Corporate profits, after exploding in the high-inflation era, fell this year. Tariffs are very difficult to pass on after the price spikes in 2020-2022.
By Wolf Richter for WOLF STREET.
The federal government collected a record $30 billion in tariffs in September. These are net customs duties after refunds. The White House likes to cite “gross” customs duties, which do not include refunds and are a little higher.
The tariff cash began pouring into government coffers in April. Over those six months, the government has collected $152 billion in tariffs in ever larger monthly increments.
In August and September, collections from tariffs ran at or near $30 billion a month. If collections run at this pace for a full fiscal year, they would generate about $360 billion in receipts, representing a significant reduction of the terrible fiscal deficit.
The primary goal of tariffs is to change the math in corporate decisions so that production in the US gets prioritized. Manufacturing in the US, and the secondary and tertiary activities that come with it, are hugely beneficial for the US economy and in the process generate large-scale tax receipts for federal, state, and local governments.
But if tariffs don’t change the math enough to shift production to the US, at least they generate tax receipts.
Net corporate income tax receipts (after refunds) for the first 11 months of the fiscal year through September amounted to $390 billion. So $360 billion a year from tariffs, in light of corporate income tax receipts, are not nothing.
On the other hand… corporations received massive tax cuts in the OBBB via changes of depreciation of investments and expensing of R&D costs for tax purposes, effective in the current tax year.
Tariffs are taxes paid by importers on their costs of the imported goods. Businesses always try to charge the maximum price that will allow them to achieve their sales goals. So, whether or not businesses can push them back up the supply chain, or pass them on to other businesses and consumers, depends on market conditions.
If consumers refuse to pay whatever, if they shop around and buy from a competitor or forgo purchases, then companies who pass on the tariffs lose sales and end up having to cut prices again. Big companies with online sales do this in real time, minute by minute, consumer by consumer. The goal is always to charge the maximum price possible and still make the sale.
Corporate profits and tariffs. What keeps a lid on price increases in normal times are feisty consumers. But in the free-money era of 2020-2022, consumers were willing to just pay whatever, encouraging companies to charge whatever, and they jacked up prices while sales continued to rise, and corporate profits exploded.
But that period is over. Consumers, still seething over the inflation shock in 2021 and 2022, and the continued sky-high prices of the goods they buy or want to buy, are in no mood to pay more for these goods and are resisting price increases.
So this year, corporate pre-tax profits fell, in part due to the tariffs they couldn’t pass on. But profits remain very high in most industries. In the nonfinancial industries combined, pretax profits were still at an annual rate of $2.65 trillion (my detailed discussion by category of corporate profits is here).
Companies, such as automakers and dealers, have had to cut prices and throw incentives at the market, to keep their sales up.
So for example, prices of new vehicles, after exploding from 2020 through mid-2022, have been essentially flat since then, per the CPI for New Vehicles (my detailed analysis of CPI is here):
Some prices of goods rose in recent months while others declined. Companies are always trying to raise prices. It’s up to the buyers to walk away. That’s how a market operates.
But services are the source of most of the inflation impetus now. Services account for two-thirds of consumer spending. Consumers cannot easily shop or walk away from the essential services – rent, insurance of all kinds, healthcare, utilities, subscriptions, etc. – and price increases continue to fester in services, where inflation is far higher than in goods (my detailed analysis of inflation in goods and services).
Methodology: The tariff data is from the Monthly Treasury Statement (MTS), except for September, which is from the Daily Treasury Statement (DTS) for September 30, released today. The DTS lists “customs duties” and “certain excise taxes” combined as one line item. The MTS – the September edition will be released later in October – separates “customs duties” from “excise taxes.” The difference between the DTS figure and the MTS figure reflects the excise taxes and has averaged $1.66 billion a month for the past 12 months. So the September figure here is the DTS amount of $31.7 billion minus $1.7 billion in estimated excise taxes.
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I suspect a great deal of the disdain for tariffs comes from the way in which they’ve been implemented. Embarrassments like “Liberation Day”, the b.s. about trade imbalances, their on/off nature, gaslighting about who pays, conflicting statements, threats, wild exaggeration, and….attitude, have all undermined confidence that tariffs under this administration can work. This all made it very easy to attack, and for many to believe.
