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by darknavi
437 days ago
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The specific (fictitious) example they gave was $100 -> $150 due to a ~$23 tariff. > But if we bump the cost of freight, insurance, and customs from $5 to, say, $28, then they wholesale the shoes to Footlocker for about $75. And if Footlocker purchases Nike shoes for $75, then they retail them for $150. Everyone needs to fixed percentages to avoid losses. The point being that many parts of the supply chain don't operate on fixed costs and instead percentages. |
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That's how it was working in most wealthy countries, where tariffs were generally low or very low.
I don't see why it must continue to work that way in the USA with 50% or 100% or more tariffs. If Footlocker wish to charge double the post-tariff price, that leaves room for a competitor to change double the pre-tariff price.
(Or double the pre-tariff plus a tiny bit, to account for the increased cost of insurance, theft etc.)