Wondering what tariffs might do to you? Here's what happened to washing machines and dryers after Trump tariffed them in 2018:
Three years later they were 20% more expensive instead of continuing a trend that would have made them 20% less expensive. Now multiply that by everything and you'll get a sense of what Trump's latest tariffs are going to do to us.
Another factor is that companies got a taste of greedflation in 2021/2, I think a lot more prices are going to go up than data-driven economists are predicting.
+1
+2
Probably not. It's been known since the 1980s and the automobile tariffs imposed then that domestic manufacturers prefer to increase gross margins rather than increase market share when a tariff is installed. They generally raise their prices by roughly the same amount as the tariff that foreign manufacturers face. So, data-driven economists are already on to this.
Yes. Profit margins over market share; investors pay more attention to the former than the latter. Of course, if you can buy out enough competitors to dominate the market, profits can take off, antitrust enforcement being almost dead.
Probably not? Increasing profit per unit is exactly what Anthony was saying with greedflation.
"Probably not," has nothing to do with what companies will do. That interpretation would make my comment an incoherent mess of contradiction.
"Probably not," is a response to the claim that economists aren't taking this into account. Because they are.
+3
This isn't new. Back in the late 90s the company I was working for struggled for a good month to try and get Microsoft certification for a pair of (very expensive - $75K apiece) HP servers - as the resident Windows expert, I got called in.
Bottom line, someone had decided to use "passive" SCSI" (Small Computer System Interface) terminators instead of the more effective "active" terminators to damp electronic noise on shared bus.
I swapped in 2 active terminators and we got our Microsoft certification. The day after we were listed I got an urgent phone call from a senior HP VP in charge of their Windows program asking how the (expletive deleted) we'd managed to do it because THEY couldn't get the final 24 hour stress test to work.
"You need active termination for your extended SCSI bus to pass the stress test."
Judging from his reaction, I think he had been a very imaginative drill sergeant in a prior life. Once the short but extremely educational tirade finished, he thanked me profusely, apologized for the outburst, and hung up. I hope the collateral damage was limited.
As SCSI… so many flavors to choose from…
+4
They can raise prices all they like now and The Felon takes all the blame. Thanks, Republican voters!
JFC…. Seems we’re nowhere near rock-bottom yet, where shit might start to get better.
Never. The year 2025 is to the United States what the year 334 was to the Roman Empire.
234?
What is the Y axis?
Probably some sort of index.
Price index, 100 means 100% of the price at the time point (in this case, the price in 2018)
yes.
Yes, though he didn't line up his slope and numbers very carefully. Or maybe I just need glasses.
The price point doesn't include inflation or deflationary pressures.
So his numbers aren't exactly in the absolute Y. They'e a measurement along it, though.
Looking closer at the chart, 100 is not when they were enacted, but when they were passed.
Which is stupidly confusing.
So please explain why Joe Biden and later the Kamala Harris campaign did not tell this story in 2024? It sounds like it would have been a real head-scratcher for American voters who might have been inclined to believe Trump's bullshit.
Of course, I know the answer: the political consultants would rather construct cute alliterative talking points and slogans, thinking that telling a clear story about a tariff would be way too BORING for the customers . . . er . . . VOTERS to understand. It wouldn't fit the BRAND they were developing for the product . . . er . . . CANDIDATE who was paying them for their genius.
Trump said the tariffs would be paid by the countries of origin and not the customers. It didn’t matter how many times Democrats said that was a lie. People believed Trump. The MSM supported Trump in this by saying it was “unclear” whether tariffs would raise prices or that Democrats refute his claims. Trump talked about vast sums of money coming in to our country through tariffs and how the money could fund things like child care. All paid for by the other countries.
I doubt that people who voted for Trump will blame him when prices go up. They seemed to drink the potion of forget with regard to Mexico paying for the wall.
"Trump said vast sums of money are coming to our country through tariffs ...."
He is exaggerating, of course. What he meant is that other countries are buying $TRUMP as a peace offering to placate Trump and forestall tariffs.
So please explain why Joe Biden and later the Kamala Harris campaign did not tell this story in 2024?
