zlacker

>>bobcha+(OP)
> Let’s do the math: Take a kid’s bike that retails at a big box store for $ 150. Let’s assume that bike costs $ 30 to make. The rest of the cost is shipping to the U.S., warehousing, transport to the store, marketing, admin costs, customer service, warranty, retailer profits, etc. Whether the bike is made in China, Vietnam or Cambodia, the new 34-38% tariffs will increase the cost by ‘only’ $ 10-12. (The old tariffs are already part of the pricing.) Add overhead and capital costs on those $ 10-12 (financing and insuring the higher purchase price, etc.). Now the price goes up by $ 15-20, or about 10-13% of the final price of the bike.

That's a great explanation of the direct impact of tarriffs for a business like this.

>>whynot+0z
And consumers will pay the $12. It won’t make it viable to make the bike in the US for < $40.

>>yzydse+vz
These blanket tariffs are less about protecting/encouraging domestic manufacturing and more about renegotiating trade. At this current framing ("reciprocal tariffs") there is an implication that they are short term. The negotiations with Canada and Mexico demonstrate a tic-for-tat game theory in effect.

Without introducing the tariffs as a long term position businesses will be less inclined to do the capital expenditure to manufacture in the US, even for businesses within the margin (mostly manufacturing with high energy inputs and low supply chain requirements) where it would be economical.