McDonald's was never sourcing chicken for their chicken nuggets from outside the country.

▲ deeg 6 days ago | parent | next [-]

Tariffs raise the price in tangential ways. Tariffs on Chinese steel means US chicken wire producers switch to more expensive US sources. Increased demand for US sources make it even more expensive. Farmers buy the more expensive chicken wire, passing the added expense to McDonalds, which passes it on to you.

▲ ivape 6 days ago | parent [-]

The chicken nuggets were edging past $5 dollars before the tariffs, during the Biden era. Mcdonalds owns Chipotle so they are well aware of premium pricing for regular food. They applied the same pattern to Mcdonalds, the same way Starbucks once convinced everyone coffee can be as much as $8. This is all before tariffs.

No one's giving tariffs a pass, but we are giving regular people a pass for some reason. It takes people to do all of this.

To further my point, the Gap owns Old Navy and Banana Republic. It's all the same material mostly, but it's tiered pricing (Old Navy cheapest, Gap, to Banana Republic most expensive). Over time, they raised the floor of pricing at Old Navy. Financial engineering is not just happening in the stock market.

The floor for prices on certain things have just gone up with no real reason other than "its about time we raised these prices", and it's happening in a collective way.

▲ aurareturn 5 days ago | parent [-]

  The floor for prices on certain things have just gone up with no real reason other than "its about time we raised these prices", and it's happening in a collective way.

This invalidates every supply and demand theories. I'm unconvinced that you are right.

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disgruntledphd2 5 days ago | parent [-]

In consumer markets, the notion of a rational consumer is a myth.

If we had rational consumers then the world would be very, very different.

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aurareturn 4 days ago | parent [-]

I'm unconvinced that you can get every competitor to agree on a price increase.

All it takes is for one business to see it as an opportunity to lower prices to gain more marketshare for everyone else to also have to lower prices.

	▲	disgruntledphd2 2 days ago \| parent [-]
		> All it takes is for one business to see it as an opportunity to lower prices to gain more marketshare for everyone else to also have to lower prices. This would again, be true in a very simplified world. A lot of the time your suppliers have committed to provide X widgets by Y date at Z place, and it's not trivial to swap out A widget provider for B widget provider. And this is the easy case, how much would it cost to rebuild all your LLM based tools with Anthropic after building on OpenAI. So, yeah in theory it requires perfect co-ordination but really if there are 4 big suppliers and 3 increase price, their profits will increase and the CEO of the other will probably be fired by the board.

▲ myrmidon 6 days ago | parent | prev [-]

Yeah, but that does not really matter; everyone else that imported meat (or feed ) now competes for McDonalds suppliers, which means higher prices.

You can also expect to pay more for labor itself, because every bit of industry that you bring back (or scale up, at least) with tariffs competes with the essentially fixed labor pool, and there was not a lot of slack (unemployment) to start with.

	▲	skirmish 5 days ago \| parent [-]
		Fast food prices jump a lot whenever minimum wages increase. I am convinced this is a major contributor to McDonald's price rise.