Had the plan been more sensible, executed with at least some professionalism, with actual math involved, voted on by congress, etc., I think this would be a much more easy to sell to the public.
Ditto
And if he wouldn’t continually say that ‘trillions’ is ‘rolling in’’ from “other countries.’
As an aside, I have a Tractive brand dog collar tracker. They are $69 (plus subscription). Mine failed in a few months, and after some back and forth, they agreed to replace it under warranty. I got an email stating it was shipped and scheduled for delivery this Friday Oct. 3. Tracking info shows it originated in Austria. Today I got an email from UPS saying the package was enroute for Friday delivery, but. $58 import fee is due before they can deliver it. It includes link to pay the fee. I emailed Tractive about it and fully expect them to respond that it’s not their problem. They can’t afford to pay $58 per unit as a small company. I’m not paying it, so I don’t know what will happen to it. Just held by customs at the POE forever I guess.
Anyway, if I did pay it, there’s an example of the ‘trillions’ of dollars Drumpf says are ‘rolling in from foreign countries.’
I had a similar experience recently. I found a good price from a European retailer on some mountain bike tires. I was a bit surprised when UPS charged me a fee to receive them, which totally wiped out any savings of the lower price. This is what is on the UPS website:
“What happens if I do not pay the import taxes and fees?
UPS will attempt to collect payment from these invoices through the normal collections process. If after the collection process the invoice is still not collected from the receiver (a max 42-day process from the invoice date), the invoice will be reversed back to the origin to attempt to collect unpaid fees from the shipper.”
I don’t know if that means they will send you to collections, but it didn’t feel worth the hassle to fight it at the time.
I will no longer purchase things directly from European retailers.
I bought a used DVD out of Canada on eBay. Around $16.50 USD. Tariff could be up to 100% but I was like “whatever”. That price included shipping by “mail”.
Yesterday UPS arrives and wants $40 for it! In essence despite the shipping I had paid, they were collecting a likely 100% tariff and tacking on yet another $20 to deliver it.
I politely turned it down and explained to the driver why. I was told I was NOT the first person to do this. He himself wondered what happened to these goods.
Dano,
“He himself wondered what happened to these goods.”
I don’t know about UPS. But I know how FedEx does it because that’s what I use to send out the WOLF STREET “Nothing Goes to Heck in a Straight Line” glass mugs: If the package is not deliverable, FedEx gives me the option of having:
A. FedEx “destroy” the package or
B. Me pay FedEx to ship the mug back to me.
Since the one-way shipment cost is more than the cost of the mug itself – which is not cheap as it is precision-imprinted with beautiful three-color art by SF artist Erika “Kitten” Lopez – it’s financially less costly for me to let FedEx “destroy” the undeliverable package, while I’m hoping that some low-level FedEx worker will somehow end up with that “destroyed” mug on a shelf at their home.
That has happened only a couple of times in all the years I’ve been shipping the mugs (I don’t sell them; the mugs are a gift for readers who donate $100 or more and would like a mug.)
Needed a part for my car. $180 from the dealer, $68 for new OEM on EBay from Japan. DHL made me pay $28 for the tariff. Companies may be having a hard time raising prices, but how much tariff revenue isbeing raised in these types of situations?
Well reasoned, well articulated statement. Definitely not a politician for today’s times.
But at least we’re emotionally satisfied.
Trump may be a buffoon in the way he presents things, but a lot of the disdain is because the media hates tariffs and anything that will upset Wall Street. Even had he done it “professionally,” the media would still be lying about it increasing costs for consumers.
What would be the “professional” approach in a game that is very fluid to start with? One in which trade policy is now just another arrow in the quiver for foreign policy and “war by other means” globally? One which previous US gov’ts have elected to do nothing about – or, rather, exacerbated by exporting American labor and manufacturing overseas in pursuit of other objectives (e.g., attacking the middle class, exporting inflation, supporting big business with a global presence, etc., etc.).
The prompting piece is mostly rhetoric and personal attack. Great! Trump irritates me as well. Bessent is no one’s fool.
