Tractors and (upcoming) tariffs?

[jyoutz]

If through Chinese or other foreign proxies, it makes perfect sense. If it's done as a deterrent for illegal immigration and helps to secure our border with both sex trafficking, terrorists, and drug transportation it also makes sense....

remain in Mexico worked and was only accomplished through a threat of tariffs.

Buckle up and be cautious on investments. This would have a huge effect on US companies.

 

[rider89]

It appears we are soon going to have tariffs of 20% and more on anything imported from anywhere.

What does this mean for us here at TBN?

Unless tractors, accessories, attachments and parts get an exemption ("necessary services" or something), prices of imported tractors are going to go up by at least 20%. If we finance, payments will go up, since the tractors cost more, insurance (if applicable) will also go up.

Prices for used tractors will also go up (as if they aren't high enough already), just like the prices of used cars rose almost in lock-step with the increased prices and limited availability (from Covid) did on new cars.

As tractors become more and more expensive, we will either keep what we have longer or if we are in a business that relies on tractors, we will have to raise our prices when tractors and parts become significantly more expensive. Fewer tractors will be sold, because WE don't get a 20% raise to compensate for the 20% price increase from the tariffs.

Anyone who uses a tractor as a service (land clearing, mowing, etc.) will also have to raise their prices because their costs just increased.

This all means higher prices for lots of people, many of whom don't even realize there is a tractor somewhere in the "food chain" of goods and services they buy.

This affects Kubota, Kioti, Mahindra, some John Deere, and others. Deere moved part of their production to Mexico to keep the retail price down, and if they decide to come back, their prices will have to go up.

The issues with across the board tariffs are that they increase the cost of anything imported and WE pay these tariffs, not the manufacturers. Tariffs are a tax on US, and they are intended to discourage us from buying imported things, whether or not those things are even produced or available domestically.

A further problem is that when a domestic manufacturer is protected by arbitrary tariffs, they have ZERO incentive to improve their products (because there is no competition) and their prices can rise (again, because there is no competition). You may recall the "invasion" of Japanese cars in the 80s - Detroit had become totally complacent, and protected by tariffs, continued making and selling the same crappy cars they had been making for years. Eventually, they all went broke and had to be bailed out by the government, using OUR tax dollars to do it. (Yes, they eventually paid back most of the loans, and lots of jobs were saved. We may have to do it again because the current crop of Chinese electric cars are very good indeed, and amazingly inexpensive because they often are subsidized by their government.)

Arbitrary tariffs are a mistake. There is, however a rationale for targeted tariffs. If an overseas company is "dumping" their product at or below cost to put a domestic competitor out of business, that is a legitimate reason for a tariff. Interestingly, if it two domestic companies engage in a price war, there is no law against that, and in fact, it happens all the time.

After WW2, the US was the only real market for anything, nobody else had any money and they were busy rebuilding from the war. Now, however, there are lots of countries that can afford to buy imported stuff, and it might be very tempting to a tractor manufacturer (and not just to tractor manufacturers) to abandon what they see as a "hostile" market and sell to customers around the world instead.

Some of them MAY establish factories here, as Honda and Toyota have done, but some of them are simply going to say the US market just isn't worth the trouble and sell elsewhere. Establishing a local factory isn't done overnight, either.

In the interim, we'll have higher prices (new and used) and a narrower selection.

There is an old Chinese curse - "May you live in interesting times." We do.

(Kevlar and fireproof suit on!)

Best Regards,
Mike/Florida

The other side of the tariff subject that people often forget is that China has very high tariffs on imports from the USA, and probably many other nations. Potential new tariffs on Chinese goods coming to the USA is a possible way to negotiate China tariffs into a more equitable status. Another (little known?) aspect of the tariff subject is that there are already tariffs in place right now, so this whole subject is not new ground (as implied by the news). Many of the tariffs listed were enacted this year. From Microsoft Copilot Search:

As of now, the United States has implemented several tariffs on Chinese imports. Here are some of the key tariffs currently in place:

• Electric Vehicles (EVs): 100% tariff
• Semiconductors: 50% tariff, effective from 2025
• Solar Cells: 50% tariff, effective from 2024
• Syringes and Needles: 100% tariff, effective from 2024
• Steel and Aluminum Products: 25% tariff, effective from 2024
• Lithium-ion EV Batteries: 25% tariff, effective from 2024
• Personal Protective Equipment (PPE): 25% tariff, effective from 2024
• Rubber Medical and Surgical Gloves: 50% tariff, effective from 2025, increasing to 100% in 2026
• Natural Graphite and Permanent Magnets: 25% tariff, effective from 2026
• Other Critical Minerals: 25% tariff, effective from 2024

 

[Alan46]

I haven’t read many of the posts but it looks like the country got what it asked for!

