Walmart/Amazon/Cheap Goods
 

If Trump's tariff plan goes into effect, how do you think it will impact businesses like Walmart and Amazon that thrive by selling low margin imported goods at high volume?

Prices on everyday goods will go up a lot, which I believe will make consumers not buy as much (lower the demand for high volume) and the things that they buy will be expected to last longer.

I feel that it hurts America's current idea of capitalism which is all about growth. Investors dont care if a company sells a few things at high margin, they want people buying goods that need to be replaced (planned obsolescence) so that sales can grow each year. I constantly hear about executives in trouble because their company is making a steady 50 billion in PROFIT each year, rather than growing 10% each year :banghead:

Will this change America's economic culture? Will common people be seen more as laborers rather than just consumers?

Also, will people start making more money to be able to buy the rising priced goods? As long as US companies are only interested in profit growth each quarter, the companies will refuse to pay workers more in order to protect margins.

I am all for buying American made (quality still comes first in my buying decisions though). But I feel this will be a tough transition for a lot of Americans. Americans living at the average income (and below) are dependent on cheap imported goods to live the quality of life they currently do. It is going to spread the inequality gap even further.

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What I think needs to happen is an economic culture shift. I know that goes against "free-market capitalism" though.
-Companies shift from focusing on profit growth each quarter, and instead be content with a steady "healthy" profit (I know that's subjective) that maintains the health of the overall national economy. Kind of like a company having ethics. That way employees earn enough money to have disposable income to buy good from local/national companies.

When you have an economic system set up where employers keep wages so low in order to keep profits high, you make it hard for those employees to be consumers.

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Anyway, what do you guys think will happen to companies like Walmart and Amazon?

Hopefully Walmart will go down the drain.

I believe amazon, walmart, and even dollar general have a nice niche and will remain consistent or even grow.

I agree with your points, however, I think the wage viewpoint is a bit simplistic in this day and age. There is no doubt you can get cheaper labor elsewhere, however, what america thrived in and can really hit our stride in is automation. Once a company is forced to stay or comeback to the US, I believe a short-term price increase in some industries may occur, but will be unsustainable economically, forcing companies to innovate automation systems, processes, etc. in order to lower prices and maximize profits.

This being said, there will be a lot of high-paying factory jobs coming back to the US if everything works out in Trump's favor, however, not as many jobs as there once was due to a need for increased efficiency, productivity, and automation

I agree. I think they are very unethical with how they operate their business (limited hours/wages to bypass benefits and their goal to takeout local businesses). But the American people have spoken with their money, they want cheap goods. Everyone knew they were destroying local businesses and economies, but cheap goods are too irresistible.

There is a great South Park episode about this. http://southpark.cc.com/full-episode...this-way-comes

Have the American people changed their mind? Will the same people that voted to Make America Great Again do their part by kicking their Walmart habit and actually buy American goods?

Extremely interesting question. Honestly i don't know what effect it will have, my best guess: I think the transition from cheap imported goods to locally made more expensive goods will be a painful transition for most but ultimately better for the planet and better for its occupants long term. We are addicted to cheap **** we don't need to be happy.

From one end of crony capitalism to the other.

If it were possible for Trump to implement a 45% tariff I think all hell will break loose.

The biggest problem with the scenario is calling factory jobs returning to the USA "high paying". Without unions to protect wages I would imagine that factory jobs just become the next stack of minimum wage jobs performed by low skilled workers without a college education. What makes you think that a company used to paying someone the equivalent of a few dollars a day would suddenly offer to pay an American 20 per hour or more for the same work? They'll offer the job for 7.50 per hour and someone will take it.

I actually made the transition to US made goods many years ago. I always search for the high quality made in USA product. It's cheaper in the long run to pay twice as much for something that lasts forever rather than paying half as much and replacing the broken low quality product 3 or 4 or 10 times.

Actually Amazon is quite helpful in this endeavor. Brick and mortar abandoned American made decades ago. I usually need an online service such as Amazon to find the American made product for sale.

Eric, as much as I am sure that I sorely regret joining a non-wakeboard discussion, I disagree. I have spent my entire life around construction in Texas. My father has employed a lot of "unskilled" workers and Mexican nationals over the years. He has never been able to pay minimum wage--or even close. Someone correct me if I am wrong, but the min wage in TX is $8.25 or so. If you have a social security number and are abled bodied, you start at $11/hr. If you last a month, you get a $1/hr raise. If you show initiative, learn english and show an ability to run a crew (or already have your own crew) you make $15-18. After 5 years, you qualify for profit sharing. Every time someone suggests that adults work for minimum wage, my dad says, "Where?! I'll hire them." Now, you don't get a pension or 4 smoke breaks a day, but the odds of union workers being replaced at $7.50/hr is silly.

Walmart to create 10k jobs in nod to Trump.
http://www.marketwatch.com/story/wal...01-17-61035011

walmart, a 200 billion $ company isn't going to let a president or anyone else get in their way. They employ 2 MILLION people, so this is just a drop in the bucket.

Prices get higher for other items, you stop buying crap you don't need. Maybe housing prices lower. Maybe GM and Ford won't charge $55K for a loaded pickup truck. Maybe Hollywood types won't pay 5 milllion dollars for a 30 second ad for a Super Bowl ad.

The odd thing is, people complain about employing American workers and the cost of goods, however they are the same people who say higher taxes and regulations don't hurt costs. They all influence costs.

Who are these people you speak of? I don't recall anyone with that stance. Complaining about hiring Americans and lowering taxes and regulations is a familiar stance that corp America takes.

Actually the people who complain about the cost of hiring Americans at a higher labor rate and people who complain about regulations and taxes are usually on opposite sides of the political fence.

Those things all do certainly affect costs of manufacturing/supplying but they don't have so much affect on consumer prices which is a completely different animal. Prices are determined by what consumers are willing to pay. Costs generally only affect profit margins. A supplier can raise consumer prices to offset costs but if consumers quit buying their product as a result, they will have to lower the price back down and accept a lower margin in order to maintain the maximum level of profit. It goes the other way as well. Lower costs by reducing taxes, regulation, labor rates, etc. and it only lowers prices if a supplier determines that they can sell so many more units at a lower price that profits will increase. If a lower price doesn't sell significantly more units then the lower cost only results in higher profits at the same price. Nobody in business lowers their price as a gift to citizens for lowering their tax bill or labor rate. That is nothing more than a trailer park fantasy.

LOL, Harbor Freight just sent an apology email for mentioning Trump in a previous email.