Commerce Secretary Wilbur Ross: Trump tariffs will have a 'broad' but 'trivial' impact on prices

[TomCADem]

Source: MSN/CNBC

Commerce Secretary Wilbur Ross told CNBC on Friday that President Donald Trump's tariffs will have a "broad" but "trivial" impact on prices.

"What was announced yesterday by the president is a very broad concept," he told "Squawk on the Street."

On Thursday, Trump announced new tariffs on aluminum and steel, sparking fears of a possible trade war and sending the stock market into a tailspin. The Commerce Department recommended imposing heavy tariffs or quotas on foreign producers of steel and aluminum last month in the interest of national security.

Ross said at the time that steel is, in fact, important to U.S. national security, and that current import flows are adversely impacting the steel industry.

Read more: https://www.msn.com/en-us/money/markets/commerce-secretary-wilbur-ross-trump-tariffs-will-have-a-broad-but-trivial-impact-on-prices/ar-BBJN2il

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Of course, an average $175 tax cut for the middle class is HUGE, but a $175 hike in prices is trivial.

[SCantiGOP]

1. Adds a trivial $175 to a new car

I don’t know about you, but I wouldn’t bend over to pick up $175 off the sidewalk

[Bernardo de La Paz]

2. Wilbur Ross deceitfully deceptively defending Trump Tariff.

CommSec Ross said there are 2/10 cent steel in a soup can and 3/10 cent aluminum in a coke can.

“All this hysteria is a lot to do about nothing,” he said. The cost of items such as Campbell’s Soup cans and Coke cans will increase by less than a cent, he added.

The cost of the can won't change much, but the PRICE on the shelf will go up noticeably.

The machinery that makes the cans and fills them will cost more. The machinery that prints the labels will cost more.

The farm machinery that plants and harvests the food materials will cost more.

The trucks that move the cans will cost more because of steel costs.

The tools that fix all that machinery will cost more.

The steel shelves will cost more.

The steel in the construction of the packing houses, the food factories, the distribution warehouses, and the supermarkets will cost more.

By time you dial in all the costs going into the products and getting them through the manufacturing and supply chains, the PRICE will add up because it is multiplicative, not merely additive. When the food is more expensive to produce, the food cost goes up which raises the cost from the food factory to the distributor by a percentage because it costs and prices and profits are calculated on dollar volumes, not unit counts. The cost to the retailer goes up when the distributor raises prices.

Until proven otherwise, we have to take the position that Ross knows this and was deceiving the public and using the taxpayers' dimes to do so while being paid salary.

[jmowreader]

9. And we already have all those things

The real issue is, what happens when the countries that make steel and aluminum realize Canada makes tasty whiskey, Honda makes nice motorcycles, and China grows a shitload of corn?

[Iliyah]

3. Everything t-rump and his cronies touches turns to shit.

His base, rural American ain't too happy.

[Bernardo de La Paz]

4. US has more than enough capability to make as much steel & aluminum as needed if a war.

"National security" is just a dog whistle to the Trumpanzees.

It means Get in line and Salute! Now!

[fountainofyouth]

5. $1.50 a week extra pay will offset it

Right, Paul Ryan?

[They_Live]

6. Is this the same Wilbur Ross that has been laundering money

through the banks in Cyprus? Oh, of course it is. International crime syndicate, conspiracy to defraud the United States government, wire fraud, RICO...

[unblock]

7. If its trivial then why do it in the first place??

Idiotic argument.

[George II]

8. "Yeahbut".... the price of a soup can will only go up a fraction of a penny!

Whose butt is these idiots' heads up?

[paleotn]

13. That is until you multiply that fraction of a penny...

...times 50 million+ cans, and Campbells takes it in the shorts.

[SunSeeker]

10. What the fuck does Wilbur Ross know? He's just a money launderer.

He doesn't know jack shit about tariffs.

[Angry Dragon]

11. I like the last sentence

[paleotn]

12. He either doesn't get it

... or he's lying to their base who really don't get much of anything. A 25% increase in the cost of the primary material to build a car will only increase the cost by $175? If a car costs $15K to build, a $175 increase in cost is 1.2% Ummmm....BULLSHIT!

A quick napkin calculation....

Conservatively, 40% of the 15K is materials...some glass, seat padding, plastics, copper wiring but the bulk is steel and aluminum. Lets say 80% of the 40% is steel. Direct labor + benefits has dropped significantly in the last 20 years....lets say it's 15% of total cost. That leaves 45% for overhead...which is also impacted by higher steel prices in the cost of machine parts, robots, etc., but we'll leave that out of the calculation....

$15,000 X 40% X 80% = $4,800 total steel cost per car.

A 25% increase in steel cost would be.... $4800 X 25% = $1,200 material cost increase.

Overall cost increase is .... $1,200 / $15,000 = 8%!!!!! ....and will be passed directly to consumers.

One can argue that some of the steel currently used is US produced and not subject to the 25% tariff. That would be wrong in that US steel is priced as close as possible to current import costs. Otherwise no one would buy US produced steel. Thus, if imported steel costs increase by 25%, US steel producers will have room to increase their prices and would be stupid if they didn't.

In the end, if the shipping cost is less than $1,200 per unit, Toyota, BMW, Volkswagon, Subaru and Nissan will move production outside the US, costing the jobs of US workers. Is that supposed to be "winning?"

[SWBTATTReg]

14. Be interesting to track...

Someone (and I'm sure someone will) should track ten items and their cost now, of metal intensive items (keep it simple though, don't use a car, which is composed of thousands of parts), and track before and afterwards, lets say 1 year.

And, at each anniversary, add the new tariffs imposed by other non-American companies too, who will do this in retaliation for the tRUMP tariffs, and track after a year.

We can call these the tRUMP inflation costs...doesn't sound that great, but perhaps someone can come up w/ a better nametag...

[Bayard]

15. Fox News

The husband occasionally flips over to Fox to see what the other side is saying, which drives me nuts. This morning they showed a clip of Wilbur Ross holding up a can of Campbell's Chicken Soup, and saying, the cost of this can will go up less than a cent. The cost of a 6-pack of beer won't go up more than a few cents. At least one of their talking heads had the good grace to say--that's condescending.

Once again, selling their shit to the base.