It's common knowledge that you can't utter a word that somehow, somewhere might offend a factory worker in a swing state even though 99.935% are already MAGA loyalists, and even though in our modern economy, they're outnumbered (even within the working class) 173 to 1 by folks who work in healthcare, hospitality, logistics or retail.
People only buy a wash machine every ten or fifteen years, by which time they've forgotten how much the last one cost, so mostly people just aren't going to listen to a story about rising wash machine prices, no matter how well it's presented. Eggs, on the other hand, people buy every week or so, which means they notice price changes.
Either way, asking 'why didn't (democrats) say' can usually be replied with 'why didn't you hear them say this?'
Because they usually have.
Well, that's part of the problem, isn't it? The Dems don't seem to have a big enough megaphone. They're not reaching enough voters. Maybe they've got a great message! But if only a few people hear it (and don't "re-Xit" it), it's drowned out by all the other noise.
For what it's worth, I didn't hear it, either.
Anyone with a pulse could’ve heard it. I did. This BS is on the voters, too many of which are profoundly stupid and shortsighted.
The issue is not the size of the megaphone, it is the fact that Dems live in the fact-based reality and Repugs can say whatever exciting and non-sensical shit they want.
Like you said, it is on the voters for believing it, or more likely, enjoying the entertainment value and thinking it will only happen to Brown People (or those other Brown People in some cases).
+1
But they DID say this. In particular, Biden spoke of his work to end the brief Covid inflation spell and his success, as opposed to Trump's. More important, Harris repeated again and again that the tariffs would be sales taxes on Americans. Adding that Trump had a washing-machine policy just throws in something Americans would find obscure. I can hear them responding with a big "huh?
And sure, the GOP lies keep coming, and you can't count on the mainstream media to counter them. Does that mean the left needs a bigger mouthpiece? How exactly? And who is it supposed to target? They worked rather to dominate the spotlight,, but it's so hard now. Even the more consistent number of NY Times stories this past week on Trump's actual nominees and other actions have swayed few. I'll just repeat that we're probably doomed and don't blame Democratic leaders for doing what we want them desperately to do.
They could have told this story every day for a year and all the voters would have heard is Bidenflation, borders closed, deportations.
I thought about that all the time.
Me: Economists consider around 4% unemployment to be the frictional level, since people quit to look for a new job or get laid off because business is down in their segment or get fired for some reason or no reason pertaining to them. That's the level we have had for the past two years. Let me explain modern trade and supply chains, and how a million people in the US dying, large segments shutting down, people buying toilet paper and eggs for at home instead of at work and at a restaurant, entire cities in China completely shutting down works to temporarily raise inflation worldwide. But we have led the world in post pandemic GDP growth by a lot, and core inflation has been around 2%, which is as low as it goes in a growing economy. And average wages have been up above inflation for two years in the US. Overall productivity increase in the economy has been raising our living standards for 250 years, but starting with Reagan the increased wealth has been going almost entirely to the already wealthy instead of everyone's income going up like in the past so we have to reform federal income taxes and pay more to enforce the laws on the wealthy who pay to circumvent it, collecting five or ten times the cost.
MAGA: OWN THE LIBS! GET RID OF TRANS PEOPLE AND DIRTY MEXICANS!
By the time they become 50% more expensive, the Chinese ones will have US-made equivalents on sale for the same price. Golden Age!
I know this is snark, but the serious side is that tariffs only make US-produced goods competitive in the US market. Tariffs on imports from China just encourage American companies to move production to another low-wage country, like Vietnam or the Philippines. To manufacture in the US and be competitive worldwide would require significant investment in automation. Since our corporations are mostly run by MBAs who know squat about manufacturing technology, they’ll go for labor arbitration most every time.
U.S. manufacturers have invested in automation, which is why it’s not possible to bring back the manufacturing jobs we had in the 1950’s. Krugman wrote about that here:
https://paulkrugman.substack.com/p/no-trump-cant-make-manufacturing
And that process of increasing overall productivity has been going on since Adam Smith wrote about it right around when we were deciding to not be colonies of England any more.