Seriously? I just paid $9 for a $5 bag of coffee.
I just paid a tariff.
No you didn’t. Coffee prices had been increasing globally because of droughts and other conditions.
djreef
Coffee prices have been exploding for four years, and you were fine with it and slept through it. And now you woke up and are abusing my site to spread anti-tariff lies and BS. Adios.
Retail prices of coffee per CPI exploded by 40% in the two years before tariffs were imposed and this has nothing to do with tariffs. That price spike continued for other reasons, and then 15% tariffs on the price of imported green coffee beans ($3.65 a pound) is what? It’s about $0.55, not $4.
US coffee futures surged for 5 years, starting in 2020, and peaked at the end of January:
I think it’s jumping the gun a lot saying it won’t be increasing costs for consumers. From what I’ve seen, companies first relied on their existing stocks. Then they squeezed wholesale, transportation and (presumably) foreign producers. End consumer is the last step, and I think they’ll try that to if the tariffs stick around a few more months.
As to it being hard to pass costs on, the pandemic begs to differ. Why are we so sure people won’t behave exactly the same way if the excuse becomes “tariffs”?
Because during the pandemic, everyone, from the low income people who got $1,600 checks to the rich with small businesses who got PPP “loans,” had tons of free money that they didn’t earn, and didn’t care how it was spent. That isn’t the case today.
My question is, shouldn’t stocks go down if tariffs are primarily coming out of corporate margins?
@random50 is spot on – This is exactly how the Trimble Geospatial sales rep laid it out to me, the end consumer, the other week when I called about a quote which included a Tariff fee of 5%.
Chris, right now the indexes are being propped up by the Mag7 and the AI hype, and with the exception of Amazon, they sell mostly services. I’m not an expert on this, but I imagine they’re less impacted by tariffs.
Ultimately, as long as investors think they can’t lose, they’ll continue to buy stocks at stupid valuations.
In industrial B2B sales we’re already seeing instances of mid-year price increases (on goods that typically only reprice once per year) by means of a “tariff surcharge,” so I agree with you.
Yeah those Administrations from Nixon onward just letting China bend us over and shove it in dry were so much more professional.
It was real professional when NAFTA was signed and turbocharged it with our neighbors too.
Give me brash and boorish all day long if that’s what “professional” gets us.
Sdatules,
Broadly agree – the utter, utter failure to course correct/admit empirical reality/adapt for 20 years even as Chinese macro policies allowed it to accumulate astronomical trade surpluses with the US…that was the *worst* kind of “unprofessional” there is.
But with the current, provisional success/tolerance of US tariffs, the Left wants to walk back a smidge on the complete and utter, frothing hatred/contempt of all things Trumpian.
Likely, primarily to preserve the justification/tolerance for the tariff regime and the government revenues it is bringing in.
Exactly like how Biden left in place a significant majority of Trump 1’s tariffs.
(Or…Republicans’ perpetual silence on money printing…and the definitional inflation it causes. Each side is ultimately fine with the corrupt tools of the other “evil/moronic” side – so long as they themselves get to use those exact same tools, for their *own* agenda).
We’ve been ruled by what amounts to two political mafias, for a long, long time.
It has been the country at large that has suffered (enormous Federal debt and all other macro economic pathologies) – not either one of the mafias.
Utter nonsense. It got done. Period. No more high horse.
I think we’ve found one of the 8%ers who think Congress is doing a stellar job.
Thanks for being the few pointing out how much corps juiced their profits after the pandemic. The financial media is trying to convince us to cry crocodile tears to save these poor companies margin increases
Funny, one would think that the Democrats would be all over the tariff plan as a way to raise taxes on corporations….
Boycott their products.
The number one threat, globally, is pervasive/excessive/unsupportable gov’t debt. Personally, I don’t care what mechanism is used to throttle gov’t spending – to include reducing tax take, reductions in gov’t workforce/useless programs, or, QT that has an influence pushing LT bond rates higher (on the positive side) moving Central Banks out of the role of supporting gov’t excess.
Trump shares responsibility for some of the large gov’t spending orgy that has occurred since Obama assumed office.
