Are you buying now because you anticipate higher prices?

[pablolie]

It's nice that you have your own definition. It's good to see independent thinking!

When the U.S. Government calculates GDP, imports are subtracted from GDP and exports are added. You may disagree with how the government calculates GDP, but this is how it is done.

This effect in obvious in the two most recently reported GDP numbers. The GDP in the 1st quarter of 2025 had a negative change due to front running of imports, and thus a large subtraction from GDP, to beat tariffs. The 2nd quarter of 2025 that was just reported, showed a +3.0% change in GDP due to greatly reduced imports. This effect was widely reported.

Copied from https://www.bea.gov/news/blog/2025-06-03/expenditures-approach-measuring-gdp:

".. Gross domestic product, the total value of goods and services produced within the United States minus the value of goods and services, or inputs, used in production, can be measured three different ways: 1) expenditures approach, 2) income approach, and 3) production approach.

The most well-known method for computing GDP is the expenditures approach, the sum of all domestically produced goods and services sold to final users1. This approach uses the formula found in economic textbooks “C+I+G+X-M” to calculate GDP:

• C is the value of goods and services sold to people.
• I is the value of business investment.
• G is the value of goods and services sold to the government.
• X is the value of goods and services the United States exported, or sold, abroad.
• M is the value of goods and services the United States imported, or purchased, from abroad. ‘M’ is subtracted from the sum of C, I, G, and X to ensure that GDP measures only the value of domestically produced goods and services. .."

So yes, my definition was clumsy. But when I said "*If* the imported goods are replaced by local production, then they add to the GDP." it was a correct statement, I think. If a market completely disappears because products are for some reason shunned by the public, it would be counter-intuitive to see it as an addition to the GDP.

 

[Noske]

@pablolie I personally think that it is dangerous when people make up their own definitions when the accepted definition is logical, well known and understood.

Go try it in an electrical engineering thread and watch what happens.

Edit - oh, now I see that you have posted the correct definition. Saved. But your intuition on the last sentence is still incorrect.

Think of it as an identity rather than an equation. About as close to accounting as economics would ever dare to touch..

 

[pablolie]

@pablolie I personally think that it is dangerous when people make up their own definitions when the accepted definition is logical, well known and understood.

Go try it in an electrical engineering thread and watch what happens.

Edit - oh, now I see that you have posted the correct definition. Saved.

In no way is claiming "the monetary value of final goods and services - that is, those that are bought by the final user - produced in a country in a given period of time" wrong, sorry. It is just short and simplified.

But to the point, here's the AI answer to "Do Imports impact the GDP":

[AI]: "..

• No, imports do not directly impact GDP in the long run, although they are subtracted in the GDP calculation. While imports are included in the components of GDP (like consumption, investment, and government spending), they are then subtracted out to avoid counting foreign production as part of the nation's domestic output.
  
  Here's why:
  • GDP measures domestic production:
    GDP, by definition, is the total value of goods and services produced within a country's borders.
    
    
  • Imports are foreign production:
    When a country imports goods and services, those are produced elsewhere, not domestically.
    
    
  • The subtraction is a correction:
    The subtraction of imports is a way to ensure that the GDP calculation accurately reflects the value of goods and services produced within the country.
    
    
  • Example:
    If a person buys a foreign car, that purchase is initially counted as part of personal consumption. However, because the car was not produced in the country, it's subtracted as an import to prevent overstating domestic production.
  In essence, while imports are part of the spending side of the equation, they are removed in the calculation to isolate the value of domestic output.
  • .."

Also: https://econofact.org/factbrief/fact-check-does-an-increase-in-imports-directly-reduce-gdp#:~:text=No,on GDP, positive or negative.

As to EE discussions, I do well in the areas I studied. Thanks.

 

[Noske]

No, imports do not directly impact GDP in the long run

is incorrect.

Maybe you could think of a reason why AI is incorrect on this.

 

[pablolie]

No, imports do not directly impact GDP in the long run

is incorrect.

Maybe you could think of a reason why AI is incorrect on this.

Wasn't only AI, there's also a link to another source. Perhaps your interpretation is wrong. Show us a source that supports your side of the argument. I don't want a fight here [I even highlighted the fact there are 3 different ways to calculate GDP, you should have grasped that], you may believe the sources or not. Our discussion here was about tariffs, so I'll stick to that.

 

[Noske]

Wasn't only AI, there's also a link to another source. Perhaps your interpretation is wrong. Show us a source that supports your side of the argument.

I am OK with being wrong. I am often wrong and am the first to admit it. There is no argument.

Now that we have that sorted out, oops, I didn't ask a question, I simply wished for you to respond as to why AI (and now, apparently, the University of Munich) is incorrect in stating that imports do not directly impact on GDP in the long run. Let's pretend that you are back in class.

