Tariffs Catch-All

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Any prediction on how fast people are going to throw money into revamping the coal industry, both mining and coal powered facilities? The ROI on that wouldn't terribly intrigue me if I were an investor.
 
finesse said:
Any prediction on how fast people are going to throw money into revamping the coal industry, both mining and coal powered facilities? The ROI on that wouldn't terribly intrigue me if I were an investor.
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Do you have any insight on markups?
 
superrific said:
Do you have any insight on markups?
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Oh hell no. The only thing I ever invested in was next week's groceries. I just think trying to revive coal is a classic case of beating a dead horse. The only way it's ever coming back is in a post apocalyptic world.
 
finesse said:
Oh hell no. The only thing I ever invested in was next week's groceries. I just think trying to revive coal is a classic case of beating a dead horse. The only way it's ever coming back is in a post apocalyptic world.
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I didn't know if you subcontracted out work. And coal is ridiculous, obviously. It makes sense cost-wise only if you cut out all the pollution costs, which the Administration is trying to do by not enforcing rules about toxic emissions, but presumably those rules will be enforced after the fascists get voted out of office.
 
superrific said:
In fairness, how many of those people voted for Trump? And it's also true that nobody saw 104% tariffs coming. Yes, electing a madman who in his prime was merely an idiot was a terrible, terrible idea, but still -- 104% tariffs are something else.

I feel bad for these small business owners getting crushed, even if they were Trump voters.
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Then I guess those who claimed, “Trump won’t be as bad as everyone is predicting,” we’re way, way wrong.
 
I'm perplexed by the rationale given by WH staffers on background that markets don't matter because they don't affect the core MAGA voter. When there's a recession, the vulnerable always suffer the most.
 
Huh? said:
I'm perplexed by the rationale given by WH staffers on background that markets don't matter because they don't affect the core MAGA voter. When there's a recession, the vulnerable always suffer the most.
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You are perplexed that idiots and liars say idiotic things and lie?
 
I don't feel badly for the Trump-voting small business owner. If they really believe they have been better served by the 2017 tax cut rather than our democratic institutions and rule of law, they deserve every bit of their misfortune.
 
superrific said:
Can someone explain something to me -- and maybe I need a new thread. Why are distributors taking markups on tariffs?

The value-added by the distributor hasn't changed. If they were adding $20 in value to a $100 product, they are still adding $20 in value for the $150 product. Why should their fee increase by 50% just because the price went up?

This is a way of asking, why do so many businesses accept multiplicative profit margins? I mean, it's a little bit like tipping waiters -- why would you tip the waiter 40% more for the same work just because the food on the plate is being charged more? In practice I tend to accept because why bother fighting (and I suppose this could be the answer above, though it seems like more is at stake there), though I tend to tip higher % at low-end restaurants and less % at higher-end ones.
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You have to increase prices correspondingly if you want to maintain your margins. Shrinking margins is never a good thing for any business. In your example, the margin is $20 on a product selling for $100, costing $80. If the retail price goes up to $150 (cost to $130) and the distributor still has a $20 margin, his profit margin shrinks to 13%. Go try to get a loan with your profit margins shrinking....who is going to loan you money when your margins are dropping 35% vs prior year?

BTW, your example of 20% margins is very low. Most distributors in businesses I've worked couldn't keep the doors open with 20% margins.
 
Huh? said:
I'm perplexed by the rationale given by WH staffers on background that markets don't matter because they don't affect the core MAGA voter. When there's a recession, the vulnerable always suffer the most.
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Also, everything I’ve ever read indicates that the “wealth effect” of a rising market positively influences the spending habits of people who are not invested in market; and, the reverse is true - in a bear market, even non-investors become increasingly concerned and pessimistic.
 
ChileG said:
Then I guess those who claimed, “Trump won’t be as bad as everyone is predicting,” we’re way, way wrong.
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Trump has been worse than we expected on tariffs, no? I mean, a 104% tariff on China is lunacy land. If someone would have asked me whether tariffs would get that high, I would have said I strongly doubt it.

Of course, elect an idiot and you run the risk of being idiot-ified by senseless government policies.
 
superrific said:
Trump has been worse than we expected on tariffs, no? I mean, a 104% tariff on China is lunacy land. If someone would have asked me whether tariffs would get that high, I would have said I strongly doubt it.

Of course, elect an idiot and you run the risk of being idiot-ified by senseless government policies.
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That’s what I am saying (perhaps poorly). Trump has been way worse than expected. In every area.
 
farce© said:
You have to increase prices correspondingly if you want to maintain your margins. Shrinking margins is never a good thing for any business. In your example, the margin is $20 on a product selling for $100, costing $80. If the retail price goes up to $150 (cost to $130) and the distributor still has a $20 margin, his profit margin shrinks to 13%. Go try to get a loan with your profit margins shrinking....who is going to loan you money when your margins are dropping 35% vs prior year?

BTW, your example of 20% margins is very low. Most distributors in businesses I've worked couldn't keep the doors open with 20% margins.
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OK, I don't know margins of distributors. 20%, 50%, whatever.

If I was a bank, and someone came to me with shrinking margins that I could see were the result of tariffs, why would I deny them that loan? They were the same business as before. Now, there would be genuine concerns about their productive capacity and market demand, but if you take those out of the picture for now, I just can't see why easily-explainable dropping margins would make a difference in terms of attracting capital. I don't know, maybe I'm taking too much of an ivory tower view.

Another hypothetical: suppose you distribute Beanie Baby widgets. There's suddenly a huge spike in consumer demand for them. Prices double. Why should your profit double? You are literally doing the same work. Shouldn't competition bring that price down? I mean, maybe that's the answer: competition exists; this is the way it works; maybe it's efficient for reasons that I don't understand. Which is why I asked the question.

Still, it seems lunacy to me.
 
ChileG said:
That’s what I am saying (perhaps poorly). Trump has been way worse than expected. In every area.
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Actually, on voting I've been pleasantly surprised so far (pleasantly being relative). And he has been more or less following court orders so far. It would be better if we didn't have to add that more or less, but he hasn't been telling the courts to fuck off entirely.

On net, of course, he's been much worse -- on that I will agree. That's in part because we didn't see DOGE coming. Not with this ferocity. And then his all of the above tariff bullshit, and his antagonism of Canada, I mean there's a reason we say there's no bottom.

I thought you were mocking the small business owners for the pollyanna attitude many Trump voters put on display, that everything would work out fine despite the fact that Trump was talking utter nonsense the entire time.
 
The larger issue is the loss in revenue from price elasticity when you raise your prices to accommodate the tariff. Then your net margin decreases because you have less revenue to apply to your more fixed S, G&A costs.
 
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