The piper is around the corner.
This chart may help assigning blame for the deficit.
https://fiscaldata.treasury.gov/americas-finance-guide/national-deficit/#us-deficit-by-year
This is kinda funny. R’s were dead set against raising corporate taxes, and in the first few months after winning all branches of government they essentially raise corporate taxes. D’s have griped that this will raise the cost of living, but they aren’t necessarily opposed, and get less and less opposed as the costs aren’t being passed through to consumers.
Of course they also ran on an anti-socialism platform only to partially nationalize the steel, chip foundry, and rare earth mining industries.
And they ran on law and order, but the Epstein files have been buried so deep it will take an archeologist to expose them someday.
Corporate taxes weren’t raised. Tariffs were increased to either get other countries to reduce/remove tariffs on us, and to provide benefits to companies that only buy and manufacturer home grown parts.
The government is literally shut down right now because the Rs don’t want to give socialized healthcare out to illegals, etc.
Law and order. That’s hilarious. It’s not R judges and DAs letting career criminals back on the streets to commit even more violence.
ST. Pete: there were very few Canadian tariffs on the US. The big exception of course is dairy, which has lots of opponents in other countries and in Canada. It has to do with the big Quebec industry and its influence on Canuck politics. It’s an old story.
Any new tariffs will be in response to the Trump tariffs. The big story here is aluminum. About 60 % of the primary smelter Al coming into the US comes from Canada, and the American Aluminum Association, representing the 700, 000 workers using Al says there is no prospect of sourcing it stateside. Not only does this affect Canada with lost sales, it raised the price for stuff made in the US imported by Canada. It was a win- win.
The US doesn’t need to import any aluminum. Alcoa started importing aluminum because it would fatten up its profit margin a little. That was, to use your term, a “win win” but for Canada and Alcoa, not the US.
So now Alcoa has a choice of:
A. doing that and paying the tariffs at the expense of its profit margins, or
B. producing in the US and dodging the tariffs.
Aluminum prices in the US are roughly unchanged from a year ago and way below 2022 levels.
This is actually for Stpetedave:
https://kffhealthnews.org/news/article/fact-check-immigrants-federal-health-care-shutdown-jd-vance-false/
……and then the Republican Congress gives tax breaks via Big Beautiful Bill to the same businesses that absorb the tariffs or lower prices to the consumers. Speaks a lot, that those tax breaks are permanent by Law while the individual tax breaks are to expire during the next 4 year election cycle. Gee, do we see beyond the smoke and mirrors?
I saw my name so I thought I’d see my question . My question never made the post and apparently there’s somebody with the same code name as me? Do I need to change my name to post information and ask questions?
1. Yes, very confusing, two “Rainman.” Maybe you could add some alphameric symbols, such Rainman01. Or come up with a different screen name.
2. Your question made it just fine, but it’s further down in the thread. And I even replied to it on Oct 2.
I learned this month that the Treasury does not appear to update the tariffs on a daily basis. The daily statement of September 17, 2025, indicated less than $5 billion MTD.
Thank you, Wolf, for teaching us about this publicly available daily tally.
I am going to wait for the historical hindsight as to whether this is good or not. Given decisions made and information coming out about all kinds of topics are often flat out wrong it is hard to really say that some extra money coming in from tariffs is going to offset the much larger geopolitical issues we have created is difficult to ascertain. There are no comprehensive plans from my perspective that deal with the real issues, and not from either side of the aisle. China honestly has to do nothing as when your competitor is making mistakes you just let them and wait patiently. Feels like no adults in the room on our side.
China is playing a very tactical game, repurposed from Mao Tse Tung’s book on guerilla warfare tactics, applied to international trade/negotiations.
In my mind more akin to Deng Xioaping who took the previous successes but tweaked it to modern conditions a solid example of dialectical materialism and responding to change. There are playing 4 dimensional chess while we are engaged in checkers at best. Adapt or perish is the evolutionary equivalent.
Go back further…
Chinese leadership has been using the *Opium Wars* (circa 1840) as a model for how to dethrone American power…
With artificially inexpensive trade goods, American consumer/political addictions, Chinese macro manipulations, and WTO witlessness taking the place of opium.