 

[amper42]

U.S. Bureau of Economic Analysis (BEA) releases GDP data on a quarterly basis.
BEA typically releases three estimates:
An Advance estimate (the first release for the quarter)
A Second estimate
A Third estimate (final revision for the quarter)

The second estimate is scheduled for August 28, 2025. It's possible we will see a change in the reported number at this point. Moving from negative GDP to a 3.0 reading so quickly is quite unusual.

 

[pablolie]

Wasn't only AI, there's also a link to another source. Perhaps your interpretation is wrong. Show us a source that supports your side of the argument. I don't want a fight here [I even highlighted the fact there are 3 different ways to calculate GDP, you should have grasped that], you may believe the sources or not. Our discussion here was about tariffs, so I'll stick to that.

I should also note: I find it un-intuitive. But you can look at it from either a math or logical definition:

1. Since imports are not part of domestic production, they are subtracted to THEN establish GDP = they don't count *towards* the GDP.

2. Imports are subtracted from "total domestic revenue" (which IS NOT the GDP), so as a math variable they *do* count = they count to calculate the GDP.

But since the definition is not GDP = GDP - Imports, but rather GDP = Total_Domestic_Revenue - Imports the imports do NOT count towards GDP. They do count in calculating the GDP, though.

Tomato tomatoe...

 

[pablolie]

... Let's pretend that you are back in class.

That's a re-occurring nightmare - so no thanks.

 

[Noske]

I should also note: I find it un-intuitive. But you can look at it from either a math or logical definition:

1. Since imports are not part of domestic production, they are subtracted to THEN establish GDP = they don't count.

2. Imports are deducted from "total domestic revenue" (which IS NOT the GDP), so as a math variable they *do* count = they count to arrive at the GDP.

But since the definition is not GDP = GDP - Imports, but rather GDP = Total_Domestic_Revenue - Imports the imports do NOT count towards GDP. They do count in establishing the GDP, though.

Tomato tomatoe...

The answer to why imports actually do impact on GDP in the long term is because countries often depend on them, however defined - their GDP may slump.

For example, what if Japan were unable to import petroleum?

If Ireland could not import foreign companies? If the US no longer imported migrant workers?

I guess the back in class thing was that it is a good idea to occasionally think, rather than to run off to AI or to a web reference. Yep, it hurts!

 

[pablolie]

The answer to why imports actually do impact on GDP in the long term is because countries often depend on them, however defined - their GDP may slump.

For example, what if Japan were unable to import petroleum?

If Ireland could not import foreign companies? If the US no longer imported migrant workers?

I guess the back in class thing was that it is a good idea to occasionally think, rather than to run off to AI or to a web reference. Yep, it hurts!

No one has disputed imports have economic impact. But GDP just concerns itself with gross domestic output, and imports are subtracted in the formula, so they don't count towards GDP. They impact it for sure. You are confusing definition with math calculation.

[And the punch missed the target by a mile, so no pain, thanks.]

 

[amper42]

I was curious how the GDP data is acquired and found it's rather crude. Two survey's are used : an Interview Survey and a Diary Survey, each with different strengths and challenges. This is how the US consumption factor is measured. It's not a real number - just a survey.

Apparently, it not possible to obtain real numbers on US consumption. - while it's interesting that they try to make this calculation it's subject to lots of possible issues and could be totally off. What you are really measuring is a survey, not real data. You hope it's close, but no way to know. This Government invented science is a lot less reliable than speaker measurements.

 

[respice finem]

Regardless of the intrinsic complexity of al this, realistically, prices always rise with time. Which does not mean, everything is getting more expensive. The "average Joe simple metric" would be, for instance, how many gallons of fuel can I buy with my net income?

 

[pablolie]

I was curious how the GDP data is acquired and found it's rather crude. Two survey's are used : an Interview Survey and a Diary Survey, each with different strengths and challenges. This is how the US consumption factor is measured. It's not a real number - just a survey.

Apparently, it not possible to obtain real numbers on US consumption. - while it's interesting that they try to make this calculation it's subject to lots of possible issues and could be totally off. What you are really measuring is a survey, not real data. You hope it's close, but no way to know. This Government invented science is a lot less reliable than speaker measurements.

It is indeed. That's why it is by far not the only number the judge a country's economic health. Stuff like employment figures, consumer spending trends, consumer sentiment/spending, home building/sales etc etc are just as important as GDP. And indeed many economic activities are not reflected in the GDP.

PS: And let's not forget budget deficits and trade balances!!

 

[diablo]

Some have doubts about the accuracy of data -

US economic data quality a worry, authorities not acting urgently enough, experts say- Reuters poll

Risks to the quality of official U.S. economic data - long seen as the gold standard - are worrying 89 of 100 top policy experts polled by Reuters, with most also concerned that the authorities are not addressing the issue urgently enough. A decline in official survey participation rates and...

www.yahoo.com

 

[Keith_W]

Apparently, Apple has lost its MOJO. Great hardware, but no real AI in the works. They are missing the boat?
Perhaps it's just a phone company that's gotten lazy?

