That and there are second-order effects. If your business ordered a bunch of shit prior to all of this, and it’s now coming into port you may say “fuck it, send it back” or you may decide to accept it, eat the tariff, and preemptively increase your pricing on your future finished landed goods because you are now having to factor in pricing instability of the input components/materials.
Likewise, during the several months period of fluctuation, many businesses likely made a reasoned decision to stop ordering for the future because they don’t know if the market will tolerate them having to increase their prices by that much and they can’t afford to sit on inventory they will never sell. So even if the government declares “ha just kidding” and completely abandons tariffs today, there could be a period of 2-5 months where many products aren’t available because industries paused proactive ordering based on projected demand.
Another second or third order effect, depending on exactly how you class it:
Lots of smaller, more specific product segment oriented businesses?
Well, the smart ones ordered a bunch of supply at the end of last year or beginning of this year.
Which means their smaller ware and storehouses are fuller than normal.
Which means they… assumed demand would more or less remain steady.
Which means they took a big expense some months ago, maybe covered it with a loan.
Which means the Q4 24 and Q1 25 quarters are actually pulling forward from the rest of the year, which means we will actually GDP fall from… the baseline prior to that, not after that.
… And
ifwhen the economy generally tanks, and demand falls through the floor…Well, some of them will survive.
But many won’t.
Even though they did the arguably smarter thing, they’ll still have to cut hours, do lay offs, even though the bosses told their workers that they didn’t get a Xmas bonus… so that they wouldn’t have to lay them off or cut their hours.
…
Beyond that, remember when the Ever Given got stuck in the Suez?
And… if you knew anyone in logistics… shit was back ordered and fucked up and people were paying premiuma for priority shipping that was still late, and dock processing times and land tranait schedules were fucked because everyone kept changing plans last minute?
Oh just multiply that level of chaos by 100 or 1000 or so.
Nbd rofl.
…
… As someone with a basic Econ degree, I always find it hilarious how often the highly praised and glorified ‘small business owner’… is actually pretty much ignorant of most basic economics.
What is it, 95% or 99% of small businesses fail within the first year? Just like how 99% of Youtubers or Tiktokers or OnlyFans people make essentially no money?
Nobody bothers to look into any of that though, oh well.
At least succesful Youtubers / streamers are generally aware of the fact they’ve won the lottery.
Small business owners on the other hand are usually the most self righteous ass hats I ever meet: We’re a
abusivefamily business!(though there are of course exceptions to that)
Always good to read something by someone who actually understands how business works.