The “free market” hypocrises and blindnesses remain the same tho…
‘Chinese leadership has been using the *Opium Wars* (circa 1840) as a model for how to dethrone American power…’
No idea what the point is but the Opium Wars were waged on China first by Britain and then by Britain and France to force China to legalise opium. The Brits were pretty ruthless in round one after the Emperor ordered a load on the dock destroyed…reprisals, exorbitant damages, etc.
What about the impact of profit decline on tax receipts?
1. Most of these companies pay very little income taxes in the US on their imported products. They take those profits in off-shore entities in low-tax jurisdictions, such as Ireland, and make very little US-taxable profit then in the US. See Apple (we know that from a Senate investigation of how Apple is doing that, and it’s perfectly legal), see all of big pharma, etc. The taxes disclosed on their income statements include taxes paid overseas. So tariffs may be the only way to tax these companies with their imported products. And there is no reduction in corporate income taxes in those cases.
2. Shifting production to the US generates far more income taxes in the US than the tariffs would bring in on that production offshore.
I work for an American manufacturing company. The company is incorporated in Ireland. So, I’m thinking the Tariffs will be affecting us this year.
Now do as a percent of total federal receipts.
It’s 13.5% of the receipts that are in the budget, it’s about 100% of corporate income tax receipts, and it cuts the deficit by 15%.
Happy?
The republicans really blew it. They finally had control of all branches of government and could have put the country back on a fiscally sustainable path. They haven’t, quite the opposite, even with tariffs.
No surprise that people and institutions around the world are looking for other places to put their capital outside of the U.S.
Interesting times.
Bullsh**. The U.S. budget last fiscal year was like $6.7 trillion, with $2 trillion of that being borrowed, or something like that.
There is absolutely no way to “put the country back on a fiscally sustainable path” without massive spending cuts that the American people wouldn’t tolerate.
People like to blame politicians, but the people are to blame for their expectations on what government should pay for.
Amen!
Watch the treasury auctions. 4 days a week running roughly $150-200 billion. $37 trillion to fund.
We Americans can’t take the pain required to cut spending.
Results: more inflation ahead.
The idea that anyone in government has the political stomach to endure what would *really* be needed to balance the budget is laughable.
It. Will. Never. Happen.
…until forced. Make your peace with the fact that until Mr. Market says “no more cash for you”, the government will continue to spend.
You meant “without spending cuts and tax increases.” Let’s not pretend that taxes are low historically, or even on a world-wide basis, for the upper echelons. One-sideism is tiring sometimes.
Yes it is a two sided solution. Spending cuts may come in the form of spending freezes. Flat is the same as down in government spending terms. This shutdown could enable some permanent cuts and freezes.
Tax increases come in the form of these great tariffs on corporate high profits, eliminating loopholes, and some straight increases. I’d like to see a total elimination of the SALT deduction. There’s no reason the federal government should help rich people pay their excessive property taxes on expensive coastal real estate with this deduction.
Just like eliminating the EV credit yesterday – rich people can buy their own $60-100k electric cars while the working class keeps their fifteen year old gas junkers running another six months. Good riddance.
The top 1% pay 40% of the taxes, while only having 24% of the income. The problem is that the people who want to balance the budget (moreso) with tax increases don’t want general tax increases on everyone (through a VAT, as in the rest of the developed world). They want tax increases on the rich, and ONLY the rich. The problem is that 1) these increases never target the actual rich with a lot of assets, but the “working rich” who actually have to work for their money and 2) there aren’t nearly enough of them to pay for what is projected
The American people don’t want higher taxes, unless it’s on someone else.
“The American people don’t want higher taxes, unless it’s on someone else.”
First, the average american is an idiot. Second, if you don’t have the revenue, you cannot spend, period.
Even among the “intelligent” Americans I see a problem. They want a european lifestyle without paying european taxes. FAIL.
No matter, the laws of nature and physics will sort it out.
Hedge accordingly.
They seem low to me given 90% tax rates in the 50s boom years
“but it took years of high inflation and surpluses to lower the burden of that debt.”