Manufacturing will never be as large a fraction of the economy as it was in the 1950’s, nor will manufacturing employment. Nevertheless, advanced manufacturing technologies (including but not limited to automation) has allowed us to produce much more than we did in the fifties, and remain competitive in many industries.
I've seen little discussion of the implications of Trump's trade war for American exports. If Apple, for example, brought all its manufacturing back to the US (assuming that is technically practicable), its more expensive products would be competitive only within America against imports whose prices were inflated by tariffs. It would face the prospects of losing its overseas markets, which constitute more than half its sales.
One of the biggest losers would be Tesla, which makes me think Trump's whole tariff agenda is bullshit which he has no intention of implementing in a serious way. Making empty threats as a coercive tactic is going to get old very quickly.
But Apple's products are not being manufactured in the US now? So going from 0 to 50% doesn't seem like a tragedy.
As for Apple the company, it's a soulless sociopath agglomeration of capital -- all companies are, by design. So I don't care what happens to Apple the company.
Stock futures are down about 2%. Bond futures (rates) are down slightly. Markets seem to be taking notice at last.
Stocks are coming back based on deal pausing tariffs with Mexico. The next for years will be a whirlwind of shit with Trump’s on again, off again pronouncements.
This time, it'll be a lot worse.
USDA says we get 63% of our vegetables and 47% of our fruits and nuts from Mexico. With the immigration crackdown, real or just show, it is having a deleterious effect on farms with immigrant workers voluntarily leaving and forcing farms to use farmworker visas. So even domestic produce is also going to be hit hard.
The worst hit, of course, will be those on SNAP and others on fixed income. This administration is going to cut funding even while it makes nutritious, healthy foods impossible for these people to access.
I fully expect the birth rate to plummet as quick as China's.
Sadly, yes, the only babies born will be the left tail Second STDEV children of "quiverfull" women and their "Beat Wifey for Jesus" husbands.
No worries. That just means we can buy more domestic fruits and vegetables. Fortunately, we have plenty of people eager pick them for extremely low wages. Oh wait...
So had the tariffs not been imposed, another fifteen odd years after 2018 washers and dryers would have been free?
Don't let common sense get in the way of a good trendline!
Common sense tells me even if the trendline began to flatten out at a natural floor, that's still better than a reversed, upwards trajectory.
Someone else already found the source data. https://data.bls.gov/dataViewer/view/timeseries/CUSR0000SS30021
Can adjust the timeframe for the longer-term picture.
And did the higher prices lead to washing machine companies opening factories and creating high paying jobs in the Midwest? I think that's the point so that's how to judge it.
My recollection is that American companies were asking for the tariff. They accused overseas manufacturers of dumping product at costs lower than it cost to manufacture them and thus making it impossible to compete. Isn’t that actually what tariffs are good for? Isn’t that why Biden kept them in place?
There are anti-dumping remedies in international trade rules and agreements, but TFM prefers unilateral actions rather than working with others in a trade bloc.
Or at least save some of the jobs that were already there. No idea if that happened or not. I believe Whirlpool is the only major brand still made in the USA (aside from some real high-end ones like Wolf or SubZero), so this appears to have been mostly an effort to keep them in business.
GE claims one washer made in the US: https://www.geappliances.com/appliances/washers-made-in-america/ of course GE Appliances is owned since 2016 by a Chinese company.
I wonder if South Korea (LG, Samsung) were affected by the tariffs...
I read upon this recently. Trump claimed that Samsung and a second company I can't remember opened factories as a result of the tariff. However, if you go back and look at the stories around those factories the companies had already bought land and made plans on building before the tariffs took place. They were not finished until after the tariffs were enacted. So what Trump did, what he often does, is take credit for something that was going to happen anyway.
Steve
What’s the over/under on the length of these tariffs? A week? A month? Can’t be long before Trump calls them off and claims some bogus victory.
Robert Reich has a great column on the purpose of the tariffs. It's a strongman show of power to lay the groundwork that he's in control and will break your economy if you don't play ball. It's how the mafia administration rolls.
https://robertreich.substack.com/p/what-you-need-to-know-about-trumps
That's a very clear and valuable post. Thanks for sharing.
