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Instant Inflation
Put some items in my Amazon cart last night, didn’t check out. Wanted to see if I still wanted them in the clear unsparing light of day. Called up the cart tonight, and every item – USB cords, a sweatshirt, a power converter – had increased in price by a dollar. The presumption, I gather, is that the replacement cost of the items will be greater in the future. It makes me want to scour Amazon for everything made offshore that I know I will need, and buy it now before the price leaps up again.
Published in Economy
You’ve been liberated, James!
cEntRal pLAnNing MakEs oUr liVEs beTTEr
Potentially enormous disruptions to the economy seems like a big price to pay just to permit and incentivize Americans to manufacture the same crap we now get from Temu.
When you sign out from Amazon, go to the Census Bureau “Trade in Goods with China” page here. Because of the table formatting, I can’t reproduce the chart I’m looking at, but the bottom line is that as of January 2025, so far for this year alone we have exported to China $9,901 million and imported from China $31,737 million. That is a whopping trade imbalance. That’s not good for us.
We have a dependency-vulnerability issue in our country, which we saw blatantly during the pandemic. We saw it when the dock workers’ strike was a possibility last fall.
Becoming more self-sufficient will help us avoid some of the bad effects that have accrued from globalization. If we think centralization from Washington is bad, wait ’til we get it at the international level.
I, for one, am happy we’re imposing a 10 per cent tariff on the Heard and McDonald Islands.
Maybe the southern elephant seal and macaroni, gentoo, king and eastern rockhopper penguins (the only inhabitants) will finally get the message!
Heard Island and McDonald Islands – Wikipedia
They’ll jack up the price on the expectation that the replacement cost might go up.
Meanwhile, not all tariffs are created equal. Bangladesh, which produces a lot of readymade apparel for the US market, is looking at a 37% tariff. (Their tariff on US goods has been determined to be 74%.) Sri Lanka also produces a lot of apparel. Their splendidly complex system, with a maximum tariff of 15%, also includes a value-added tax, the Port and Airport Development Levy (10%), the Export Development Board(!) Levy, the Special Commodity Levy (if applicable), the Social Security Contribution Levy*, excise duties, yada yada yada. The Trump Administration decided to adjudge that as 88%, so Sri Lanka is looking at a 44% tariff.
India produces a lot of apparel too. Their tariff right now is 27%. The sun is shining, therefore someone will make hay.
Manufacturers – employers – are already screaming blue murder at their governments in Bangladesh and Sri Lanka.
* I stand in awe of the formulation “contribution levy.” It’s right up there with the dual tax/fine nature of Obamacare.
Setting aside the risk of dependency on something important, if you can get something for 75% off, trust me, it’s good for us.
We never, ever should have traded with the Chinese mafia. We need to give the dockworkers a big fat payout so we can automate. (There, I will accept this central planning.)
I’m not sure our leaders are honest enough and intelligent enough to deal with this.
They force us to use government money, which they are constantly inflating away. I saw a figure the other day that the dollar is worth 50% less than it was in 1998. Are you better off from this? No, of course.
What would happen if you could pick your own private money, which we really can’t in this country? You would pick the one that is deflating all the time, not inflating. Nothing bad would happen from importing cheap stuff that is subsidized or not.
The problem is, you have to change the banking system from fractional reserve banking to full reserve banking.
Nothing would go wrong if we were constantly deflating, except that war requires inflation, and the Chinese are mafia that want to control their own people and the whole world.
So keep buying stocks and housing until it all collapses.
At least one of Ricochet’s tariff defenders will tell you it’s a coincidence. Don’t believe him.
The Ludwig von Mises Institute Is Right About Everything™
I think that scares a lot of people, but it is a mirage. No matter what they say the trade imbalance is with any country, those dollars eventually come back to the United States in trade either from the target country or a third-party country. If they didn’t, we’d be making out like bandits. I don’t even get the idea of a trade imbalance and I don’t see why they think it is such a bad thing.
