This article has specific furniture examples, but the idea translates to all imported goods.
Expect to Pay More for Everything
The Wall Street Journal reports Your Patio Furniture Set Is Going to Cost a Lot More This Summer
Sunnydaze Decor sells affordable outdoor furniture, fire pits and flower pots on Amazon.com, much of it made in China. The costs of the Trump administration’s new tariffs have kicked in on many of those items, so Chief Executive Chuck Gregorich is rolling out higher prices in June.
Gregorich has paid a tariff on products made of steel since 2018, when Trump put a 25% levy on imports of the metal.
Now, he must pay a 20% tariff on goods from China, and an additional 25% tariff on imports containing steel. Because this bistro set is subject to the newest steel tariff, it is exempt from the reciprocal 10% tariff on Chinese goods.
Gregorich plans to raise the price of the bistro set to $305, which will also boost the costs due to Amazon.
Wicker Furniture
Parts of this set contain steel, so Gregorich pays the 25% steel tariff from 2018, as well as the new 20% tariff on imports from China.
The set is also subject to this year’s new steel tariff, which is based on the amount of steel contained in a product. In this case, the wicker furniture set’s frame is made of $90 worth of steel, so the 25% duty is assessed on $90.
Factoring in other costs, Gregorich will lose money if he keeps the price steady. He plans to raise it to $686 to cover the additional tariff costs, as well as increased Amazon fees.
Expect Price Hikes Across the Board
Walmart and Target have already announced price hikes to Trump’s Ire.
Trump publicly blasted Apple and Walmart in nonsensical rants. The irony is stunning because he now sounds like Elizabeth Warren.
Forget About Fed Rate Cuts
- Unless we see a collapse in jobs, the Fed will be on hold.
- The odds of a rate cut in June are down to 5.6 percent from 63.3 percent a month ago
- The odds of a single rate cut in July are down to 25.1 percent from 92.1 percent for more than one cut month ago.
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May 23, 2013: Trump Commands Apple to Make iPhones in the US or Pay 25 Percent Tariff
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Ninja Foodi Pressure Cooker Recall: 1.8 Million Units Recalled Over Burn Hazard | Lawsuit Legal News
The cookers were made in China and sold for about $200, from January 2019 to March 2025, across the United States at Walmart, Costco, Sam’s Club, Amazon and Target.
There isn’t any way to delete a mistaken post here except to overwrite it inside the edit window!.
no doubt tariffs will increase prices. My math shows that the two examples provided the retailer is increasing the price in excess of the tariff.
I don’t know how that is possible. Trump says that the other country pays the tariffs. Is it possible that he is lying?
Tariffs are just beginning to hurt the US economy. It’s going to take time for the damage to accumulate enough to cause a recession later this year.
And that’s with a 90 day pause on the higher tariff rates that Trump announced on Liberation Day.
As always, I expect NO comprehensive trade deals to be signed. Just a couple of minor, insignificant agreements which Trump will claim are “big wins”; “great deals”.
The overall trade deficit will not be impacted in a meaningful way, unless it happens to shrink due to a recession.
The trade deficit will be impacted by tariffs. 100 percent of the tariffs Go to to the government, if a iPhone cost the consumer an extra 500 dollars lets say that 500 dollars goes directly to the government deficit
You are confused.
The “trade” deficit is not the same thing as the “government” deficit.
In isolation, a $500 tariff paid to the government on an imported $1000 iphone will reduce the government deficit by $500.
But importing a $1000 iphone (in isolation) will increase the trade deficit by $1000.
Imo employment. We are short worker because of the aging boomers retiring. But a good chunk of those boomers are the first/ second generation to have retirement savings. In typical boomer style they are spending that generational wealth and screwing their kids. So the economy seem stronger than it is.
As Warren Buffet said: Give your kids enough so they can do whatever they want; but not so much that they can do nothing.
I made sure my kids got a good work ethic, a good education, and helped them get set up with careers and houses. The rest is up to them. I expect them all to do better than me.
Which leads to more inflation. Will the FED try to get ahead of the curve this time and increase interest rates sooner rather than later?
Homeless vagrants don’t buy much furniture.
dumpster diving tip: get a long pole (a crutch will work) so you can poke into the dumpster and access whether something is worth diving for
you might find the old Merv Griffin set.
We already pay more for stuff we import due to how we have handled the trade deficit. Hasnt the amount of dollars leaving the country to buy imports exceeded the amount of our exports for a long time? And how has congress dealt with that? By printing more money debasing the dollars value, leading people to hoard assets like houses, fueling expensive housing, in turn pushing up labor costs, other services. So while the tariff situation is a mess, we need to figure out the trade deficit somehow.
It is curious that the retailer would be so forthcoming with these numbers. The profit margin on the first item is slated to increase by nearly 1/3 and the profit on the wicker item will be almost 3/4 larger — both exceeding and the latter dwarfing the percentage of nominal price increase.
Advertising that your gain will, proportionally, be so much larger than the increase of your input cost will impact potential sales if any of their customers are paying attention.
As I posted above, I think you are misreading the chart.
In item 1, the margin was +34 and it’s going *down* to +6 which is a decrease of roughly 80%.
The grey part of the chart is not retailer profit. It’s all the *other* expenses on the item (shipping, storage, advertising, multiple middle men before the final retailer etc).
No, not misreading it. In the first chart the total cost for the retailer increased $28 but the proposed new retail price increases $46.
What you are referring to is profit relative to the original price, but the retailer is not holding the price steady and they are increasing their profit margin to boot.