How will the Federal Reserve Board deal with this (assuming they remain independent)? Hold rates steady to quell inflation?
I'm waiting for the EO that disbands the FED. Don't think he won't try.
Can't, because congressional R's won't let him. There's precedent for this, which Kevin noted on this very blog. The R's in congress will roll over for all manner of Trumpian idiocy and corruption, but they will NOT let him mess with the Fed. He tried to appoint some incompetent kook to the Fed Reserve Board during his first term, and they blocked it. They insist on competence at the Fed. Apparently it's the one part of the government that the donor class really cares about.
The speed by which a Republican Congress is reacting does not instill hope.
Right? He's just bypassing Congress, they are fully irrelevant. Where he can't bypass them (cabinet approvals) he's threatening his way through their ranks.
Do you think Congress gave approval to eliminate the USAID office? How about shut down IRA? How about tariffs? He's not asking, he's just steamrolling along. The Fed will either do his bidding or they'll be shut down.
Just remember folks, trump is doing this to help the drug addled avoid fentanyl and to keep the immigrants in their home countries. No more overdoses and no more fear among illegals.
Oh… and maybe you get a tax cut too!
So the proper response is to adjust your spending. Necessary items only.
No vacation and no eating out.
You are much too kind. the effect on drug use is an unintended consequence. Scratch the surface and he'll tell you addicts are suckers, a bit like the soldiers who he insulted during his first administration, who gave their lives for their country.
Trump is a sick guy who likes power. And now he gets to wield it i.e. Greenland, Panama, Ukraine, and ditching all our allies. He wants, but innately can't be, as strong appearing as Putin....because deep down he's the inarticulate poorly informed psychopath we saw when confronted by Kamala in that second debate.
And none of this is good for us or our country..
Well there’s a message in there which could be used. How happy will people be paying more for stuff just to help drug users?
I read recently (not going to Google this) that an anonymous source in the administration said that drug deaths would be the measure of success for TFM’s tariffs on Canada, Mexico and China. KD showed us on 28 January that overdose deaths are already down sharply, so the Felon will (again) get credit for something that was already happening.
the agreement he reached with Mexico fits with this: he can use it to claim that sending Mexican forces to the border reduced the smuggling of drugs, and hence caused reduced in deaths.
Three weeks, tops. And, yes, Trump will claim a big victory even though nothing really changed.
Turns out only three days. Mexico tariffs already lifted and Canada's probably soon. This is all about Trump being a bully. Robert Reich has it right:
https://substack.com/@robertreich/note/c-90732704?utm_source=notes-share-action&r=4xr555
You referring to this? https://www.cnbc.com/2025/02/03/trump-tariffs-mexico-canada-china-sheinbaum-responds.html
Yep. A meaningless gesture by Mexico. It's all about the bullying. 10k troops isn't going to accomplish anything, even if they follow through, which isn't necessarily required and which I find extremely doubtful.
They don't need to follow through. Troops were already at the border.
Yes, some 15,000 already were in border areas.
The bottom line what's the point of all this? A simple phone call to the Mexican President would have accomplished the exact same things, especially if you are already on good terms or very friendly. Why make threats that are counter productive and probably not even follow through on. Why create a lot of unnecessary bad blood?
Because Trump. He is the kind of guy that shows up to a restaurant and angrily demands to see the manager to demand a dish that is already on the menu, at the discount already listed. All so he could then brag about how amazing and powerful he is for getting the manager to agree to his demands, when in reality he got the same dish at the same price as anyone else would get.
What people fail to grok about tariffs -- including our man-baby president -- is that not only are they not paid by the exporting country, the whole point of them is to *make things more expensive* so domestic products can compete with the targeted imports. Trump in particular seems to be under the impression that if manufacturers feel enough pain, they'll reshore their operations and...make stuff as affordably as they did in China or Mexico, for some reason. This scheme only works if this new generation of Made in the USA workers get $1.50 an hour.
A nice recession and massive job losses will take care of that high wages problem.
On the other hand, appliances are junk nowadays. We bought our house in 2019 and the dryer died the next year. We replaced both it and the equally old washer. Three years later the washer failed, costing me $100 in parts and a miserable Sunday morning. The dryer died last week, $300 to fix. The original dishwasher died in 2021 and I’ve already had to DIY repair to fight off leaks, and the original fridge died in 2022 due to a fifty cent piece of nearly inaccessible plastic failing.
Cost down my bleep.
So Kevin is claiming that "laundry equipment" would have been 50% the cost in 2024, but for tariffs in 2017? What does it look like going the other direction? Do you recall "laundry equipment" being 200% as expensive in 2008 as in 2017?
But! The Trendline!
Here is the time series that Kevin appears to be relying upon. You can update the endpoints to get values from 2006 to 2024. Needless to say, the overall time series does not support the simplified narrative that he is pushing.
https://data.bls.gov/dataViewer/view/timeseries/CUSR0000SS30021
Interestingly enough, here is an industry publication claiming that the tariffs were successful.
https://www.industryweek.com/the-economy/trade/article/21280717/washing-machine-tariffs-come-out-clean-sparkling-for-us-manufacturing
lol
That is an oped (OPINION in bolded caps at the top was the tell), from someone called Jeff Ferry, who works for an outfit called the Coalition for a Prosperous America.
CPA is " a research and advocacy group championing trade-protectionist policies in the United States. The organization opposes various U.S. trade agreements with China."
lol
As opposed to some DC free-trade think-tank funded by WalMart?
They are both advocacy based, so...
There is no doubt that Trump does not know what he is doing and his latest tariffs are insane, especially those on Canada and Mexico.
Unfortunately Trump's nonsense often seems to cause people to make absurd claims in the other direction. As others point out Kevin's extrapolation of the linear trend for laundry equipment prices has no justification. Should prices for anything decrease linearly forever?
There is a lot more to economics than drawing trend lines.
I'm a frequent critic of Kevin's trendlines, and this one is no better. But in this case the basic conclusion doesn't depend on extrapolation of the trendline: prices rose substantially as a result of the tariff. You can quibble over whether it's 20% or 50%, but the basic conclusion is correct.
👆
Why would "overseas manufacturers" sell their products at a loss in order to increase their market share in an "open market" into which other manufacturers can also sell?
It's a paranoid fantasy.
In a closed market, it's possible for a well-capitalized market leader to do something like that in order to drive competitors out of business. It's why we have anti-trust laws.
But it's very hard to make it work in an open market, because someone new with lower costs of production in yet another country with access to the open market will usually replace any competitor which is eliminated.
It's called dumping and it happens all the time.
https://en.wikipedia.org/wiki/Dumping_(pricing_policy)#United_States
Basically, you have a protected home market. You sell in your home market at a cost that covers your variable cost and your total fixed cost. You sell in the US at your variable cost. This drives competing US manufacturers out of business and furthers your own country's industrial development. Helping you (and your country) move up the value chain.
OK, I can see how that would work from a closed to an open economy.
By way of the convicted felon's EOs, his declaration of national security allowed him to impose these tariffs, but also, he used it to close the de minimis loophole. This is huge and also more evidence of a guy who keeps stomping on his own dick.
As I mentioned last year, this means everything shipped from overseas via Temu, Shein, Alibaba, etc., will have to be inspected and everything will be assessed an import tax. How this gets worked out is anybody's guess, because (a) 4M packages come in daily through the de minimis loophole, (b) there is no customs payment system in place to handle the volume, (c) the imbecile put a blanket federal hiring freeze in place, and (d) customs agents are already under duress from a worker shortage.
In totality, you can expect every package coming into the US to be delayed ad infinitum as the packages start to pile up. As the storage demands grow, someone will have to acquire additional storage warehouses to hold the millions of tiny packages.
Good luck, my fellow Americans.
I'm surprised no one has brought this up already. Price increases from tariffs means that shoppers are more willing to accept what seems like an externally-imposed cost, and businesses can take advantage to gouge.
When Trump tariffed washing machines in 2018, manufacturers raised prices on dryers by a similar amount (about 12%), even though those were not affected.
https://reason.com/2019/04/22/trumps-washing-machine-tariffs-cleaned-out-consumers/