Six months into tariffs, businesses have no idea how to price anything

FWIW, we’ve been affected by the tariffs (10% for now; we import mainly from Vietnam and Thailand at this point). Did our second price increase a few weeks ago. We’ll probably test out how much the market will bear because operating in this market really demands a risk premium. So far it’s not as crazy as the pandemic supply chain crisis, but it’s close. The most insane ending to all of this that I can imagine is that the tariffs get conclusively ruled unconstitutional and all the tariffs payed get returned. Would be a huge wealth transfer from consumers to businesses.

Super minor FYI, but on your website all the images in your portfolio show as broken to me.

Thanks for the reminder; website is super out of date.

>FWIW, we’ve been affected by the tariffs (10% for now; we import mainly from Vietnam and Thailand at this point).

The import tariff from Vietnam is 20% and Thailand is 19%.

The 20% tariff from Vietnam has been announced by Trump, but unless I’ve missed something in the past week or so, it’s not official. There was a news piece I read a few days after he announced the 20% number that said the Vietnamese side had actually agreed to 11% and were surprised when he injected himself into the process at the end and announced a different number. So it sounds like it’s a WIP. I believe the only country that actually has a signed deal at this point is the UK.

That being said, the copper, steel, and aluminum tariffs announced recently are real and have been assigned import classification codes by US Customs (which is when new tariffs to become real).

> The most insane ending to all of this that I can imagine

The most insane ending is that tarrifs are reverted but most of the price hike will stay for good.

Market forces will prevail.

Why would that happen, if it didn’t happen before the tarrifs?

Because companies make more profits when the prices are higher.

Under normal conditions, if one company increases their price then buyers will find an alternative.

When all the companies increase the price at the same time then there are no alternatives. Customers become acclimated to the new price.

But there then becomes an incentive to lower prices to capture more demand. I don’t think that tariffs will incentivize collusion any more often.

That's very risky for companies to do because because you might not capture that demand. If you fail then you just lost money.

One reason is buyers may only consider alternatives when prices increase.

Depends on the market. Markets with lots of competition will have to lower prices. With only 1 or 2 major players? They'll keep prices high based on backroom handshake deals or "i'm not moving till he moves"

If you’re lowering prices because your costs went down, then you haven’t lost money.

That's how market forces work, it's risky but it pays off until prices hit equilibrium.