[sundaeofshock]

I did a Google search for “retailers raising prices because of tariffs” and the link below was the first result. Seriously, do you really think that retailers are just going to eat the cost of tariffs for the next three years?

https://www.businessinsider.com/companies-raising-prices-inc...

[somenameforme]

Retailer's prices are not set to be "fair", they're set to maximize their return on the supply vs demand curve. In other words, increasing prices will generally cost them money, rather than make them money. In other other words, they expect that if they charge 5% more, they will trend towards selling 6% less.

So in general they end up stuck between a rock and a hard place in a situation like this. The most logical path forward would be to work on supporting domestic supply chains, not subject to tariffs, and helping them to gradually reduce prices through increasing both volume and efficiency.

But the problem that concept runs into is that there's about a coin's flip chance that in 3 years these tariffs will simply be reversed. And any domestic suppliers that were relying on them for a competitive edge will simply be left buried. It thus discourages any sort of meaningful investment in these domestic providers.

[AnthonyMouse]

Retailers typically have thin margins, e.g. 2%. They're paying $0.98 to sell something for $1 so they can keep $0.02. Not all of the $0.98 is imported products (a lot of it is salaries and rent etc.), so a 10% tariff might only raise their costs by 5%. But then they're paying $1.03 to sell something for $1. Do they care more about maintaining their volume at that point? Of course not, they're going to raise price instead of making a loss. But so are their competitors, because their costs went up too, which prevents them from losing sales to the competition anyway. Then they only lose sales to customers being unable to afford it, e.g. because they have to spend more on food and then have less to spend on new cars.

This is true of most taxes in a competitive market. Competition was keeping margins low so the money has to come from higher prices or lower salaries, and salaries are sticky so it's usually higher prices. So if the tariffs are instead of some other taxes, it's just a revenue-neutral tax change, not inherently raising prices. But if the tariffs are on top of other taxes then it's a tax increase which gets passed on as higher prices.

[_carbyau_]

> Retailer's prices are not set to be "fair", they're set to maximize their return on the supply vs demand curve.

I would add to that statement the context of the market and competitors. Even if retailers east some % of cost increase, this is still a pretty large price increase pressure.

Fair point regarding possible tariff reversal effect on industry investment!

Rock <-USA-> Hard place. At least deflation is not going to be an issue...

[JumpCrisscross]

I don’t doubt the message. I was just surprised at the lack of citations in the article. Then I learned about the source’s bias.

[biophysboy]

It’s just a summary of the recent Q2 earnings presentations from the big retailers (the writer cites this 1st sentence). Look at those reports if you want primary sources

[dqv]

What do you mean by lack of citations? You mean self-linking to their own content? All the other alternatives, including the one you said "is a better source", do the exact same thing. I am having a hard time finding the ideological bias you're talking about in the El País article.