Have you been shopping for any Labor Day bargains this weekend? If not, you might check out the deals on washing machines. Or just wait a little longer and you could save even more money.
Why on earth am I giving out this kind of consumer advice? Because in recent months, data pointing to soaring prices for these appliances were repeatedly touted as proof that the kinds of tariffs slapped on these goods early in the year – and representative of the trade policy approach generally favored by President Trump – would backfire on American consumers and seriously weaken the consumption-driven U.S. economy.
The tariffs on large residential washing machines went into effect in January, when President Trump approved a recommendation from the U.S. International Trade Commission (USITC)– an independent federal agency – to use such measures to counter a surge of these appliances that threatened the viability of domestic producers. (In this way, they did not result from trade diplomacy being conducted by the administration aimed at reworking existing trade deals like the North American Free Agreement or allegedly lopsided relationships like U.S.-China trade.)
But although prices for these appliances have shot up, advertising for dishwashers that’s appeared this weekend indicates that more powerful countervailing economic trends – trends that, incidentally, have hardly been secrets – will quickly begin bringing them back to earth. Specifically, as I’ve noted, despite moving into its tenth year, the current American economic recovery has been too weak, wages and incomes have been too stagnant, and consumers have been too cautious to permit such prices to stick for any serious length of time.
As a result, I wasn’t at all surprised to see Best Buy, a pretty typical appliance retailer, offer the following specials:
>A Whirlpool model marked down from $474.99 to $349.99. (More than 25 percent off.) Whirlpool, incidentally, was the plaintiff in the USITC trade law case that resulted in the tariffs;
>A KitchenAid machine being discounted by nearly 18 percent from its $1,034.99 list price – on top of free installation;
>Two Samsung washers being offered for more than 18 percent less than their $674.99 list price.
>An LG model on sale for $749.99 – nearly 17 percent below its $899.99 list prices.
And P.S. All these offers entail a price match guarantee, as well as “open box” versions of these products that can be had for much, much less.
And don’t think for a minute that washing machines are the only tariff-ed product for which price predictions are looking awfully Chicken Little-ish. Right after President Trump made his initial announcement of tariffs on steel and aluminum imports, Commerce Secretary Wilbur Ross was widely ridiculed for going onto CNBC and using cans of soup as props to argue that the levies would only marginally impact the prices of these goods. Moreover, canned goods producers strongly disagreed.
Yet as reported last week by Breitbart.com‘s John Carney, the latest official inflation figures show that, as of July, the prices of a variety of canned goods – from soup to fruit – have actually fallen year-on-year. Canned beer and vegetables did get more expensive, but by a mere 1.40 percent – much less so than the overall 2.40 percent rate of inflation. And the prices of other metals-using products, like cars and trucks and auto parts, were up just fractionally at best.
I’ve noted previously that there are any number of valid arguments that can be raised against the Trump trade policies. And no one has a perfectly clear crystal ball. But with the predicted effects on employment, output, investment, and now consumer prices so far not coming close to panning out, it’s now clear that the tariff opponents are rapidly running out of arguments.