Why I hate tariffs

[amirm]

Lesotho, a a small country in South Africa, is going to be hit with a 50% tariff. How was that computed? Well, we buy blue jeans and expensive diamonds from them. Let's say we pull the jean manufacturing into US. Exactly how do we go about finding more diamonds in US???

 

[amirm]

If you are going to watch one video on the topic of tariffs and impact on US manufacturing, please watch this. Mentour is my favorite channel, hosted by a commercial pilot talking the inside story about airlines, airplanes, etc. he has half a million subscribers and dominates this category. Note that like me, he is making an exception to cover this topic as it is so important and so critical to do so. There is good bit of insight as how commercial jets are manufactured. You can speed it up to shorten the time as it is rather long:

 

[amirm]

As I expected, China reportedly has ordered the Chinese companies to stop accepting airplanes and airplane parts from US. This is doubly painful for us because bulk of Boeing manufacturing is in the state we live in.

China halts Boeing jet orders

Boeing has delivered 18 aircraft to nine Chinese airlines so far this year, numbers show. However, they have been told not to accept any further deliveries.

www.foxbusiness.com

"Chinese airlines have been ordered not to take any further deliveries of Boeing aircraft in response to the U.S. imposing 145% tariffs on Chinese goods, Bloomberg News reports.

Boeing's year-to-date deliveries show that 18 aircraft have been delivered to nine airlines in China. The country's top three airlines – Air China, China Eastern Airlines and China Southern Airlines – have plans to take delivery of 45, 53 and 81 Boeing planes, respectively, between 2025-2027, Reuters reports.

Boeing sees China as an opportunity for growth, according to Reuters, where rival Airbus holds a dominant position.

Beijing has also asked that Chinese carriers halt purchases of aircraft-related equipment and parts from U.S. companies, the Bloomberg report said, which is expected to raise maintenance costs for the jets flying in the country. However, the Chinese government is considering ways to provide assistance to airlines that lease Boeing jets and are facing higher costs, Bloomberg News reported.

[...]

A 125% duty would significantly raise the cost of Boeing jets bound for Chinese carriers, making them a financial burden and potentially prompting airlines to consider alternatives like Airbus and domestic player COMAC."

Boeing has other mess on its hands even for US customers. Its costs are potentially skyrocketing due to tariffs yet its US airline customer are loathe to pay any increases, thereby squeezing Boeing caught in the middle.

 

[amirm]

In his first term Trump rose tariffs on some Chinese products. China retaliated, resulting us turning 90% of the tariff to the farmers. Here it is starting again: https://www.theguardian.com/us-news/2025/apr/15/farmers-trump-tariffs-bailout-extreme-weather

"Farmers across the United States say they could face financial ruin – unless there is a huge taxpayer-funded bailout to compensate for losses generated by Donald Trump’s sweeping cuts and chaotic tariffs.

[...]

Trump is also shuttering local food programs which provide farmers with stable domestic markets like public school districts and food banks, helping make farms more resilient to global economic shocks. The USAID, which purchased about $2bn every year in agricultural products particularly wheat, sorghum and lentils for humanitarian aid programs, has been dismantled.

The loss in federal programs alone would have been tough to cope with, but then came the trade chaos. Trump’s tariff announcements began when most farmers already had spring crops in the ground – or at the very least had prepared the land and purchased inputs such as seeds and pesticides, making it impossible to switch to crops that could potentially find a market domestically.

Consensus is growing among experts that the turmoil represents an opportunity for rival agriculture economies – and disaster for US farmers.

“It’s all happening so fast and in the middle of the growing season, it’s a shock to the system that’s going to be tough for farmers, especially those growing commodities for export,” said Ben Lilliston, director of rural strategies and climate change at the Institute for Agriculture and Trade Policy (IATP). “Tariffs are not magical, they need to be used strategically as part of wider reforms to the domestic economic agenda.”

“The volatility of the tariff policy decisions, with new tariffs frequently being announced, paused and placed will take a toll on the American agricultural industry,” writes economist Betty Resnick in an article for Farm Bureau, a right-leaning lobby group. “Without direct support from USDA or a farm bill with an updated safety net, farmers will almost certainly bear the brunt of these tariffs.”

And get this:

"For decades now, US farmers have been heavily incentivized through the Farm Bill to grow commodity crops destined for export such as wheat, corn, soy, sorghum, rice and cotton, rather than produce for domestic consumption. "

So we pay farmers to grow things that other countries want. Then we declare a tariff war and cut the legs from under them to sell overseas!

"Even if there is a bailout, getting the money to farmers in time to avoid bankruptcy will be much more complicated this time, according to Lilliston from IATP.

“Another bailout seems inevitable but there are serious questions about how quickly it could be implemented with such a dysfunctional Congress, local USDA offices shuttered and fewer staff. It’s a very messy situation and farmers are already experiencing harm.”

And in the medium and long term: “The US reputation has taken a huge hit. We can no longer be considered a reliable trading partner which is terrible for farmers,” added Lilliston."