They are screwed.

1. Missed the AI boat. "Apple Intelligence" is a joke.
2. Likely to be forced to give up app store payment monopoly by the DOJ which will puncture one of their biggest cash cows.
3. Lost market share in China to home grown competitors. Looks like the Chinese are as suspicious of American spying as Americans are suspicious of Chinese spying
4. Lost a lot of money on dead-end projects like the Apple car and likely to lose even more with Apple Vision Pro
5. Lead by a logistics whiz kid who had his "logistics genius" rug pulled out from under him by tariffs.

I would have hoped that their long history of anti-consumer behaviour, blaming consumers for their design flaws and refusal to admit mistakes ("you're holding it wrong"), going after bloggers who publish product leaks, suing companies for trivial infringements like rounded rectangles and pear logos, stupid design choices like mice that need to be inverted to be charged and keyboards that die with a speck of dust, etc etc etc would be enough to sink them.

Nobody needs Apple, not in the same way that we need Google, Amazon, and even Microsoft. Try to live a week without using any services from the last 3. Even if you don't buy anything from Amazon, or own any Alexa products, it is likely that some website you use will be on Amazon or Microsoft web services. Now try to live without Apple. It's quite easy to do, I have been boycotting Apple for 20 years.

 

[Salt]

I grew up and had a well living for over 40 years without Google and Amazon, just suffered a few years with smallsoft.
And from my personal point of view, I could return to that state without pain.

We found out any destiny with a digit (second finger of a hand) on the map, not on G-map, and managed to arrive as intended.

Conversation worked face to face or via phone-bone sufficiently.

Printed media offered via advertising enough of 'you can buy everything as long as you can afford'.

And so on.

Of course there's some comfort now, but it is not inevitably necessary.

But I'm old now, ....

 

[pablolie]

...

Nobody needs Apple, not in the same way that we need Google, Amazon, and even Microsoft. Try to live a week without using any services from the last 3. Even if you don't buy anything from Amazon, or own any Alexa products, it is likely that some website you use will be on Amazon or Microsoft web services. Now try to live without Apple. It's quite easy to do, I have been boycotting Apple for 20 years.

That's strong. I have not bought Apple products ever (not for myself). I am a bit of a tinkerer, so I much prefer Linux and Android, and for work a Win computer will do fine. Apple's walled garden approach never appealed to me, especially when products like iTunes were about as user friendly as a Mastiff with rabies.

That said I don't wish them failure, it'd be a huge loss for our economy. And *many* people seem to love the pretty UIs and the controlled security and software delivery (I don't buy it, but many firmly believe it)... and hence they have a fiercely loyal user base. Also unique is that they transcend the software and electronics image into entertainment and luxury. I once gave my Mom an Android phone and she screamed in horror, she claimed she could only use Apple (even tough she somehow manages to misconfigure her iPhone to oblivion). And my GF still uses an iPhone X that is still fully supported (pretty unique among phone and tablet products) after all these years.

Many sources indicate that there's been an over-investment in AI, and many stats out there show that AI investments in enterprises fail over 70% of the time. Maybe Apple knows something we don't yet. I think their industrial engineering, coherent user experience (for those who don't want to configure much) and user loyalty will keep them going for quite a while.

The AI angle in AMZ, GOOG and MSFT is about data centers and the enterprise market to a large degree very different direction (well and for GOOG it's all about search and ad revenue mostly). Apple is a consumer lifestyle brand, so quite different, IMO.

 

[Timcognito]

Many sources indicate that there's been an over-investment in AI, and many stats out there show that AI investments in enterprises fail over 70% of the time.

Yes not long ago there was era of investment in the World Wide Web that was all the rage, followed by the Dot Com crisis where the Nasdaq dropped 77%., S&P 50% and DJ 37%. This AI thing seems very similar to me, although like then, I'm sure there will some big winners. My guess it will come where real time data is crunched and fed into systems that need it right away like automation, military conflict, traffic control and medical diagnoses of MRI/CAT Scans, etc

 

[pablolie]

Yes not long ago there was era of investment in the World Wide Web that was all the rage, followed by the Dot Com crisis where the Nasdaq dropped 77%., S&P 50% and DJ 37%. This AI thing seems very similar to me, although like then, I'm sure there will some big winners. My guess it will come where real time data is crunched and fed into systems that need it right away like automation, military conflict, traffic control and medical diagnoses of MRI/CAT Scans, etc

There are a myriad of very useful applications. The big question is how much are customers willing to pay for those.

Our company provides a very cool AI tool that makes the configuration and operation of very complex products much easier. Works really well, saves a lot of time. But basically customers just go "I am not paying for this, but thanks for providing it for free for now - not my fault your stuff is very complex and very expensive, you kinda owe us this stuff.".