Tariffs Catch-All

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superrific said:
But by the same token, revenue would be way up! If you were doing $10M in business, and suddenly you're doing $20M in business, the lower margins would lead to the same profit.

This is the explanation I've seen elsewhere on the internet, and it just doesn't make economic sense. The business has the same risk level as before. Its operational leverage hasn't changed.

Maybe the answer is that small business loans are not processed with a great deal of intelligence because intelligence is too costly. Like, you'd get a person to evaluate a $1B loan; a $1M loan might go into a formula because it's too expensive otherwise, and the formula doesn't know about steep tariff increases. And maybe also the reason is that people expect that banks will nix their loans on declining margins, even if the banks wouldn't.
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I guess it would depend on if your fixed costs stay fixed with your revenue doubling (can happen in some industries, not in most).

All I know from years working at banks is that a a reduction in margins sets of all sorts of alarms. Not an automatic reject, but does raise concern and scrutiny.
 
ZenMode said:
I think you'd agree that letting the tariffs go into effect would have been throwing gas on the fire....
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The problem is this pause is him standing over that little ember still holding that bucket of gas and thinking, should I pour this gas on the fire.

He hasn't extinguished, he's postponed. And he's too stupid and narcissistic to just walk away unless he fells he's won.
 
CRHeel94 said:
I guess it would depend on if your fixed costs stay fixed with your revenue doubling (can happen in some industries, not in most).

All I know from years working at banks is that a a reduction in margins sets of all sorts of alarms. Not an automatic reject, but does raise concern and scrutiny.
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Well, remember: what we're talking about here is just tariffs. Nothing else about the business has changed. Why don't the purchasers demand it.
 
Well I got my tariff surprise today.

Thanks to projected proposed tariffs, our global planning team reorganized the global strategy plan for 2026/7 site production.

Therefore a project that I had in the pipeline for Q1 2027 has been moved to Q4 2025. On top of all the deliverables I already have for this year.
 
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As U.S. Buyers Cancel Orders, Chinese Factories Say No More Discounts​

U.S. customers will have to absorb higher costs as disruptions from trade war spread​


“…Chen has been working with that customer for more than a decade, he said.

“We’re both very sad, but just can’t do anything about it,” he said, adding that the customer said “sorry” to him in Chinese.

… Capital Economics estimated on Wednesday that shipments from China to the U.S. could drop by more than half in the coming years if the duties remain in place.

… Earlier in the year, some Chinese factory owners offered price cuts for American customers to help them manage two 10% tariff hikes that Trump imposed after returning to office. But now, with average U.S. tariffs so much higher, many say they can’t discount further without operating at a loss.

Some Chinese factories say they are willing to lose orders from U.S. companies and find buyers elsewhere—or idle production if they have to. That would leave U.S. importers with the bulk of the burden of tariffs, which they would likely then have to pass on to American consumers in the form of higher prices. …”
 
nycfan said:

As U.S. Buyers Cancel Orders, Chinese Factories Say No More Discounts​

U.S. customers will have to absorb higher costs as disruptions from trade war spread​


“…Chen has been working with that customer for more than a decade, he said.

“We’re both very sad, but just can’t do anything about it,” he said, adding that the customer said “sorry” to him in Chinese.

… Capital Economics estimated on Wednesday that shipments from China to the U.S. could drop by more than half in the coming years if the duties remain in place.

… Earlier in the year, some Chinese factory owners offered price cuts for American customers to help them manage two 10% tariff hikes that Trump imposed after returning to office. But now, with average U.S. tariffs so much higher, many say they can’t discount further without operating at a loss.

Some Chinese factories say they are willing to lose orders from U.S. companies and find buyers elsewhere—or idle production if they have to. That would leave U.S. importers with the bulk of the burden of tariffs, which they would likely then have to pass on to American consumers in the form of higher prices. …”
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“… The Trump administration has argued that tariffs won’t be as inflationary as many economists fear because Chinese suppliers can shoulder much of the cost. Tariffs are paid by importers in the U.S., but overseas suppliers can help offset higher duties by decreasing the prices they charge. However, economic research has largely found that tariffs are paid for by American customers. …”

GIFT LINK 🎁 —> https://www.wsj.com/world/china/as-...2d?st=fYV9e9&reflink=mobilewebshare_permalink
 
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