Everyone has been repeating this for months but inflation remains relatively normal so prices are not rising. Maybe it's a delayed effect that we won't see until later in the year, but at this point it is a theory and far from a fact, not something that needs to be repeated.

We have already observed that the opposite does not hold - in 2017 we slashed corporate income tax by 14% across the board, roughly the same as the tariffs but with far more surface area, and yet prices did not react and the benefits were not passed along to the consumer.

All we _know_ right now is that this is going to negatively impact economic growth by hitting corporations, the same way slashing corporate income tax positively impacted economic growth by benefitting corporations.

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marcosdumay 2 days ago | parent | next [-]

Tariffs don't inherently cause inflation.

The noise about inflation is very likely propaganda trying to focus people on something that the government can control. (Yet, it looks like the US government is giving up on controlling it.)

Instead, tariffs have complex effects on the real economy. Universal tariffs do cause the concentration of wealth the GP was talking about (but it's way worse than the GP's claim) and deindustrialization. Inflation may or may not happen, it's not a given.

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freen 2 days ago | parent | prev [-]

Companies have reserves, local stock etc.

Fixed prices are a bet on TACO and hoping to avoid the orange rage: see what happens when you blame price increases on tariffs.

Lots and lots of bribes have been paid. This is yet another.

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cuuupid 2 days ago | parent [-]

We will definitely see but it's still a theory at this point, and one that has not played out the other way in the past with a reduction on corporate tax _across the board_

> Fixed prices are a bet on TACO

Having been part of some of these conversations it's mostly a bet that democrats will win back control sometime in the next decade and do a full reversal. When that happens, you don't want to be caught out with less market share because you adjusted your prices to maintain your bottom line. Same logic as startups burning VC cash on offering free compute, 80% discounts on tokens, etc. to grab market share.

If you're in an elastic market, your priority is not to maximize profit, it's to make the market inelastic.

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ethbr1 2 days ago | parent [-]

It's not a theory -- every business that imports product from international sellers is staring at their current import prices and their remaining pre-tariff inventory numbers right now. (See the huge import volume burst pre-tariffs)

What they're trying to decide is (a) do they eat the cost of tariffs in margin or (b) do they raise prices?

That's a decision that doesn't need to be made until they burn through warehoused inventory, but for high-volume businesses (read: retail) it's measured in months at most.

Once that hits, either (a) or (b) will be chosen, and neither is great for equities markets / the economy.

Moreover, there's no "hiding this under the rug" once publicly traded companies begin to report quarterly financial results AFTER burning through their pre-tariff inventory. They can't not explain to their shareholders why they've taken a hit to profitability.

Best possible case is retail prices rise, once, by the amount of tariffs, and that's that.

But a 15%+ price hike is going to be an uncomfortable narrative for those in power who insist tariffs won't raise prices... so I'm not betting that conversation goes logically.*

* See the reaction part of Amazon got when they "accidentally" line-itemed tariff charges as evidence on how dangerous the administration sees transparency around tariff costs

	▲	Scoundreller 2 days ago \| parent [-]
		> But a 15%+ price hike is going to be an uncomfortable narrative for those in power who insist tariffs won't raise prices... so I'm not betting that conversation goes logically. As someone selling on eBay from notUSA, the cost increases won’t just be the tariff, but some additional fixed and variable fee for the privilege of determining the tariff and potential loss of the cheapest shipping options. Friction begets friction!