Summary
German engine maker Deutz said it will fully pass Trump’s new 20% tariffs on EU imports to American customers through price hikes.
The move underscores warnings that tariffs act as consumer taxes and could raise inflation.
Trump claimed the tariffs as necessary to combat trade imbalances and protect U.S. manufacturing. However, EU officials, including Ursula von der Leyen, pushed for zero-for-zero tariff deals, but Trump rejected them.
The EU plans retaliatory tariffs by mid-April. Economists and officials warn of recession risks and disrupted supply chains.
I think you need a more extreme number if you say the words “would never sell” because that is only double the price.
With the other inflation we’ve seen, especially for the price of eggs, and upcoming tariffs those kinds of changes are not unheard of.
Supply and demand would still say that there would be less products demanded and produced, but unless we are talking about specific branding, I would be surprised if supply or demand for any kind of product drops to zero.
Why wouldn’t a price that’s too high to pay prevent a product from selling? If demand of a product goes from 10,000 units to 10 units from the price shift, then it’s better to not develop and sell it. The rational move is to focus on the high end or custom-made products where you can have the margins necessary for low-volume to make sense. When it comes to low-end products, volume and throughput is the name of the game.
Want an example? How about this smart move by Framework stopping selling some of its cheapest laptops.