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

(www.wsj.com)
462 points JumpCrisscross | 1 comments | 30 Aug 25 20:56 UTC | HN request time: 0s | source
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haunter ◴[30 Aug 25 22:47 UTC] No.45078660[source]▶
In the end it's the biggest leopard ate my face moment ever:

China has very high growth momentum that surpasses American living standards soon, and not long before it will surpass American security standards too. China's purchasing power is probably more comfortable than most western countries, with extensive housing and high speed rail and electric cars etc. When a country becomes rich, inevitably other countries ask for their help. That's why China's growth must be curbed, fast > tariff them to their death or so. But I really don't think it will work at all. And personally I don't even think it's a good idea at all to begin with.

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trasirinc ◴[30 Aug 25 23:05 UTC] No.45078792[source]▶
What numbers are you seeing for the surpassing living standards? Their gpd per capita flatlined in 2024 at $13k. That's with only 80M of their citizens making above $2000/month. The bulk of their citizens make less than $100/month, and there's a declining middle class of around 200M that makes around $800/month. But they have high youth unemployment rate (>40%), there's a massive layoff wave coming in September with the mandatory social security payment from companies, and their recent factory wages have plummeted to $2/hour, barely survivable in first tier cities.

Before everyone jumps in with GDP per capital with PPP, what quality at that low price means is tofu dreg buildings, cancerous food items, waist high flooding every summer in cities, ghost buildings, and unsafe water (recently one of the most prosperous city, Hangzhou, had sewage seeped into the water for weeks, which the local government denied responsibility).

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JumpCrisscross ◴[30 Aug 25 23:54 UTC] No.45079072[source]▶
> GDP per capital with PPP

China’s ‘25 GDP per capita on a purchasing-power parity basis is $29k to America’s $90k [1]. American real GDP per capita grew at 1.7% a year from 2015 to 2025 [2]. (American PPP GDP/c grew 4.5% a year from 2014 to 2024 [3].)

From 2004 to 2024, Chinese PPP GDP/c grew 7.4% a year [4]. If China and America keep growing at their respective rates, we wouldn’t expect convergence for 20+ (40, using America’s PPP GDP/c) years. That’s too long for our if condition to be expected to hold.

There is not a strong argument for Chinese GDP/capita, PPP-adjusted or not, approaching America’s within a generation. There is a risk China’s economy becomes bigger than ours in aggregate.

> what quality at that low price means is tofu dreg buildings, cancerous food items, waist high flooding every summer in cities, ghost buildings, and unsafe water (recently one of the most prosperous city, Hangzhou, had sewage seeped into the water for weeks, which the local government denied responsibility)

Your comment loses credibility with this rant.

[1] https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(PP...

[2] https://fred.stlouisfed.org/series/A939RX0Q048SBEA/

[3] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...

[4] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locat...

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refurb ◴[31 Aug 25 00:39 UTC] No.45079311[source]▶
American real GDP per capita grew at 1.7% a year from 2015 to 2025 [2]

From 2004 to 2024, Chinese PPP GDP/c grew 7.4% a year [4].

What an incredibly dishonest comparison!

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AnimalMuppet ◴[31 Aug 25 01:13 UTC] No.45079456[source]▶
What about it makes it dishonest? What do you think would be an honest comparison? And, if you do it, what numbers do you get?
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refurb ◴[31 Aug 25 02:18 UTC] No.45079759{3}[source]▶
Where to start? Comparing a 10 year US period to a 20 year period? Seems awfully selective.

Let's do a side by side comparison? 2018 to 2023? 2023 is the last year with solid numbers.

US: 12% real GDP growth

China: 26% real GDP growth

Sounds impressive, until you account for the base.

US: +$2.4T USD

China: +$3.64T USD

Yikes! 4x the number of people, but 0.5x the GDP growth.

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1. JumpCrisscross ◴[31 Aug 25 07:48 UTC] No.45081273{4}[source]▶
> Comparing a 10 year US period to a 20 year period? Seems awfully selective

Yes, I chose the strongest form of the other side’s argument to show that even then, it’s difficult to argue that Chinese PPP GDP/c is approaching American levels within a generation. (Though China’s numbers don’t vary much between 10 and 20 years, America’s do since we had a lot of war and then economic stimulus in the 2000s.)

> 2018 to 2023?

You want to make multi-decade projections off a pandemic baseline?

> 4x the number of people, but 0.5x the GDP growth

Per capita means per person. Purchasing power means real production. The question was about potential living standards, not aggregate might.