HOT GIRL Politics

– HOT GIRL Current Events –

Take a look at your daily latte, which normally costs you an average of $5.46. You notice that the price of the latte starts going up over the next couple of months, and your latte now costs $8.19. That’s $2.73 more dollars you’re spending every day on breakfast. So, how does this happen? 

Tariffs seem to be all the rage since November 6th, with searches for “what is a tariff” having spiked to the tune of 1650% since the Presidential Election, followed closely by a significant increase in “who pays tariffs.” With the current administration’s threat of 50% tariffs on Brazil, your morning pick-me-up may be getting a little more expensive. 

Most simply, a tariff is a tax on imported goods. A third of the United States’ coffee comes from Brazil, keeping in mind we import almost 285,000 metric tons of Brazilian coffee every year, all that joe just got a lot pricier. Adding an additional 50% cost on top of an import will make the buying process more expensive. Think about it, you’re adding 50% of the cost of 285,000 METRIC TONS of coffee. At just over 2,205 pounds per metric ton, that’s a total of a whopping 628,318 pounds of coffee imported every year from Brazil. (psssst that’s the equivalent to almost two entire blue whales) 

A frequent trade negotiation strategy, tariffs are used as leverage in trade agreements. In this case, President Trump is reacting to what he has called a “witch hunt” against political ally and former Brazilian president Jair Bolsonaro, who is on trial for attempting a coup. The US is making it more expensive to purchase coffee from Brazil, so buyers are inclined to look for different options, reducing the South American country’s profits in the American coffee buying market. 

That asks the question: “Does it work?” What often gets overlooked during talks of tariffs, is that the United States lacks the industry. If we can’t afford to buy coffee from Brazil, we can’t rely on our own production to make up the lost 30%. While coffee is grown in Hawaii and Puerto Rico, it is limited, growing only on a small scale. We simply don’t have the environment for coffee cultivation, which is why you don’t see “home-grown” coffee while walking down your grocery aisle. The industry is not capable of existing here, so we will continue to buy coffee from Brazil, but now at a higher cost. 

So what happens after that? We are still buying our coffee from Brazil, even with the tariff, and that extra 50% needs to be paid for somehow. When companies go to buy the imported Brazilian coffee, which is now much more expensive, they have two options: 1) absorb the cost of the tariff and decrease their profit margins, but keep pre-tariff costs the same, or 2) maintain their profit margins and pass the added cost on to customers. That could be why the latte you had a few paragraphs ago is now $8.19.

A Hot Girl’s Take

In the world of tariffs, anything could happen. Companies may agree to absorb the 50%, keeping costs the same, and you and I will see no economic impact, or customers may be expected to bear the cost of these tariffs, and we may be paying more for that morning latte, worsening our own personal economic situations. 
Tariffs: hot or not? Sorry, finance bros, but this hot girl says not. Tariffs threaten economic certainty, stability, and security. Many historians and critics point to the most infamous tariff policy, the Smoot-Hawley Tariff, enacted during the Great Depression, as largely responsible for worsening economic conditions. Stay tuned for your Hot Girl history on the Smoot-Hawley Tariff!Hot Girl Politics coming soon!