Is Amazon in deep shit? I am reading in multiple places that 75% of their products are made in China. When the tariffs come...
🗣️ DISCUSSION 💬
https://www.foxbusiness.com/markets/amazon-americans-products
No wonder Bezos is kissing Trump's ass. Remember that Amazon doesn't actually produce anything.
Let's make stuff in America again.
That includes popcorn. And I need to go buy some more.
Not how tariffs work if done correctly. China has low labor costs. But so do several other countries. So that makes China eat most of the tariff costs. Otherwise customers will shift countries. For some things, there is a spin up time in the other country, but they are hungry for the business. And once it leaves China, it is not likely to return.
When you look at tariffs, you have to look at the much larger picture of actions and reactions. If done correctly, there is very little impact on inflation. And that will be more than offset by the domestic moves that Trump is making.
Companies will sell for the highest price they can get away with. If you're competing with the US, China really only needs to be slightly cheaper despite much lower energy and labor costs, maximizing profit.
If tariffs go up, you still have to be competitive with US (or any other place of origin) producers. Manufacturers will eat the tariff themselves rather than price themselves out of the market.
China's economy does not follow market rules. It is a centralized economy where the government will subsidize losses in order to create market share. Once they monopolize market share and destroy the competition, they then raise prices and use that market share as a political weapon. Thank goodness the US is finally starting to wake up and see what the CCP is trying to do to the rest of the world before they destroy more industries here in the US beyond what they have already done - like our steel manufacturing. Trump has been trying to reverse all that and rebuild our manufacturing base - or at the very least get it out of China and closer to home.