Are Tariffs Making Your Car Too Expensive?
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I’d like to discuss the concept, the topic of demand destruction. And I want to kind of equate this to one of the ongoing themes, something we’ve been talking about as of late when it comes to tariffs, or you could say taxes. Demand destruction is, you know, you might have a high supply, you might have high prices on something, and there comes a point in time
where I’m gonna use the phrase that Popeye would use, that’s all I can say, I can’t say no more. Where the consumer will say, I’m not paying for that. Sorry, sorry, I’m just not gonna do it. I am not gonna pay that price for that item. And guess what? The demand for that item goes down. In essence, demand is destroyed. Again, that can happen because supply,
is a little bit off whatever it may be. We had COVID issues, supply chain issues, and maybe the price of certain items went parabolic at that point in time. Look at this way. Has there ever been something that you wanted to purchase? You wanted to purchase, you wanted to buy, but all of a sudden, the price just got way too high. And you said, you said, you know what? I’m not going to do that.
not going to happen, I refuse to spend that money on that item. Now, I’m going to talk about it in relation to tariffs or taxes, which again, essentially the same thing. It is difficult to calculate, difficult to calculate. You know, I went off on some pretty epic rants against Trump’s
concept that he floated it there. Again, I wasn’t in the room. It was reported on everywhere. Larry Summers talked about it. I talked about it. The fact that he wanted to replace the income tax with tariffs coming in. And again, I was trying to calculate it in my head. I’ve seen a couple people do some studies and they said that tariffs would have to go up 60, 70%. Now, let’s put that into terms that one would understand. Let’s
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Let’s talk about a Toyota. Let’s talk about a Toyota. I don’t know. Was it Toyota Camry or whatever it may be popular car that they’re selling? I don’t know. What does it go for? Let’s say $40 ,000. And there’s already tariffs on that car as it comes into the country. Would you spend? Would you spend for a Toyota Camry, a new one? Would you spend $75 ,000 – $80 ,000
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Some people might, but I don’t know about that. I don’t think that many people would. So what essentially happened? You destroyed the demand for that item, destroyed demand for that product. That’s one of the things that tariffs will do. Again, sometimes politicians, they want to utilize that. They want to destroy demand for foreign.
imports and trying to convince companies to move back here to the United States. You could say that sometimes government want to change behavior. They put massive, I don’t know, what is a pack of cigarettes cost now in New York and New Jersey? I don’t know, it’s well over 10 bucks, right? They put those taxes on them because they wanted to destroy demand. They didn’t want people to smoke anymore. They had their alternative ulterior motive as well as they also wanted to collect taxes.
on those things. But essentially, that’s what demand destruction is. And again, there’s that point in time, you know, I did use Popeye or the use the straw that breaks the camel’s back, there gets to that point in time, where you’re just not going to spend the money anymore. Yeah, again, that’s what the free market is all about, as far as exchange is concerned, what you’re willing
You know, your money, what you’re willing to give up in order to purchase something. And once you hit that point in time where people know willing to say, hey, you know what? It’s not worth it. I don’t want it anymore. Demand destruction. Watchdog on wallstreet .com.
