Advantages and Disadvantages of Tariffs - Pros and Cons

Latest update: April 21, 2021. Page URL indicates original publication date; meanwhile, times change and the updates continue.

World Retaliatory Tariffs Against US and the Resulting Deflation for Agricultural Products

Important Note. This entire prediction is based on there being an honest marketplace. However, due to monopolies and semi-monopolies using tariffs as a make-believe excuse to raise prices on domestic American goods in parallel with the foreign goods price increases, virtually all consumer prices may be raised. [Update. This is indeed what has happened.]

Original Prediction

Due to the retaliatory world tariffs against US products, world demand for US products will drop, thus domestic supply will increase. What does this mean for the US consumer regarding those products?

It is a basic law of supply and demand: when demand drops and supplies remain constant or increase, prices drop. Hundreds of American products will be affected directly. Thousands of products will be affected indirectly. Domestic prices will gradually fall for those products as the effects of the tariffs moves through the supply pipeline.

This page was originally published June 2018 (do read the updates as well). At this point, the above must be considered as a prediction; though it can be considered as a pretty reliable prediction. After all, the basic laws of supply and demand have been a proven fact since the beginning of capitalism. This page will be updated as things progress. And needless to say and in order to benefit, one will need to Buy American. This shouldn't be too hard, since those products will be the ones with the lower prices.

For reference: Bureau of Labor Consumer Price Index Page.

September 2018 Update:

It all depends on an honest marketplace. And there's the increased revenue to the federal treasury from the tariffs. However, it all depends on how capitalism is practiced in the US; admittedly, there has been so much corporate thievery that I have no idea what is going to happen.

January 2019 Update:

Looks like things have calmed down, leastwise as far as international relations. However, it does look like the meat industry is pulling a fast one. Even though international demand has decreased, thus increasing the domestic supply; beef prices still remain inflated.

April 2019 Update:

Well, well. Meat and farm produce prices dropping for the US consumer. I have experienced this personally as well as seeing media reports about it.

September 2019 Update:

Yep, meat prices remain lower. Farm produce should also be lower. Canned goods should also be affected and slightly lower; this being due to tariffs relating to the manufacturing component.

January 2020 Update: Grocery prices have been rising in my town. However, this may be due to a certain supermarket chain having a monopoly where I live. The latest, national CPI index is due out on the 14th; see the above Bureau of Labor Consumer Price Index link.

February 2020 Update: Sure enough, national food prices have increased. This is in direct contradiction to the basic laws of supply & demand. I suspect that wholesale prices have remained constant or even decreased, but the grocery stories are keeping the extra profit for themselves as opposed to passing it on to the consumers. Here is some other data from the government CPI website regarding the last 12 months:
  • Prices for five of the six major grocery store food groups are higher for early year 2020, as compared to a year ago.
  • Prices for dairy and related products are 2.4 percent higher for early 2020, compared to a year ago.
  • Prices for meats, poultry, fish, and eggs are 2.3 percent higher for early 2020, compared to a year ago.
  • Prices for nonalcoholic beverages are 1.0 percent higher for early 2020, compared to a year ago.
  • Prices for cereals and bakery products and for other food at home are 0.3 percent higher for 2020, compared to a year ago.
If it wasn't for the tariff effect, the above percentages would probably be quadruple what they are now. Meanwhile,
  • Prices for fruits and vegetables fell 1.3 percent, compared to a year ago. Prices for fresh fruits and for fresh vegetables also declined, compared to a year ago. At least some of the savings were passed on to the consumer for this category.
May 2020 Update: Well, the whole COVID-19 situation has certainly turned the tariff situation into chaos. Also and unfortunately, grocery stores are realizing that they can get away with much higher prices. I strongly suspect that those prices will never go back down.

April 2021 Update: News media is reporting we are going to get clobbered by inflation this year.

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