And this time will be no different (gold is screaming this). To think otherwise is to think that America will go the way of Argentina, and if that is the case, then the average American will have much bigger problems, especially in major cities.
TSonder: Now do your calculation on the percentage of TAXABLE income that the top 1% bring in. Let’s say we exclude the first $50k that everyone makes because that’s what people need for a basic life of peanut butter sandwiches for their kids and clothes from Walmart. And the occasional $20 into the gas tank to get through the week.
If the Standard Deduction was $50k single and $100k MFJ and the flat income tax rate above that was 25%, the top 1% would still pay 40-50% of all income taxes and they’d still be living the high life without a care in the world. And all their assets and property and business interests across the globe would be protected by the trillion dollar US military just like it is now.
Craig, the 91% top rate from 1950 was on income of $200,000, which is about $2.7 million today. The top bracket today is $625kish for single and $750kish for married people.
Further, there were more deductions then that wage earners could take advantage of. Thus, very few people actually paid that rate.
You can argue that the top rate should be somewhat higher than it is, but pointing to the 91% as a model for today is just intellectually dishonest.
Complete bullshit. We had the same debt to GDP post WWII. It’s a balance of spending cuts AND tax increases. Don’t be such a douche.
Yes, because we had just fought a world war and were developing our industrial economy, so debt was higher and GDP was lower.
Right now, we’re borrowing money to pay operating expenses.
The necessary spending cuts and necessary tax increases will never be accepted by the voters, nor do our congresscritters have the guts to implement them.
The tax increases will hit the middle class and the ‘wealthy working class’ the most. It won’t hit the holders of assets, whom most look at as the “true rich”.
Completely ignores the fact the you need BOTH spending cuts AND tax increases, period. Typical.
Interesting times.
I don’t ignore that. We need both. The problem is that the Republicans only talk about spending cuts, and Democrats only talk about tax increases on a very small subset.
I think we could get our fiscal house in order if we imposed a federal VAT of 20-25% on nearly everything. But that would cause a massive hit to the standard of living of nearly everyone, and the people will vote out anyone who implements this.
You cannot solve our problems with spending cuts and tax increases only on people making above $400k, $500k, $600k or whatever the threshold du jour is.
45 percent of the debt was monetized in WWII; that is $96.4 billion of the $216.4 billion increase was bought by the Federal Reserve Banks and the commercial banks.
Inflation in 1946 to 1948 ranged from 8% to 15% due to the monetization. In 1951, it shot back up again. High inflation and a sharp reduction in spending for military purposes leading to budget surpluses in 1947, 48, 49, and 51 was how this debt was dealt with. The Fed stopped QE and did QT and cleaned up its balance sheet, and inflation came back down, but it took years of high inflation and surpluses to lower the burden of that debt.
You are the one putting numbers on taxing, not me. It has to be across the board and progressive. Just like post WWII.
Regardless, risk is being repriced, globally. Acting like an irresponsibly bully is not helping America’s position in the world. It’s a global economy whether we like it or not.
“but it took years of high inflation and surpluses to lower the burden of that debt.”
And this time will be no different (gold is screaming this). To think otherwise is to think that America will go the way of Argentina, and if that is the case, then the average American will have much bigger problems, especially in major cities.
Where are you cutting though? Education? Healthcare? Welfare? All things that if you cut reduce American productivity? I can see some cuts to defense spending, but no where to the point of making up for deficit spending. We have a tax problem. Bush and Trump tax cuts created the deficit spending.
Sorry, but WB is exactly right. Republicans have sold themselves as the fiscally responsible Party (as opposed to the socialist, tax and spend Democrats), but when the Republicans are in control of all three branches of government, hold a majority of governerships, and most state level legislatures, they have failed to live up to their cheir chest thumping boasts of sound fiscal managment. The first big blow-up in this millenium was of course the GFC, brought on by George W. Bush and his financial magician, Alan Greenspan. Their combined wisdom sank the markets, in every country in the world and it took nearly eight years to rectify (during you know whose term of office)….I could go on, but you get the point. Donald Trump is an idiot and has no idea what he is doing from one minute to the next, hence the constant contradictions and proposterous lies. People who pay taxes expect their government to be good stewards of the economy. That is not too much to ask….the midterms should show us what the US taxpayer thinks of the Republican mismanagment of the economy.
