Dear President Donald Trump.
Walmart Executives must privately see you and your Tariffs as working against their viable
business, inflating the Cost of Living for their Customers and restricting growth in the
American Economy. Also, why you think you are qualified and competent to interfere in their
business and the market place for Americans, struggling with inflation, the cost of living and
debt.
The business of business is business. The role of Politicians and Politics is Government.
Tariffs are Politics applied to business by Politicians who have no understanding of the
adverse impacts on the business, the consumers and the Nation i.e. the Volume/Cost/Price
MIX and Export Cost INDEX.
For 15 years I was an Executive in the paper converting and printing industry, a large
industry and employer. We got a licence from JIFFY USA for our domestic and export
markets which justified the purchase of the paper converting machine from the USA. The
process required a special kraft paper. The Local Paper Mills protected by high Tariffs would
not supply this paper, so we had to import and pay the high Tariffs. This inflated the prices of
the Jiffy padded bags creating buyer resistance, limited production and sales both
domestically and for export. In the factory we had made provision for a second machine to be
imported from the USA. This did not eventuate because of high Tariffs on the imported paper
required for the converting and printing machine.
The Local Paper Mills were protected by high Tariffs with the following disastrous economic
and financial outcomes for –
1) The Paper Mills who restricted their product range – did not produce papers readily
available overseas – did not innovate new papers for waiting markets e.g. photo industry
photo wallets – consistently delivered paper that did not meet the agreed specifications.
These deliveries had to be returned to the Mill causing delays for our customers and lost
orders, sales and profits e.g. Reader Digest. – only supplied in sheets when reels were
ordered for high-speed machines – I could write a book about our adverse business
experiences with these Tariff protected Paper Mills which have since closed.
2) The Converters who had to restrict their product range because of (1) – had to import and
pay tariffs creating high prices and buyer resistance. – increased our costs by employing
an industrial chemist to check all paper deliveries and return papers not to specifications
resulting in lost order, sales and profits – could not buy paper in rolls for high-speed
machines increasing and costs with losses on orders – a business and customer disaster
all round.
3) Domestic Markets and Customers – unable to supply products to meet their business and
customer needs – tariff inflated sales prices creating buyer resistance and limited demand
with uncompetitive Volume/Cost/Price MIX – delay in deliveries, replacing Papers not up
to specification causing lost orders, sales and profit – also unrecoverable down time on
converting and printing machines waiting for paper deliveries – customers importing
products from overseas – a business, customer, National Economy disaster all round.
4) Export Markets and Customers – as in (3) with limitation on market share and profits from
overseas operations.
5) Business customers, retail consumers and the National Economy – unable to supply at
market demand prices products readily available in overseas markets – imports replacing
domestic production and employment i.e. exporting jobs and cash to pay for imports.
Bureaucratic intervention and decision making by Government not qualified and
competent in business.
From my 15 year business experience of Tariffs, if you think they work for US business,
consumers and the Economy and Financial position of America you must have rocks in your
head.
Derek Smith CA
Your disillusioned Aussie Mate.