Trump team wildly underestimated the costs of tariffs

[Yo_Mama_Been_Loggin]

When the Department of Commerce opened up the section 232 tariff exclusion request process in March, they did not expect it to be so popular. They did not expect that so many manufacturers in the United States would ask for an exclusion from the 25-percent and 10-percent tariffs on steel and aluminum. They were wrong.

At the time of its announcement earlier this year, the Commerce Department estimated that it would receive 4,500 exclusion requests from the steel tariff and 1,500 from the aluminum tariffs.

Fast forward to today. U.S. manufacturers so far have filed over six times that amount and are still filing. Commerce wildly underestimated the number of exclusion requests they would receive.

Commerce Secretary Wilbur Ross went on TV in early March to defend the tariffs and proclaimed they would be “no big deal.” The tariffs, he maintained, would have a “broad” but “trivial” impact on prices.

While holding up a can of Campbell’s soup on live television, Secretary Ross asked, if a can of soup goes up by 2.6 pennies worth of steel, “Who in the world is going to be bothered?” Clearly, a lot more than he thought.

Ask any U.S. manufacturer, and they’ll tell you they need access to competitively priced raw materials to stay viable in the U.S. market and their export markets.

Some U.S. manufacturers need specialty steel, and the only place they may be able to get that from is abroad. It should come as no surprise that U.S. firms have filed thousands of requests to be excluded from these tariffs.

The process Commerce designed requires a separate request document for each single type of product, so a manufacturer that uses a variety of steel and aluminum can quickly find itself filing several requests.

https://thehill.com/opinion/finance/408065-trump-team-wildly-underestimated-the-costs-of-tariffs

[Snake Plissken]

1. People use to wonder how someone could bankrupt multiple casinos ...

... well you're seeing the level of world class incompetence it takes in real time.

[htuttle]

2. About that soup tariff

The problem with Ross's math is that it doesn't consider just how many cans of soup that Campbell makes and sells each year: 440 million. Of which, some 200 million are Campbell's Condensed Chicken Noodle Soup like the prop he used in his CNBC interview, or 45% of the total. Campbell's Condensed Tomato Soup is its second-best seller, whose sales account for 85 million cans each year, or 19% of Campbell's annual total.

Thanks to President Trump's tariffs, a financially-troubled Campbell Soup Company will need to pay up to an additional $27.3 million to buy the imported steel that it cannot avoid given the limited capacity of U.S. steel producers in order to deliver the same 440 million cans of soup to the market, which would be on top of the $11.44 million than it is currently paying to do so at Ross's $0.026 per can cost point.

https://seekingalpha.com/article/4153129-soup-steel-tariffs

[RockRaven]

3. Well, at 2.6 cents per can of soup, if you eat it often, it might be 10 cents/week, $5/year

And that's just the f-ing soup! [I don't eat canned soup that often, but this isn't the time/place to sneer at those who do]

Consider the scores or hundreds of items you buy recurrently on a regular basis, whether it be daily, or weekly, or monthly, or bimonthly, or whatever. A couple of cents on every discreet item starts adding up. It does not take much imagination to see how that seemingly stupid complaint about 2.6 cents on a soup can is really a complaint about hundreds of dollars per year per household. And in the US, there are a lot of households where several hundred dollars is a big deal -- "a lot" which is sadly growing.