Tariff Talk

How much one is currently aware of President Trump’s tariffs regarding their own pocketbook is probably dependent on if you purchased any larger items that were individually affected. As new trade deals come through, though, with more definite “final” numbers, though, it looks like it is bound to become a more universal issue.

After all, what is more universal than Walmart, whose CEO recently said that the company is bound to not be able to absorb all the tariff cost, which is going to slide down to the company’s customer base.

The President then called for companies to “Eat the Tariff.” And who knows, maybe a giant like Walmart could afford to. I am not going to play pundit, pretend that I have a view into the company’s books, and calculate just what it would mean for it to pick up the full cost. At the same time, though, Walmart is a company that operates by discounting prices to the consumer, giving them small profit margins on individual items, relying on how many items are being sold over how much it is making on each one.

And it’s not going to be just giant companies that must deal with this. It looks like it will be pretty universal that if anyone is purchasing anything coming from another country, it’s going to soon cost more than it did at the beginning of the year. It’s impossible to think every company in the country is in a spot to be able to survive that without raising prices.

This isn’t a political statement – heck that Walmart CEO is bound to be a fan of many things that Trump does – but the math is undeniable. This is, however, a statement that even after a lot of discussion and praise/hatred of the president’s tariff plan has worn off, much of its impact is still going to be forthcoming. Thankfully we do have this forewarning, though, that can help us prepare for it.

So, no matter what you think about how these policies will eventually shake out, no matter if you think it’s terrible policy or necessary for future survival, do not let yourself be caught unaware. Rhetoric can only take things so far, do not hide from real-world implications. 

Warmly,

Josh Bousquet
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