 

[350c]

Muhammad is correct - his playground, his rules.

A friend I worked with was named Robert. He started his training meetings stating: "In this meeting, we will be following Robert's Rules of Order--I'm Robert and I make the rules!" Worked like a charm.

 

[JasperFrank]

The other side of the tariff subject that people often forget is that China has very high tariffs on imports from the USA, and probably many other nations. Potential new tariffs on Chinese goods coming to the USA is a possible way to negotiate China tariffs into a more equitable status. Another (little known?) aspect of the tariff subject is that there are already tariffs in place right now, so this whole subject is not new ground (as implied by the news). Many of the tariffs listed were enacted this year. From Microsoft Copilot Search:

As of now, the United States has implemented several tariffs on Chinese imports. Here are some of the key tariffs currently in place:

• Electric Vehicles (EVs): 100% tariff
• Semiconductors: 50% tariff, effective from 2025
• Solar Cells: 50% tariff, effective from 2024
• Syringes and Needles: 100% tariff, effective from 2024
• Steel and Aluminum Products: 25% tariff, effective from 2024
• Lithium-ion EV Batteries: 25% tariff, effective from 2024
• Personal Protective Equipment (PPE): 25% tariff, effective from 2024
• Rubber Medical and Surgical Gloves: 50% tariff, effective from 2025, increasing to 100% in 2026
• Natural Graphite and Permanent Magnets: 25% tariff, effective from 2026
• Other Critical Minerals: 25% tariff, effective from 2024

Supermodel brides from Slovenia? Trump didn't think this entirely through.

 

[350c]

Generally speaking, inflation is caused by too many dollars chasing too few things. Example is homes. We're short something like four million single family homes right now, so homes get sold to the highest bidder. If we had a surplus of homes (rust belt Detroit, for instance) homes can be bought for a dollar. Some places in Italy offer homes for a Euro, everyone has left and the towns are dying.

Another example is the price of used cars recently. Not enough new cars (chip shortages, etc.) so money flowed towards used cars, and the prices rose because of the increased demand. This has abated somewhat, but used car prices are still historically high.

The government can be a cause of "too many dollars" by running the printing presses. (You see how well that worked out in Germany in the 1920s.)

OK, so lets see where we can cut government spending. A big chunk of government spending is "entitlements" such as social security and Medicare. Cut social security and see how quickly that government is gone . . . cut Medicare, ditto.

Then we have defense. Do we want a strong defense? Heck yeah we do, nobody will argue that. Problem is all this stuff is expensive, really, really expensive.

Then we have debt service. People buy US debt obligations (treasuries, savings bonds, etc.) because they KNOW they are going to get paid timely. If Uncle stops paying, nobody will buy these any more (yeah, he's a deadbeat, doesn't pay his bills) and that is the END of funding the government.

The above makes up something like three quarters of the entire federal budget. We still need small details like highways, the FAA, and a blizzard of other alphabet agencies, thousands of government employees, government buildings which need to be heated, cooled, maintained and and and and, so guess what, Uncle Sam is living beyond his means, and like many of the rest of us (see the definition of "peons" a page or so back), he's putting it on credit cards.

OK, how can we fix this? Cut spending significantly - where? Raise taxes - cue screaming. Tell China and Russia we'd like to take a year off on military spending - they'd just LOVE that.

What we need to do is grow our economy. We need more businesses to hire more people and increase our tax BASE, not our tax RATE. We need to operate our existing economy more efficiently, and we need to grow it significantly.

Right now, the National Association of Homebuilders says the average price of a home in America is $400,000, and one quarter of that, $100,000 is paperwork, red tape, regulatory compliance and so on. If we could cut that $100K in half, that house suddenly became more affordable.

Here's another example. I needed a topo survey on a project I'm working on. NASA and NOAA have topo surveys of the entire country, free to download (we paid for them in our taxes). Local county has them too, also free downloaded from NASA/NOAA (we paid for them in our taxes, too.)

Local government won't take them without an engineer's seal (P.E.), NASA, NOAA and the county aren't good enough. Engineer downloads them (free), takes his seal, goes crunch, that'll be $1,000 please. City looks at the seal - not at the survey, just at the seal - checks a box, and nobody will EVER see that piece of paper again even when the sun swallows the earth in four billion years or so.

Multiply that by the 4,000,000 new homes we need to build - I ought to become a P.E. and hire people just to crunch topo surveys at a grand a pop.

This isn't (entirely) the fault of the P.E., it is just a dumb, useless no-added-value requirement which is there because "we've always done it that way".

