Unsurprisingly, it is apparently wider than just Australia->US

https://www.bbc.com/news/articles/c1jx9ep5l63o

...
DHL Express is suspending deliveries to the US worth more than $800 (£603) because of a "significant increase" in red tape at customs following the intruduction of Donald Trump's new tariff regime.

The delivery giant said it will temporarily stop shipments from companies in all countries to American consumers on Monday "until further notice".

It added that business-to-business shipments will still go ahead, "though they may also face delays".
...

[Marco]

In Trump's weltanschauung winning requires somebody else losing. He cannot comprehend "zero sum" and "win win".

Pooh clearly agrees with him, decades of internal wage repression clearly shows a belief that the world is partly a zero sum game where if you take the production, you can keep it down the line and prevent its re-occurrence with your geopolitical adversaries ... which is entirely accurate, because mercantilism works, if your adversary is stupid enough to let it work.

[tautech]

Because of the tariffs.

How long is it likely to take, for it to filter through, to the street prices, of many things.  That are affected by the tariffs?

There seems to be some mention of a 90 day, delay before some kick in.  But I haven't really kept up with the finer details.  Since I don't live there.

Because, if/when the prices, go up a lot, because of the tariffs.

That could be when, the current administration's, popularity diminishes.

E.g. China and 254% tariffs.  Would surely affect the prices of such items (on the street, i.e. in shops and when paying some bills), by a large and very noticeable amount?

Pricing in the short term will remain stable until tariff percentages have finally been set in concrete then importers and retailers will immediately bump up pricing to cover their increased outlay for new stock.....providing the marketplace will withstand increased pricing.

To say the cat has been thrown among the pigeons is a gross understatement.

[Altair8800]

=====SHORT VERSION=====
With USA imports there is an exception/loophole called "de minimus" which after the implementation of The Tariff Act of 1930 (Smoot-Hawley Tariff) the USA customs agents realize that it would be too difficult to put/imply tariffs on everything that comes through customs so they took it upon themselves to just say anything under $1 they would not bother with.  Assume at some time this became official policy (or law).  This minimum got increased over the years to eventually be $800.  Believe this is to match what an American can bring back undeclared (tax/tariff free) through customs... 

On 2 May 2025 this De Minimus will end for China and Hong Kong (Only?).
=====SHORT VERSION=====


=====Long Version=====
The de minimis 800 limit is a U.S.customs provision that allows shipments valued at $800 or less (per person, per day) to enter the United States duty-free and with minimal customs procedures. This rule is codified under Section 321 of the Tariff Act of 1930 and has played a significant role in facilitating international e-commerce and small-scale cross-border trade 127.

History of the De Minimis Threshold
1930 (Origins)

The Tariff Act of 1930 (Smoot-Hawley Tariff) initially did not include a formal de minimis exemption, but customs officials informally waived duties on very low-value shipments to avoid excessive administrative costs 10.

1938 (First Formal Threshold: $1)

Congress amended the Tariff Act to establish a $1 threshold for duty-free imports, recognizing that collecting small tariffs was inefficient 10.

1978 (Increased to $5)

The threshold was raised to $5, though this was still very low compared to inflation 10.

1993 (NAFTA & $200 Threshold)

As part of the North American Free Trade Agreement (NAFTA), Congress increased the de minimis limit to $200, significantly expanding duty-free trade 210.

2016 (Major Increase to $800)

Under the Trade Facilitation and Trade Enforcement Act of 2015, signed by President Obama, the threshold was raised to $800, effective March 10, 2016. This change aimed to align the treatment of imported goods with duty-free allowances for travelers returning to the U.S. 1710.

2025 (Restrictions on China & Hong Kong)

In 2025, President T---- issued an executive order ending de minimis benefits for shipments from China and Hong Kong, effective May 2, 2025, citing concerns over illicit drugs and unfair trade advantages 4812.

New tariffs (120% duty or a 100
–
100–200 per-item fee) now apply to Chinese imports under $800 912.

=====Long Version=====

[MK14]

Let me try and explain, in 'electronics' terms, why these tariffs, don't seem like a good idea.

