There has been a boatload of analysis, commentary, criticism, and speculation about the effects the new tariffs may or may not be having on the U.S. economy. I thought I'd throw some actual data into the mix.
One of my retirement activities has been orchestrating the disposal of all the "stuff" I've accumulated during the past 7 decades. This is what might reasonably be termed a "first world problem."
Books went years ago; Agatha Christie and John Dickson Carr collections to eBay, various fiction, history, and science books to the library. Clothes to Goodwill. Rocks, minerals, crystals etc to neighborhood children. High school and collegiate memorabilia to classmates. Now I'm working on collectibles - stamps, comic books, baseball cards etc. For these latter items, eBay is an excellent venue.
This summer I noticed a significant change in how the eBay sales were processing, and I began to track numbers. For the first 125 lots I sold this year, these were the shipping destinations:
United States 72
United Kingdom 26
Australia/NZ 10
Canada 8
Others 9 (Estonia, Czech Repub, Sweden, Norway, Sri Lanka, Singapore)
The next 125 exhibited a markedly different pattern:
United States 114
United Kingdom 5
Canada 2
Others 4
At the end of July, sales to foreign buyers evaporated. Instead of 40% going abroad, quite suddenly it was fewer than 10%. The reason became apparent when I looked at the invoices eBay was sending to the foreign buyers (example embedded at top). On a $35 purchase, but winning bidder was asked for $27 in shipping, tariffs, and taxes. The VAT had always been there [this lot going to the UK], but in previous years and at the start of this year I was able to ship small lots of stamps in regular mailing envelopes for USD $1.75 and my sales (typically less than $40) were not subject to tariffs. It was on July 30 of this year that the Trump-imposed tariffs were applied to "de minimus" items of modest monetary value. And I presume what the buyers of my items are seeing are reciprocal tariffs imposed by their home countries?
I have corresponded with some of my (former) buyers in Scotland and elsewhere. They are still interested in my material, but when they have to factor in the new "shipping" costs, my lots become unattractive.
I'm not suffering financially because for me this is discretionary hobby activity and basically a housecleaning operation, not a business. But I will bet you there are lots of small businesses (especially home businesses and side hustles) in the U.S. who are seeing a similar phenomenon be more impactful on their bottom line. I totally dismiss the claims of politicians that the U.S. economy is strong. The stock market does continue to approach new all-time highs, but that's because of an irrational enthusiasm regarding the "magnificent severn" stocks (AAPL, GOOGL, TSLA, NVDA, META, MSFT, AMZN). I will bet you a dollar to a dime that the weakness will show up not in the Dow or NASDAQ, but in the broad-based Russel 2000 index.
And this recent quote I find particularly baffling:
"The Federal Reserve is facing a difficult situation as the US economy shows strong growth and high productivity, yet hiring has significantly slowed... This divergence complicates decisions on whether to cool or boost the economy [via interest rates], with concerns about a potential jobless expansion despite investments in AI..."
Rising unemployment DESPITE AI? Correct me if I'm wrong (please. I'm no expert on such matters), but my understanding was that one of the major powers of AI was to improve efficiency by having the bots do the work formerly done by humans. I would think decreased unemployment would be expected, not a surprise.
Those who understand these sorts of things, please chime in with comments.
Related: A recent Bloomberg article is entitled Boomers Are Passing Down Fortunes — And Way, Way Too Much Stuff. "As the $90 trillion Great Wealth Transfer begins, millennials and Gen X aren’t just inheriting money. They’re being buried under an avalanche of baseball cards, fine china and collections of all sorts..." True that.