“The grey part of the chart is not retailer profit. It’s all the *other* expenses on the item (shipping, storage, advertising, multiple middle men before the final retailer etc).”
Correct
I was damn confused by the chart too. That is why i modified it, adding dotted lines on the first chart to show profit.
The original graphic was not overly confusing, but the new version is more clear.
The point that I and another poster made about the retailer increasing their margin is valid and it does raise the question of what their motivation is for publicizing that fact.
To coin a term, this would be ‘tarifflation’: price increases above and beyond increases due to tariffs alone. Shrinkflation is latent but in this case tarifflation appears to be advertised.
Market soars after Trump delays 50% tariffs. Consumer confidence soars after Trump backs down on tariffs.
What a way to goose the economy. Threaten to kill it and put everyone on edge, then put the gun away and everyone cheers.
Yay! We’re not going to get shot! At least not yet!
NVDA fantasia on Wed. 5/28
We no longer have investors but gamblers and speculators. It is always about the $$$ and will do whatever it takes to get it. After all, the regulators are being fired (for all the good they did). The casinos are open for business. Place your bets on red or black and spin the wheel. Sure beats having to work for living as in the past.
That’s how we got the 2008 great financial crisis and that’s also how America works, anything for money. If you’re not profiting off of someone else, they are profiting off of you. If you’re not the predator, you’re the prey.
We all know something is going to break and cause the bubble to burst again, it’s just a question of when and how.
Finally, I can see the plan. Delay tariffs by 3 months indefinitely.
Works great if you are in scammy RE or casinos. If only the world understood this 4d chess.
In the meantime, governments come and go because of tariffs, unfortunately to the wrong side.
Trump has this game down to a science. He scares everyone. Then backs off while likely frontrunning the market. Wash, rinse, repeat. Get richer.
Most sofas, chairs, mattresses, showers and home insulations are oil products. When oil is down producing industrial products are more profitable. Buy a $6,000 mattress, start paying later. The cost of labor, transportation and dumping junk are high.
There was nothing like a cast iron bathtub.
Conversely, did anyone notice that Q2 GDP is back positive & shot up to above 2%?
I think there are 2 groups of furniture buyers who probably won’t be affected much: Amish and Room&Board.
The End Of America As The Essential Consumer Nation
https://www.ianwelsh.net/the-end-of-america-as-the-essential-consumer-nation/
Good.
Interesting in both these examples the proposed new price not only includes the price of tariffs but a very healthy profit increase for the retailer. From $34 to $52 in example 1 and from $28 to $55 in example 2.
I think you misunderstood the charts.
The profit (loss) for the retailer is clearly labelled
In Chart 1 (metal set) it was 34 and goes to 6
In Chart 2 (wicker set) it was 28 and goes to -32 (selling at a loss if they sold at that price)
In other words the grey area is not just retailer profit.
Yes, I made that change to the first chart.
That’s if they sell it at the same price, but they are proposing to increase their sale price by $46(259->305), so the profit would increase from 34 to 52.
It’s possible the extra difference is in compounded taxes along all the various stages after import.
Seems unlikely many retailers will be able to extract *more* profit margin given how competitive these industries are (you can order this stuff online from anywhere so local places can’t cheat you with higher prices).
Florida family was left with $700K in damages after Costco fridge ‘free’ installation turned into a nightmare.
Florida family was left with $700K in damages after Costco fridge ‘free’ installation turned into a nightmare
Third party contractor.
Water hookup to fridge.
Nobody would ever want those metal or flexible plastic ice trays in the freezer and trust their water out of the kitchen faucet, right?
Advantage of Fridge is it gets an extra level of filtration. Helps a lot with taste (and presumably water quality too).
I had a similar incident in my home a couple years ago with a replacement water/dryer where it was unhooked a day early in prep for the new stuff to arrive. Ended up with 100K worth of insurance money to repair things. I didn’t read whether they had insurance but if they did, it should be covered.
What’s the point of this post? How does it relate to the topic subject?
This is what insurance is for. Someone’s insurance is going to pay for the damage, whether it is the homeowner, the contractor or Costco. [shrug]
….aaaaaAAAAAaaand: they think that we believe this shit about improving America. Inflation is the WORLD’s biggest challenge and TrumpCO so far seems to think that we will not notice?
Plastic yard bag. Fill with leaves. Viola’ – bean bag chair.
Garage sales, flea markets, estate sales etc. There is so much STUFF floating around out there. Stuff hardly used.
Voila!
Shopping is a regular activity for bored people. Buying stuff temporarily distracts people from their generally meaningless lives.
Buy the cheapest you can get. The sooner it breaks down and has to be junked (not repaired, that’s close to impossible), the better it is for the economy.
“Stainless steel” veneer appliances vs. those prior to that “innovation” back ~ 25+ years ago.
Poor Walmart and Target. @ss cracks and bathroom intrigue.
Chinese muffler, lasted a year. But warranty. Wonder how long they can warranty before someone loses money. 2,3,4 mufflers? Their cost to make close to nothing.
Who paid the labor? You or the warranty?
Everything always looks good on paper. Why should this be any different.
I wanna ask the poignant question: “Do inflation expectations matter?”
But as a long-time reader I’m just being punny (since you put them together in your headline).
Actual inflation has been higher than reported and perniciously finding itself everywhere for a long time. It’s a not-so-silent destroyer that stomps the middle class and would completely destroy the lower class if not for the skew in public policy that keeps that event from actually occurring–thus the middle class nearly becomes joined to the lowest economic class in reality.
Pernicious.
Mish just did a post on inflation expectations, which matter not.