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Joined 2 years ago
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Cake day: August 18th, 2023

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  • IMO you’re aiming your ire at the wrong target. This is what happens when major economies apply tarrifs to components used in retail products that ship globally.

    They’re not doing it to “appease Americans”, they’re doing it to protect their bottom line. Blame capitalism. Blame “fiduciary responsibility”. Blame Trump. But the execs at these companies don’t really have a choice here.

    It works like this:

    • Tarrifs, if passed only to US consumers, would raise the price of the product by, let’s say, 30%
    • A bean counter determined that the loss of revenue from decreased sales in the US with that kind of price hike would be more than the loss of revenue if they spread the cost across the globe.
    • In other words, the math looks something like (US-sales@130% + Global-sales@100%) < (US-sales@115% + Global-sales@115%)
    • Fiduciary responsibility forces leadership to do whatever is best for their bottom line, or they risk being ousted AND sued by shareholders for failing to act in their best interests
    • Now that they know which approach is more profitable, their hands are tied unless they can make a REALLY compelling case why taking a big loss now will create a bigger win later (which is extremely hard to do in this kind of situation)

    The whole system fucking sucks. It’s grotesque. But that’s what’s going on here. Not some “oh no don’t anger the Americans” politicking.

    It’s about dollars. It’s always about dollars. And multiple countries have literally written laws to force publicly traded companies to maximize dollars for shareholders.

    I don’t say all this as some argument for buying Xbox/Sony products. I simply want to point out that the problem here is the system itself, because even if Sony or Microsoft were to drop out of the business tomorrow, the next publicly traded company to fill the void would do the exact same thing.

    And there are plenty of other problems with privately owned businesses.

    Pick your poison 🤷