 

[amirm]

You know you are in trouble when right leaning WSJ, even before the reciprocal tariffs was put in place, explained why it is such a bad idea:

The last 30 second is very important on the two scenarios we may be hit with:

1. The rest of the world retaliates with their own tariffs.

2. The rest of the world says screw America and band together to isolate us.

 

[amirm]

Get this: Chinese container ships have stopped coming to our (Tacoma, WA) port and instead are going to Vancouver, Canada (3 hours north). I suspect the goods are subject to tariffs but they manage to do serious damage to our port business and all the families that depend on it (we are one of the largest ports in US and major destination for goods from Asia). Likely this is order from the government, going after where we are vulnerable.

We are also one of the top produces of Apples and Soybeans. The other shoe will drop when harvest is ready and there is no option to ship them to China.

This is on the heals of all the cut backs in so many areas in our state due to grants, government department budgets/employment, etc. being paused.

Wonder how much beating our economy is going to take before we hit a very hard limit.

 

[amirm]

The worst part of this tariff business is not the tariff, but the incredibly poor execution and lack of any planning. No manufacturing operation can be brought into US overnight. Why not have a 1 to 2 year grace period to give time to companies to bring these capabilities to US? Why not take the tariff money and provide it as loans and grants to companies to offset the capital expenditure that is necessary for this move?

And if you want more blue color workers, why not fund education in fields such as welding, industrial machinery, etc.? Give a 100% tuition reimbursement if the person completes these programs successfully. And then make sure you can find them jobs.

You don't just start collecting the money, earmarking for nothing. This is what we do in companies. We make decisions and put together execution plans on how we are going to go from here to there.

 

[amirm]

I was thinking of posting an analysis of impact of tariffs on US audio manufactures, but Goldensound did it, and one better. Please watch:

 

[amirm]

China tariffs are now "up to 245%!" From white house fact sheet: https://www.whitehouse.gov/fact-she...ed-critical-minerals-and-derivative-products/

"China faces up to a 245% tariff on imports to the United States as a result of its retaliatory actions.

• This includes a 125% reciprocal tariff, a 20% tariff to address the fentanyl crisis, and Section 301 tariffs on specific goods, between 7.5% and 100%."

Man, imagine you are a US manufacturer and were in the process of figuring out how the heck to deal with 145% tariff of your imported parts. Now it is 245%? What is it next week? 5343%?

I imagine we are at a point where no one will pay for these tariffs and products will just disappear from shelves. Both American made and overseas.

 

[amirm]

If you can just reserve 10 minutes of your time to watch economist and professor Jeffery Sachs in this forum, you will get an incredibly clear picture with US financial situation in general and tariffs in the specific: "

'I’d Fail Him as a Student’: Sachs Publicly Grades Trump’s Trade Illiteracy"​

There is also a good bit later in the video where he talks some more.

 

[amirm]

Leave it to a hardcore republican senator and supporter of our president to step "out of line" and speak the truth about tariffs:

The rest are way too scared of saying anything.

 

[amirm]

What a surprise.... major carriers don't know how to handle the avalanche of tariff related paperwork and neither does customs. Wait until the under $800 exemption expires and they have to do this for a $5 item: 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 introduction 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".

[...]

Previously, packages worth up to $2,500 could enter the US with minimal paperwork but due to tighter customs checks that came into force alongside Trump's tariffs earlier this month, the threshold has been lowered.

DHL said that the change "has caused a surge in formal customs clearances, which we are handling around the clock".
It said that while it is working to "scale up and manage this increase, shipments worth over $800, regardless of origin, may experience multi-day delays".

The company said it will still deliver packages worth less than $800, which can be sent to the US with minimal checks. But the White House is set to clamp down on deliveries under $800 - specifically those sent from China and Hong Kong - on 2 May when it closes a loophole allowing low-value packages to enter the US without incurring any duties."

FYI majority of packages I get from companies in China is shipped via DHL which then hands it to our post office for the last mile delivery.

 

[amirm]

Looks like our government is going to blink first instead of China on tariffs:

However it comes, it will be more than welcome as we are on the path to damage both of your economies with these emotionally driven rates.

 

[amirm]

Just a note on sources of information. As you can imagine, much of what is wrong with the current policy is pointed out by left leaning sources. I know such videos can be bothersome to some. So I routinely spend hours trying to find alternate sources for the same clips. Above, I managed to do that with Fox News but it is not always easy.

 

[amirm]

Boy, this stuff comes and touches you like nobody's business.

Was looking to get my first 3-D printer and thought I go all out and get the latest model from Bambu Labs, the H2D. All the reviews said it cost $1,895. When I started my search a week or so ago, I was surprised to see the price being $2,195. Well, by the end of the week, it became $2,395 or $500 more!!! It was expensive and a bit above what I wanted to spend at $1,895. Now it is a no go.

This is what people don't realize about tariffs. They resulting price increases reduces demand.

I did buy a 3-D printer by the way. It is the Chinese QIDI Plus 4. It must still be going under the tariff radar or getting a pass due to de minimis exception. Bought it for just under $800. Will see if it is as easy to use as the Bambu.

 

[amirm]

Talk about "fixing" what is not broken: