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This NYT piece is a great example of the realities - not armchair punditry - of Trump’s trade war: “This Boutique Bike Shop Shows How Trump’s Tariffs Can Hit the Little Guy” nyti.ms/2I6NVoP
Some lessons follow... /1
Some lessons follow... /1
Supply chains are not easy to move: "Pello’s experience details why shifting to non-tariffed nations might be easier said than done for a small company. Mr. Cusick is considering moving production out of China, but such a move would take time and money." /2
Sometimes it's just impossible: "The cycling industry’s reliance on China is not unique. China dominates entire import product categories…." /3
So US companies/consumers just have to eat the tariffs: "If companies selling consumer wares face higher tariffs and cannot pivot out of China to avoid the costs, customers could pay the bill…." /4
BUT econ 101: "But bigger price tags might mean lower demand. In a few categories of already affected consumer products — like household furniture — prices increased markedly after an early round of tariffs was instituted last year. A sharp decline in sales quickly followed" /5
The little guy is always hit hardest: "The company was due for a shipment in mid-November, but its container was repeatedly bumped from boats as larger businesses with more sway rushed to import their products before January, when tariffs were initially scheduled to increase" /6
Cue sad trombone' "'We’re a pebble in the ocean,' Mr. Cusick said. 'We totally missed Christmas, which is our biggest time of the year.'" /x