Consider electronic parts, such as resistors.

Here is one example:
https://www.lcsc.com/product-detail/Chip-Resistor-Surface-Mount_YAGEO-RC0603FR-07100RL_C105588.html?s_z=n_resistors

A cheap, 100 Ohm 1%, 0603 resistor.  They may have cheaper ones, it just came up in the first page of results.

Price for 10 reels, 50,000 = $ 0.0005 each (even the x100 price is only $ 0.001).

So, TWENTY! per cent (penny), from China.

If my Gizmo, that I make (hypothetically speaking), in the US, sells for $10,000 each, and is marketed world-wide, including China.

It makes great economic sense, to worry (in economics) terms, in these $10,000 widgets, and the $10,000 per sale they bring in, both selling it to US clients and clients around the world.

But these $ 0.0005 0603 resistors, DON'T need to come from, or be made in the US.  Forcing that to happen, when they can be bought for just $ 0.0005, is just not worth it.

I.e. America should be concerned with producing high value items, such as cars, computers, graphics cards and so on.  Which can bring in hundreds or even tens of thousands of dollars per sale.

Whereas petty $ 0.0005 0603 resistors, would be extremely difficult (I think), to economically make in America.

Yes you could make them, but at $ 0.0005 each, and still make a decent profit.  Being able to pay the (probably) much higher over-heads in America, not (polluting) turning the rivers green and paying the workers, decent (western) salaries.

I could be wrong, but I think just renting the space needed to make those resistors, in America, could be way over the $ 0.0005 per resistor.  Unless you can sell them at crazy high volumes.

[dietert1]

I think the idea is that high tariffs may eventually result in "working more" while "eating less", thus healing the US deficit economy. Nobody knows whether that will work. It might as well result in a complete breakdown of US economy. When large companies try to resolve problems by down-scaling, sometimes it works, sometimes it doesn't and the enterprise vanishes in the end.
Of course the US administration won't talk about the risks and the coming hardships. Yesterday our media had an image of the US cabinet praying together in the White House: "Now everybody catholic".

Regards, Dieter

[tggzzz]

In Trump's weltanschauung winning requires somebody else losing. He cannot comprehend "zero sum" and "win win".

Pooh clearly agrees with him, decades of internal wage repression clearly shows a belief that the world is partly a zero sum game where if you take the production, you can keep it down the line and prevent its re-occurrence with your geopolitical adversaries ... which is entirely accurate, because mercantilism works, if your adversary is stupid enough to let it work.

The key word there is "partly".

Yes, of course there are many zero sum games that can be played.

But they are neither the only game nor necessary.

[Psi]

I think the idea is that high tariffs may eventually result in "working more" while "eating less", thus healing the US deficit economy. Nobody knows whether that will work. It might as well result in a complete breakdown of US economy.

Pretty sure AI + humanoid robots are going to have a bigger long term impact than the tariffs.

[PlainName]

The thought that trade balance is best for world economic development is very old and likely accurate ... even if Trump shares it

I imagine even that is quite a bit more complicated than the simplistic comparison that Trump performs. For instance, suppose country A imports a lot of steel from country B and sends back hardly anything. According to Trump there is a biggly deficit and B should have tariffs applied, but now also suppose that A sells a lot of cars to C and buys practically nothing from them. Meanwhile, B and C have some decent trade ongoing, and overall the trade from A to C nicely balances the trade from A to B (with C being the behind-the-scenes conduit).

[Psi]

Yeah, sometimes people fail to notice that for every decision there are 4 outcomes, not 2.
There's
 Good decision leading to good outcome
 Good decision leading to bad outcome
 Bad decision leading to good outcome
 Bad decision leading to bad outcome

[wilfred]

E.g. China and 254% tariffs.  Would surely affect the prices of such items (on the street, i.e. in shops and when paying some bills), by a large and very noticeable amount?

Smaller businesses will need to have sufficient cash on hand or be able to borrow to pay the tariff. If they cannot then they will not get the goods to sell at all. And even if they can pay the tariff they will have to be confident they can sell the goods. These over 100% tariff rates are very likely to stop demand in its tracks for all but the most desperately needed items like spare parts.

