Tractors and (upcoming) tariffs?

[charlessenf]

To paraphrase Anonymous "Be careful what you vote for."

 

[antlers125]

I have been reading a lot of posts here. And there is a ton of insightful information & a lot of emotional responses as well. I try to look at the big picture & think the Majority can agree that there needs to be changes in the System before it is too late. Immigration, Economy, Heath Care, Education & Social Security to name a few. The Country cannot maintain the current path. And the Incoming Administration is going to make drastic changes. Let's hope for the good.

 

[DieselBound]

To paraphrase Anonymous "Be careful what you vote for."

Or perhaps more appropriately: "Be careful what you vote against." Seems people vote less for what they want than what they don't want: and we ratchet down the slippery slope that ends up delivering really poor "products."

 

[MROlson86]

To be clear, according to reports the 25% tariffs will not be implemented, or if implemented will be removed, once Mexico and Canada stop the flow of illegal immigrants and fentanyl into the U.S. In other words, the next administration is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America, fulfilling the America first policy. This is a great way for the next administration to effect foreign policy changes even before he takes office.

**checked 3 times for any political stuff.**

To be clear, people and things have been crossing boarders before there were boarders. Can’t see that tariffs will change that. Maybe we can talk about the domestic demands that fuel the proposed tariffs?

 

[LouNY]

I too paid into Social Security for many years. Even though I'm 75, and collecting, I'm still paying into the system because I remain self-employed as a farmer. They recalculate my benefit every year, based on the new addition to my earnings record. Because there were a few very lean years in that history, my benefit has been known to increase because I still work.
But I take exception to your assertion that if I had put that money into a private investment, I'd be better off. The truth is that it seemed like every time I managed to collect some savings, something came along to drain it away again. Those lean years I mentioned. The barn needs a new roof, the car dies, or weather cuts production. Something. The forced savings imposed by the government are keeping me solvent, now that I have enough "experience" that I can't do some of what I once could.
And BTW, the money that was "stolen" from Social Security was actually "borrowed." It became part of the National Debt. I seem to remember reading somewhere that we owe the largest portion of the National Debt to ourselves.

Everyone is different, my farm work since I retired is unpaid. So my doesn't increase any my wife is still working so hers does go up.
Back in my younger years in industrial construction I a few years when I maxed out my SS payments and my last 15 years were with a pretty good income.

And BTW, the money that was "stolen" from Social Security was actually "borrowed."
Borrowed and not repaid = stolen.

 

[CloverKnollFarms]

Mexican President said that Mexico is breaking up and dealing with two large groups of migrants before they reach the US border.

The plan isn't to actually implement tariffs. The plan is to use leverage, as always, to secure a better deal for the citizens of the US. I support using leverage to better our standing.

 

[tjandrews]

Everyone is different, my farm work since I retired is unpaid. So my doesn't increase any my wife is still working so hers does go up.
Back in my younger years in industrial construction I a few years when I maxed out my SS payments and my last 15 years were with a pretty good income.

And BTW, the money that was "stolen" from Social Security was actually "borrowed."
Borrowed and not repaid = stolen.

Not repaid - YET.
The day of reckoning is coming. When they do nothing, and what's left in the Social Security Trust Fund actually runs out, and benefits are reduced to 75% because less is coming in than is owed, then Congress will have to make up the difference from somewhere. Assuming, of course, that they wish to get re-elected.

 

[Black Dog 2]

It appears we are soon going to have tariffs of 20% and more on anything imported from anywhere.

What does this mean for us here at TBN?

Unless tractors, accessories, attachments and parts get an exemption ("necessary services" or something), prices of imported tractors are going to go up by at least 20%. If we finance, payments will go up, since the tractors cost more, insurance (if applicable) will also go up.

Prices for used tractors will also go up (as if they aren't high enough already), just like the prices of used cars rose almost in lock-step with the increased prices and limited availability (from Covid) did on new cars.

As tractors become more and more expensive, we will either keep what we have longer or if we are in a business that relies on tractors, we will have to raise our prices when tractors and parts become significantly more expensive. Fewer tractors will be sold, because WE don't get a 20% raise to compensate for the 20% price increase from the tariffs.

Anyone who uses a tractor as a service (land clearing, mowing, etc.) will also have to raise their prices because their costs just increased.

This all means higher prices for lots of people, many of whom don't even realize there is a tractor somewhere in the "food chain" of goods and services they buy.

This affects Kubota, Kioti, Mahindra, some John Deere, and others. Deere moved part of their production to Mexico to keep the retail price down, and if they decide to come back, their prices will have to go up.

The issues with across the board tariffs are that they increase the cost of anything imported and WE pay these tariffs, not the manufacturers. Tariffs are a tax on US, and they are intended to discourage us from buying imported things, whether or not those things are even produced or available domestically.

A further problem is that when a domestic manufacturer is protected by arbitrary tariffs, they have ZERO incentive to improve their products (because there is no competition) and their prices can rise (again, because there is no competition). You may recall the "invasion" of Japanese cars in the 80s - Detroit had become totally complacent, and protected by tariffs, continued making and selling the same crappy cars they had been making for years. Eventually, they all went broke and had to be bailed out by the government, using OUR tax dollars to do it. (Yes, they eventually paid back most of the loans, and lots of jobs were saved. We may have to do it again because the current crop of Chinese electric cars are very good indeed, and amazingly inexpensive because they often are subsidized by their government.)

Arbitrary tariffs are a mistake. There is, however a rationale for targeted tariffs. If an overseas company is "dumping" their product at or below cost to put a domestic competitor out of business, that is a legitimate reason for a tariff. Interestingly, if it two domestic companies engage in a price war, there is no law against that, and in fact, it happens all the time.

After WW2, the US was the only real market for anything, nobody else had any money and they were busy rebuilding from the war. Now, however, there are lots of countries that can afford to buy imported stuff, and it might be very tempting to a tractor manufacturer (and not just to tractor manufacturers) to abandon what they see as a "hostile" market and sell to customers around the world instead.

Some of them MAY establish factories here, as Honda and Toyota have done, but some of them are simply going to say the US market just isn't worth the trouble and sell elsewhere. Establishing a local factory isn't done overnight, either.

In the interim, we'll have higher prices (new and used) and a narrower selection.

There is an old Chinese curse - "May you live in interesting times." We do.

(Kevlar and fireproof suit on!)

Best Regards,
Mike/Florida

John Deere should have stayed in the US

 

[KofAlberta]

“Borrowed and not repaid = stolen.“

Isn’t the money paid out by many social security plans a combination investment proceeds and a pass-through of current workers’ contributions? So where current workers pay for current retirees does that also “= stolen”? (As in “stolen” from current workers to pay current retirees.)


How is Social Security Funded?

“Social Security is not a savings plan. What you pay into the system does not go into an account for your retirement. Workers in each generation finance Social Security payments for their retired elders and other beneficiaries. Down the road, their benefits will be paid for in turn by younger workers.“

How is Social Security Funded?

Most of the money for Social Security retirement, disability and other benefits comes from payroll taxes paid by U.S. workers and employers.

www.aarp.org

 

[Pete SkyViewFarm]

As applicable as it is to farming, “you reap what you sow” applies in all life’s decisions. Unfortunately those decisions affect everyone, even those who had some common sense.