“people and institutions around the world are looking for other places to put their capital outside of the U.S.”
The 10-year at 4.1% strongly disagrees with this statement.
This will be the quarter that tariffs hit the bottom line.
They already did.
Per the latest statement from President Trump, a portion of the tariff funds collected will be used to bail out farmers who are being hurt financially by the tariffs. I wonder how much will be left for “deficit reduction?”
1. Farmers are ALWAYS sucking on the government. they’re always getting paid by the government, they’re getting paid for growing crops, they’re getting paid for not growing crops, they’re getting all kinds of subsidies and low-interest loans, and other stuff. The farm lobby is maybe the most powerful lobby in the US, and we have the best Congress money can buy, and they’re buying it. Has always been that way. It’s a scandal, it’s outrageous, but that’s how it is, the government always gotta pay money to the farmers.
2. they will sell their soybeans just fine, it’s another fake argument from the farm lobby. What China doesn’t buy from the US, it has to buy from other producers, such as Brazil, which then cannot supply the rest of the world, and the US picks up those sales. That’s always how it is with global commodities. If China doesn’t buy US LNG, someone else will.
3. The amounts are going to be small compared to the tariffs, in total in the single-digit to low double-digit billions in total, compared to $30 billion A MONTH in tariffs. So maybe a week or two worth of tariffs. US exports of ag commodities are big in tonnage, but small in dollars, and only a small percentage of total US exports.
Europe might want that us lng. They are trying to reduce reliance and increase sanctions on Russia with the drone probing going on in nato states
Wolf. You are correct on everything you said about farmers. No qustion, very accurate. And yes, the farm lobby must be strong.
I am interested in your thoughts on how much of all your cited government largesse ends up in the bottom of their pockets versus the pockets of Big Ag, like seed, chemical, fertilizer and equipment manufacturers.
Also, your thoughts on this statement from a former US senator. Europe loves their farmers, because they went hungry in WW1 andWW2. American politicians have purposefully created government control of agriculture since 1920s because they want the US to have plentiful and cheap food. So they proceeded to make farmers dependent on government money to control food production.
So let’s understand who these commodity “farmers” are that get most of the government dough: Most of them are gigantic enterprises with professional staff that know how to extract the last dime from the government. That’s where most of these subsidies go.
In terms of your last paragraph: yes, many countries have created elaborate expensive systems to provide food security and a large degree of food independence from global turmoil.
The USDA publishes that the median farmer is much wealthier than the median American yet the farm lobby is so effective that no one blinks at giving mostly millionaires increased farm subsidies.
US soybean export value for 2024 was $24.47 billion. It was $40.42 for 2021/22.
Peanuts, I mean soybeans, literally. Total US exports were $3.2 trillion with a T in 2024 and $3.06 trillion in 2022. In 2022, soybeans exports were 1.2% of total exports, like I said, big volume, small dollars.
I know a lot of farmers here in corn country. We jokingly call them “government contractors” or “welfare queens”. The business has become so dependent on government cheese, it’s shocking.
We truck equipment manufacturers, and our farmer friends have both been hammered by these tariffs so far, for different reasons. I’m still pro-tariff and anti-bailout, but only one of us will be getting an economic impact payment this year.
The mention of net tariffs is Interesting.
Under usual customs procedure, tariffs do not become finally determined until 314 days after import. (The technical term is “liquidation”.)
Note that 314 days from January 20 is November 30. Thus not a single dollar of Trump’s tarriffs has been finalized and all amounts already paid are subject to administrative adjustment and refund even without filing a protest or lawsuit…
Most of our 2026 models base MSRP has only increased about 1%.
It doesn’t look like MB will be passing on much to the consumer.
Except the G63 Base MSRP is up 5% (+$9,400) to $196,550.
However, Since 2020 the G63 has had a 28% increase in base MSRP.
So far, customers have still been paying up to drive the big square box.
I’ve heard that there has always been a huge waiting list for the G… that MB limits production to a relatively small number to keep it special, and that they’re really hard to get. Is that true?
