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Topic: Tariffs Effects on Sprint Car Racing
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Page 2 of 2 of 21 replies
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April 05, 2025 at
02:11:55 PM
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Joined:
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11/24/2004
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97
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Reply to:
Posted By: longtimefan on April 03 2025 at 02:08:17 PM
A couple of things to consider here. One a lot of people don't think of (and some don't want you to think of) is that the tarrif is on the wholesale price of goods. This usually 25 to 30 percentof the retail price. A 20% tarriff does not mean a 20% increase in retail price, Another is most of these tarriffs will never happen, they are just a nogotiating tool as they are going to be on countries that charge a tarriff on our goods going into their country. It is hard to figure out if tarriffs are good for their economy why are they bad for ours? You hear a lot about Canada crying about us putting tarriffs on their goods. Just last week China put a 100% tarriff on some Canadian grains going to China and I have not heard a peep from them on that. The thing is many of thses things go a lot deeper than you hear from any news outlet.
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Uhhhh, wrong. Retail Businesses (their accountants actually) have gross profit margins that must be met in order to stay in business. The cost of wholesale goods is multiplied by a factor to set a retail price that will enable that gross profit margin to be met, lets use 40% as an example. If the wholesale cost goes up by 25%, the new retail cost will be raised to maintain that 40% GPM, in order to meet overhead. (wages, rent, utilites, etc.) and maintain net profit. So yes, that 25% increase will be passed on. Additionally since these tariffs are so all encompassing, the cost of overhead is very likely to go up as employees will demand higher wages, utilities will have to charge more for energy, shipping will cost more, etc. etc. etc. putting more upward pressure on the retail price.
And that's not even beginning to consider the supply chain, which like it or not, for many, many products probably cannot be established and maintained completely on a domestic basis.
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April 05, 2025 at
03:41:00 PM
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Joined:
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12/02/2004
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946
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Reply to:
Posted By: Langhorne on April 05 2025 at 02:11:55 PM
Uhhhh, wrong. Retail Businesses (their accountants actually) have gross profit margins that must be met in order to stay in business. The cost of wholesale goods is multiplied by a factor to set a retail price that will enable that gross profit margin to be met, lets use 40% as an example. If the wholesale cost goes up by 25%, the new retail cost will be raised to maintain that 40% GPM, in order to meet overhead. (wages, rent, utilites, etc.) and maintain net profit. So yes, that 25% increase will be passed on. Additionally since these tariffs are so all encompassing, the cost of overhead is very likely to go up as employees will demand higher wages, utilities will have to charge more for energy, shipping will cost more, etc. etc. etc. putting more upward pressure on the retail price.
And that's not even beginning to consider the supply chain, which like it or not, for many, many products probably cannot be established and maintained completely on a domestic basis.
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I will type this slowly so some can comprehend it. Will also use round numbers to make it easier. Lets say a piece of clothing costs $40. I know the wholesale cost is not $20 but say it is. A tarrif is charged on the twenty not the 40. A 20% tarriff so four dollars to maintain the same profit not eight and the four is high because items retail for more than double the wholesale price. You can blame the four on tarriffs not eight. I never once said some prices won't go up just not as much as some report. The other thing is most of the tarrifs will never happen as countries will nogotiate new deals. Some of can be beneficial for those with ambition. My 16 year old Grandson just told me he got $300 for a trailer load of scrap metal because it is up because of this. I am pretty sure he dose't care if someone else is upset. It is Sat night and he has money the he earned in his pocket. Lets see where energy prices are a year or so from now. Also you know some tariffs have already been in place so it is only the difference between then and now.
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