Want to balance the budget? (Or even show a SURPLUS? As the kids say, OMG!) Grow the economy, increase the tax base but not the tax rate, and get rid of a PILE of useless, outmoded rules and regulations that do nobody any good but waste everyone's time and money.

And do have a happy Thanksgiving - be thankful we are not getting all the government we are paying for ;-)

Best Regards,
Mike/Florida

I agree with much of this post, but I'm one of those receiving SS and on Medicare but that doesn't mean I don't want to see those programs under intense scrutiny for waste, fraud and abuse. An entire program does not have to be scrapped to make it more efficient...or honest. The same can be said for defense--you say those things are really expensive, but why? Why should a toilet cost $$$$, a hammer $$$? Mostly because so many accept "that's just the way it is". Your suggestions for growing the economy are spot on, but there is need to reduce wasteful spending at the same time.

 

[arrow]

The other side of the tariff subject that people often forget is that China has very high tariffs on imports from the USA, and probably many other nations. Potential new tariffs on Chinese goods coming to the USA is a possible way to negotiate China tariffs into a more equitable status. Another (little known?) aspect of the tariff subject is that there are already tariffs in place right now, so this whole subject is not new ground (as implied by the news). Many of the tariffs listed were enacted this year. From Microsoft Copilot Search:

As of now, the United States has implemented several tariffs on Chinese imports. Here are some of the key tariffs currently in place:

• Electric Vehicles (EVs): 100% tariff
• Semiconductors: 50% tariff, effective from 2025
• Solar Cells: 50% tariff, effective from 2024
• Syringes and Needles: 100% tariff, effective from 2024
• Steel and Aluminum Products: 25% tariff, effective from 2024
• Lithium-ion EV Batteries: 25% tariff, effective from 2024
• Personal Protective Equipment (PPE): 25% tariff, effective from 2024
• Rubber Medical and Surgical Gloves: 50% tariff, effective from 2025, increasing to 100% in 2026
• Natural Graphite and Permanent Magnets: 25% tariff, effective from 2026
• Other Critical Minerals: 25% tariff, effective from 2024

The current administration kept $18 billion worth of tariffs on China left over from the Trump admin.

 

[350c]

Actually Social Security is an entitlement. The definition of entitlement payments implies that only certain people are entitled to benefits. In the case of Social Security, only people who contributed to the program for the required number of quarters are entitled to benefits. I don’t know why an entitlement is looked upon as something negative.

So can you definitively state that "only people who contributed to the program for the required number of quarters are entitled to benefits." are the only people being paid from SS funds? From this, can we be assured that there is no fraud occurring with SS funds? That NO ONE is receiving benefits who did not contribute the required number of quarters? It would be nice to know that is true.

 

[350c]

Some more interesting information about US/Mexico trade:

“Two-way trade in goods and services between the United States and Mexico totaled USD 863.4 billion in 2022, positioning Mexico as the second-largest overall U.S. trading partner. During this period, U.S. exports to Mexico totaled USD 362.7 billion and imports from Mexico totaled USD 500.7 billion (deficit of USD 138 billion). This large volume of trade directly and indirectly supports millions of U.S. jobs. Mexico is the first, second, or third-largest destination for merchandise exports from over 30 U.S. states. Top U.S. goods exports include electronics, vehicles, fuels, minerals, plastics, and machinery. Mexico was the second-largest export market for U.S. agricultural products in 2022, with total U.S. agricultural exports to Mexico valued at over USD 28 billion.

Mexico is the 17th-largest investor in the United States, having amassed a total stock of USD 54 billion at the end of 2022. U.S. affiliates of Mexican-owned firms in sectors such as food, communications, plastics, metals, auto components, and business services employed 85,700 U.S. workers in 2018 (the most recent year for which figures are available). Over the last 20 years, U.S. and Mexican supply chains have become increasingly integrated and production sharing —with intermediate steps in the creation of a final good taking place on both sides of the border— is now commonplace. Recent trends in nearshoring following the COVID-19 pandemic have strengthened this integration.”

U.S. Department of Commerce

Let’s build this relationship and reduce Asian imports.

And how do we take into account the influx of illegal drugs that kill US citizens (many of whom are children), the trafficking of women and children, the flow of illegal aliens from and through Mexico, etc., with which the Mexican government is complicit in their lack of serious intervention or control of drug cartels in their own country? It's a shame that money is what speaks most, but the tariffs seem to get more attention than diplomacy ever has.

 

[350c]

Go ahead and post a thread about politics that you think fits my "narrative" and see what happens. Then you won't have to wonder anymore.

I like your style!