We had had a wait-list since 2018. It is best to custom order. Sometimes customers don’t take delivery and one will become available but they sell fast. However, California gets the majority of the G Wagon allocation, so if you are a resident you have a much better chance to buy one on the ground and probably for less than other states.
thanks!
So yes, Trump’s coffers are overflowing with tariff cash now. What’s that doing to the actual economy and workers? Farmers who depend on export markets (namely China) are getting killed, companies aren’t doing much hiring, numerous industries are holding off on big cap ex commitments due to the policy chaos, and as you noted… American consumers are balking at paying higher prices in many cases, which creates a vicious feedback loop. Trump’s policies are a disaster, though it appears we still need more time for it to become blatantly obvious to the average American.
OMG the economy is about to crash!
Unemployment is about to spike!!
Space aliens are about to invade!!!
/s
@Alba. My honest and sincere recommendation is for you to diversify the sources of your media consumption. Not saying this because I’m some sort of Trump fanboy. I’m saying it because there’s a wealth of information out there about both the positives and the negatives of this administration. There are plenty of both. If you can’t name the positives, then you’re consuming media that’s misrepresenting reality. Time to mix it up a bit. I’d recommend 2Way with Mark Halperin as a possible starting point.
Big manufacturers have a degree of operating leverage that is very high. That means they must keep their output volumes very high to hit and exceed break-even. They can’t raise prices or demand and profits will vanish. One of the many reasons why those who export into the United States will absorb the tariffs.
It’s also why I always support any increase the Longshoreman’s Union seeks. It won’t come from me. It won’t come from the shipping company. It will be passed directly through to the China exporter by increased shipping costs. And the company exporting into the United States will pay it.
This is wonderful news. I can hear Ethel Merman singing “Everything’s Coming Up Roses”! We should double or triple the tariffs! If 30 billion is great, wouldn’t 60 or 90 billion be even better? Why stop there? Let’s increase the tariffs by ten and see 300 billion coming in every month! Let’s go for it and milk those corporations dry.
There was idle talk to bring on enough tariffs to replace income taxes, like back in the day. Obviously, that’s not going to work, but it has been pronounced.
After getting to witness NAFTA, and open borders, I fully agree.
The corporations with inability to pass on tariff costs are all multinationals anyway. Let those multinationals get their missing profit from some foreigner in another country. Therefore, President Trump’s system of shaking down foreigners for our national debt will still work. Put some big tariffs on imported food multinationals, because the foreigners in some other countries all over the world still need to eat from that multinational.
Good thing we didn’t raise taxes!
Hi Wolf, fantastic report! What are your thoughts on the accuracy of the numbers after president Trump fired Erika McEntarfer do you feel we are receiving accurate information from William Wiatrowski and how do you verify it? When numbers are reported that appear to show favorable information related to tariffs or other changes that the Trump Administration has made people call out – fake numbers. What’s funny when the numbers are not as favorable like the jobs report people blame it on the Trump Administration.
your comment has nothing to do with tariffs. The tariff numbers are based on the daily and monthly cash flow into the government’s checking account, the Treasury General Account, reported automatically daily and monthly by the Treasury Department. This is totally unrelated to the BLS.
Thank you for the clarification and where the Tariff numbers. As mentioned above there is still a lot of distrust in the numbers coming out of Washington as a result of threats and firings. You’re creating these fantastic reports do you have any concerns of the accuracy in the information you’re receiving from any of the government organizations?
1. As I said, the tariffs dollars are from the automatically generated cash flow statement. There is no human there to do this.
2. Generally, if you want certainty, go to church!!! Data isn’t that way. There is no certainty in data. But there is in religion.
The box that contains my new planar-magnet headphones, which I bought directly from the manufacturer, has this beautiful statement on it:
“Designed, built, and tested in San Diego, USA.”
Tariffs? We don’t need no stinkin’ tariffs! These are the best ‘phones in the world. Made in the USA.
Planar-magnetic.
And not to give the wrong impression on tariffs, buying USA made products means they don’t apply (of course).
By the way, these headphones sound excellent!