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« Last post by mickeg on May 09, 2025, 01:05:06 PM »
John, very good point on the difference between goods and services. It is my understanding that USA buys a lot of goods from Europe, but Europe buys a lot of services from USA. So, Canada is not alone. I am not sure about UK, but I suspect the same with UK.
This past March here in USA when I anticipated the tariffs to come, one thing I considered was tires for my vehicle. They were marginal but still had legally required amount of tread. I had been planning on replacing them this coming fall in about a half year.
The tires I wanted to buy cost $211 (USD) each, before local sales tax and installation fees. I asked the dealer where they came from, since that manufacturer had factories in USA, China, Japan and Europe. Dealer said different sizes from different places, they did not know where they came from until they got them in stock. So, I ordered them and had them installed in middle of March, before tariffs.
Looked at the tires after installed, made in USA.
When a company does not have their costs increase, but their competitors have cost increases that cause the competitor to increase prices, this is a free market world. That means that the company that did not have cost increases has no reason to keep their prices low if their competitors raised their prices. So when I saw my tires were made in USA, I assumed that their prices would rise anyway when the tariffs kicked in. The only question was by how much? I did not regret buying them early.
Today those tires cost $238 (USD), roughly 12.5 percent increase in price.
A lot of petroleum goes into the making of a tire, but the cost of crude oil now when measured in USD is quite a bit lower than it was in March when I bought the tires, so cost of materials to make those tires is probably not the reason for the retail price increase since one of their major costs of production actually went down, not up.