Can someone explain the Math to me behind this?

[Anonymous]

Trump has imposed 25% tariffs on India. The implementation has not started. However, my favorite brand of an Indian pickle has gone up from $2.99 to $4.29 already which is 43% hike. I am going bonkers with grocery bills at all types of stores.
Can someone explain the Math to me? I thought 25% hike would mean 25% extra that we now pay when things get implemented.
No?

[Anonymous]

Anonymous wrote:Trump has imposed 25% tariffs on India. The implementation has not started. However, my favorite brand of an Indian pickle has gone up from $2.99 to $4.29 already which is 43% hike. I am going bonkers with grocery bills at all types of stores.
Can someone explain the Math to me? I thought 25% hike would mean 25% extra that we now pay when things get implemented.
No?

Google “gouging.”

[Anonymous]

Write to the pickle company or even better, put this post on social media and tag them. Ask for an explanation or indicate it’s now a luxury good and you will have to cut back.

Typically the producers, importers and retailers are each taking a bit of a hit and only a portion of the tariff is being passed to the consumer. Sounds like your pickle production line is doing the reverse and everyone is using it as an excuse to pile on.

[Anonymous]

Tariffs will result in higher consumer prices. Tariffs also provide narrative cover for higher consumer prices even if the product isn't directly affected yet (i.e., consumers have been conditioned to expect higher prices). Prices are going up everywhere. The grocery trip is unbelievably painful right now.

[Anonymous]

It’s nothing more than price gouging. Simple as that.

[Anonymous]

Anonymous wrote:It’s nothing more than price gouging. Simple as that.

Can you define "price gouging" for us?

[Anonymous]

Anonymous wrote:It’s nothing more than price gouging. Simple as that.

Maybe the higher price is them collecting money up front to pay the tariffs.

[Anonymous]

Anonymous wrote:Trump has imposed 25% tariffs on India. The implementation has not started. However, my favorite brand of an Indian pickle has gone up from $2.99 to $4.29 already which is 43% hike. I am going bonkers with grocery bills at all types of stores.
Can someone explain the Math to me? I thought 25% hike would mean 25% extra that we now pay when things get implemented.
No?

What's the brand?

[Anonymous]

It’s not math, it’s psychology. They increase the price so much because they think you’ll still pay it. And yes you’re right that it’s not because of the tariffs, it’s because of greed. They think people will blame Trump/tariffs while they walk away with a ton more profit, so they figure why not.

[Anonymous]

It's also possible that the company has multiple products and some have head-to-head competition and some don't. In order to pay the tariffs, a company could increase the price on its products without competitors and lower the price lower on products with direct competition to continue to drive demand.

It's not as simple as old price + tariff = new price.

[Anonymous]

Adding on the last comment, the price they charge to make a profit would likely change with the volume sold (for example, if there is a set marketing cost or distribution deal that can’t change) and the tariffs are likely to decrease volume of sales. Also, uncertainty can increase cost as well if they can’t commit to long term deals (for storage, staffing etc).

[Anonymous]

Anonymous wrote:They think people will blame Trump/tariffs while they walk away with a ton more profit, so they figure why not.

And it worked. Everyone is blaming trump tariffs as hoped.

[Anonymous]

Maybe the higher price is for the retailer to see if customers will still buy once the tariffs hit, so he doesn’t get stuck with a bunch of expensive pickles. If not, then he doesn’t restock. Seems smart to me.

[Anonymous]

Anonymous wrote:Trump has imposed 25% tariffs on India. The implementation has not started. However, my favorite brand of an Indian pickle has gone up from $2.99 to $4.29 already which is 43% hike. I am going bonkers with grocery bills at all types of stores.
Can someone explain the Math to me? I thought 25% hike would mean 25% extra that we now pay when things get implemented.
No?

The retailer will increase the price on all goods, even those made in the US, because the consumer has already been conditioned to expect a "tariff" price increase. This is just them front-running that. With Indian stores, they have a captive, affluent customer base so... why not?

[Anonymous]

And once people cut back because they can only afford less, retailers will either slash their prices or go out of business because most people have a hard limit on their available funds.