The reporting on Trump's tariffs stays the same, no matter the results

Recently, there was another hit piece against Trump's tariffs on the front page of my local paper.  This one was by a reporter from Gatehouse Media in Illinois.  It does not matter whether the WSJ, the WaPo, the AP, USA Today, Gatehouse, or anyone else who writes on the subject; important factual information is always missing from the articles.  The agenda to attack Trump is the important factor in these articles.

This article makes it sound as if a local furniture retailer is going to have to raise prices a lot.

A sign outside Crazy Joe's furniture store warns customers of the tariffs President Donald Trump has imposed to level the playing field for America's furniture makers and sellers.

"Tariff Impact," it reads.  "Buying furniture before Dec. 31 will save you money.  You won't see furniture supply at this pricing for some time!  Buy now to beat the price increase."

The Trump administration's tariffs on Chinese imports will mean higher prices for furniture here and across the country.  American furniture stores rely heavily on imported goods.

Prices began rising after Sept. 24, when a 10 percent tax was placed on $200 billion worth of Chinese goods, including furniture. More sticker shock could come in the new year when the 10 percent tariff may increase to 25 percent.

"We'll be forced to raise our prices on some items," said Crazy Joe's manager Jose Hernandez.  "That's obviously going to affect sales.  We take a loss or it has to be passed along somewhere down the line."

It sounds as if furniture retailers were in hog heaven before the tariffs came into effect, but throughout my entire life, we have had furniture retailers that have closed long.

Here is a sample list of questions this and other reporters always seem to forget to ask.

  • Ask for a sample of costs for five items in the store.  Then ask what the actual cost increase is that the supplier is passing on to the store.  Is the supplier eating some of the increased cost?
  • Ask what the selling price has been on those same items to see what the store markup is.  Can the store absorb some of the additional cost without getting to a loss?
  • Ask what percentage of the store items comes from China, and ask if there are any other potential sources for similar products. 
  • Find out what the store's sales, gross profit, and net income have been the past five years to see if there are factors other than the tariffs that may be the problem. 

Furniture has always had a huge markup.  According to this source, the markup is 200% to 400%.  Let's say the cost to the furniture store is $200.  The normal selling price according to this source would be $600 to $1,000.  The additional cost from a 10% tariff would be $20.  I would think the normal $400 to $800 gross margin may be able to absorb the $20 without penalizing the consumer or threatening the viability of the business (and most likely, the whole $20 tariff wouldn't be passed through by the supplier).

No industry manipulates the meaningless MSRP (Manufacturer's Suggested Retail Price) quite like the furniture industry.  Salespeople usually receive a 15-20% commission if they sell an item at the inflated MSRP.  But there's another helpful abbreviation to know: MAP (Manufacturer's Advertised Price).  This lower price is the minimum at which most retailers are allowed to sell the item.  Salespeople resist consumers who ask for this price and only receive about 7% commission on MAP sales.

The reason President Trump is imposing tariffs is to level the playing field and to protect U.S manufacturers and jobs.  For too long, we have had policies that just let jobs disappear.  According to NPR in this 2009 article, 300,000 jobs in the furniture industry disappeared in the first decade of this century alone.  Shouldn't we worry about being under the thumb of China or some other source where these could cut us off?

Thank goodness we now have a president who understands that we should not subject the United States to so much power from others.

Think of how much better off we are now that we are producing so much more oil instead of being dependent on OPEC, and then apply that thought to other products.

Bill Curtis watched his job slip away piece by piece.

He spent his adult life cutting cloth for sofas at Broyhill Furniture in Lenoir, a town in the foothills of the Blue Ridge Mountains of North Carolina.  Over time, Curtis noticed more cloth arriving at his factory from overseas.  Then, Broyhill began slashing his hours.

"Work just started to dwindle," Curtis recalled.  "The more we saw leave, the more containers we saw coming in.  So we knew that's where our jobs went – China."

Curtis finally lost his job in 2005 as American companies continued to shut down factories in the U.S. and sent the work to China.  In fact, more than 300,000 furniture jobs have disappeared from the United States this decade, according to the U.S. Bureau of Labor Statistics.

Who got some of those jobs, and what sort of lives do they lead?

"I've seen some pictures of furniture factories over there," said Curtis, 55.  "It's the closest thing I can think of to slave labor."

Port of Long Beach handles about 45 percent of all containers incoming into Customs and Border Protection.  Photo credit: Charles Csavossy.

We have also been told how much the tariffs would harm consumers, along with businesses, because prices would skyrocket.  Isn't it amazing that competition works, and price increases on imports from November 2017 to November 2018 on imports was only 0.7% – so less than the 2% overall increase in prices?

Why were the experts wrong, and why do journalists continue to ignore the facts?

It would be nice if more journalists could locate their curiosity gene and do some valuable reporting instead of pushing talking points to destroy Trump and support Democrats.  The facts change, but the reporting stays the same, and that is virtually worthless.