I think supply from China will virtually dry up in the short term. There is still the on again - off again uncertainty and who would want to pay the tariff quickly when waiting may get a reprieve.

[Marco]

I imagine even that is quite a bit more complicated than the simplistic comparison that Trump performs. For instance, suppose country A imports a lot of steel from country B and sends back hardly anything. According to Trump there is a biggly deficit and B should have tariffs applied, but now also suppose that A sells a lot of cars to C and buys practically nothing from them. Meanwhile, B and C have some decent trade ongoing, and overall the trade from A to C nicely balances the trade from A to B (with C being the behind-the-scenes conduit).

The Bancor would force trade balance in aggregate, this is not possible with tariffs with strict country of origin accounting. Trump wants tariffs though, so he can get government income from them too in the short term.

Most tariffs are punative to a specific country so they are married to country of origin, but you could separate punative from balance tariffs. Without country of origin accounting, trade flows could simply flow around a bit (even just on paper) to get trade balance in aggregate.

[wilfred]

What just about nobody mentions is that because of the blotched trade formula they presented is that what they really want (in the end) is to go back (in effect) to a pseudo barter type system.

That is, USA will only trade with you xx billions of goods if you purchase (pretty much) the same amount of goods from the USA.

Well that was a stupid idea that they won't speak of again. Or there will be no Vanilla beans from Madagascar for up-market ice-cream. And no fake vanilla flavour from China either, to substitute.

What America needs to do is buy less stuff and try to avoid a debt spiral getting out of hand.

[Marco]

What America needs to do is buy less stuff and try to avoid a debt spiral getting out of hand.

Easier said than done with mercantilist trading partners, even if the government ran no trade deficits, foreign nations could buy US shares and land to park dollars while surpressing their currency/wages and get a trade surplus.

Any measures to force trade balance in the face of mercantilism will be very invasive, even if you don't implement them overnight.

[tautech]

...................
Most tariffs are punative to a specific country so they are married to country of origin, but you could separate punative from balance tariffs. Without country of origin accounting, trade flows could simply flow around a bit (even just on paper) to get trade balance in aggregate.

That's not the reason for tariffs in NZ at all, instead when we had high tariffs (25% or more) it was to protect local industry/production for them to remain viable against overseas imports.

In my game the import NZ Customs code determines NZ import tariff for test and measurement equipment is 0% as it should be as there is no local industry to protect.

[TimFox]

My reaction to “zero-sum” games is that they are not moral.
Co-operation between parties should lead to better outcomes (higher production, better incomes, etc.) than isolated individual efforts.

[tggzzz]

My reaction to “zero-sum” games is that they are not moral.
Co-operation between parties should lead to better outcomes (higher production, better incomes, etc.) than isolated individual efforts.

Yes, but...

I don't think zero sum games are immoral, per se. (Strictly speaking, some games are inherently zero sum, of course.)

I do think adopting a zero sum strategy is often unnecessary and is often beneficial. If zero sum tactics are chosen unnecessarily, then that is stupid and reprehensible. If the other party loses significantly, then that is not moral.

If negative sum tactics are used (i.e. I don't care if I lose so long as you lose more), then that is wrong and immoral.

[iMo]

fyi: RISC-V and tariffs:

[tautech]

My reaction to “zero-sum” games is that they are not moral.
Co-operation between parties should lead to better outcomes (higher production, better incomes, etc.) than isolated individual efforts.

100%
If we go back 200 yrs the Opium wars started due to unbalanced trade however China is now quite westernised and their middle classes comfortable. Trade with the west did this, nothing else !

A few days there last August was an eye opener especially at our last supper as guests of Siglent.
At a top class Chinese restaurant a leg of lamb appeared to feast on, something that we could never expect amongst all the also yummy Chinese food.

NZ has a trade imbalance too but they are buying our produce......1B+ people is a massive market to tap.
Sorta implies the US exporters and Gubbermint Trade officials have been sitting on their hands or just plain AWOL.