SAUSALITO, Calif. – JP Morgan CEO banker Jamie Dimon says the stock market, holder of many 401(k) accounts, is ignoring red flags about tariffs and the higher interest rates they may bring. Consumers have only begun to feel the pain as more tariff-laden products come on to the market.
What the tariffs have brought so far has mostly been superficial. But that is changing.
Napa-based Portocork, importer of corks, stoppers and caps for wineries and breweries, says it, like all importers of all things, sees a double whammy, according to CEO Dustin Mowe.
First came the 10% tariffs on goods. Now, the U.S. dollar’s value against other currencies has slipped by 7%, requiring 7% more dollars to import goods.
“Seventeen percent more expensive is a big hit when you’re buying these products that are very, very expensive,” said Mowe.
It gets worse for his winery customers to export to Canada. “There’s been obviously a boycott of American goods to Canada,” said Mowe.
Sausalito wine tasting boutique, Bacchus & Venus, specializes in small-production, high-quality wineries. He sells some imports and would like to keep doing that unless tariffs go too high.
“As long as they cost and they don’t get so expensive that it doesn’t make sense and no one will buy it,” said Bacchus & Venus owner Todd Weeler.
Except for the juice in this bottle of California wine, everything else, the caps, the bottles, the labels, the machinery to make it, come from overseas. So, while there’s no tariff on this wine, it’s going to get more expensive because of the tariffs on the all the things used to make it.
“Hurting the customer. “The tariffs are a tax and, whether it be on steel or wine, on anything else, it ends up being the civilians that are paying for it,” said Bacchus & Venus customer.
John Caruso.
Across all products, Goldman Sachs economists say, foreign exporters are absorbing about 20% of the tariff impact by lowering their prices or providing rebates. The rest is added to the price of the wholesale goods here.
That big chunk is currently split between U.S. businesses and customers. But, eventually, say the Goldman Sachs economists, consumers will pay much more of that in higher prices.
But, even prices for U.S.-made goods could go higher if U.S. producers raise their customers’ prices for higher profits, as has been done in the past.
“I think that the fact that the tariff is too much…I mean, like even some places you go in, like olive oil in a little local place that we go into, everything is high. I don’t know how that’s gonna help our country, long term. It doesn’t,” said Bacchus & Venus customer Judy Pinson from Portland.
Expect prices to go up as well as inflation-fed interest rates.
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