An irrelevant shopping tip.
Way back I used to work for a major retailer that was being squeezed by Target, Wal Mart and Amazon. Amazon would scrape our website several times a day to harvest our pricing. If you looked up an item first on our website then went to Amazon their price would usually be a few bucks cheaper as they knew what you had researched (cookies) and what we charged. A kind of automatic price matching.
As a test I checked an item on Amazon. Then in a different browser checked our website and our item happened to be lower in price. Then in the same browser went back to amazon and indeed the price was now lower than ours and lower than the one they had quoted five minutes earlier. We did the same to them but our costs were higher so we could only sometimes beat their price. Amazon is so big and convenient now they don’t automatically price match as often as they did before but I think they still do it. So if you are shopping for anything big its good to check several websites and check last with where you intend to place your order.
Sorry for the sidetrack.
I am still astonished (not in a good way) with the tariffs just announced
That is an incredible insight! Thanks for the tip!
I’ve seen that effect many times in the past for hotel and plane reservations.
But they were doing just great at how things were!
Who do we export more to, than we import from? By your logic, there must be someone, probably even several of them. I’ve never seen a list.
Maybe Amazon raised their prices just because they saw they could get away with it, after looking at those other prices?
Yep. I spend as little time as possible worrying what on what my grocer, with whom I have a large and persistent trade deficit, spends the cash I fork over. Trade deficits are as close to meaningless as it gets when it comes to economic statistics, as someone said recently.
The other significant way dollars come back is in foreign investment here. Which leads to an interesting development in logic. One of the proposed reasons protectionism is good for us is that it promotes foreign investment in our country. Another is that it protects our efforts to make stuff here by raising the price of imported stuff, resulting in foreigners having fewer sales and, therefore, less cash to invest in our country. And there you have it: a combination of propositions that is both true and false at the same time. It’s a welcome improvement on the simple contradiction in that it is either true or false, depending on whether you are saying it and it’s convenient to your argument. It’s in quantum mechanics, I’m pretty sure, and a real time saver.
What do you think they should do?
If you’re getting 75% off on what you import, which we do, it doesn’t matter.
Since they are getting dollars, it has to come back to us as consumption or investment.
Maybe Amazon is a gigantic rip off machine because we don’t know how to regulate finance and we have too much inflation. All they do is buy competitors and otherwise do immoral things. At least it’s easy and cheap for the consumer.
I understand the theory, but I’d say that the past few decades haven’t proven it. And it’s ultimately probably not sustainable, but when it stops working it might easily hurt us the most. We may not be able to get cheap gew-gaws from China, but China will still have the warships etc they’ve built with our money.
Here are a couple of lists:
https://brilliantmaps.com/us-balance-of-trade/
https://worldpopulationreview.com/country-rankings/us-trade-deficit-by-country
Some notable countries that the U.S. has a surplus of trade with include, England, Canada (if you subtract the oil we buy which is something Trump covets), Spain, Netherlands, Ukraine, Australia, Brazil and nearly the entirety of South and Central America, half or most of Africa, etc…
I wish Trump would just shut up about this. If you can get it for cheaper overseas, you import it.
You’ve literally not made one specific point here. I will make it for you. We get stuff cheaper from overseas and then the federal reserve can’t accept this so they keep creating inflation. It’s stupid.
Trading with the Chinese mafia is and was patently stupid. We can import deflation from anybody else that isn’t going to attack us.
What better proof is there than the United States having one of the highest per-capita incomes and standards of living than any other country in the world, while the countries that live by high tariffs have much lower incomes and poorer life-styles.
But what about the warships we were able to build from getting cheap goods from China? According to trade theory, we get more goods from them than they get from us.
Are the dollar amounts anywhere near matching imports?
But if China is cheaper…
There can be other reasons for that, including bad religion etc.
Their steel is even cheaper for them, than it is for us.
I’ve said this over and over and over. Our ruling class screwed us. We could have imported deflation from anywhere else.