Replying to Avatar DrFell (Disgruntled Citizen)

Tariffs

Example: A pair of Denim Jeans made in China for Guess Brand. The Chinese manufacturer sells the jeans to Guess Brand for $10 a pair manufactured. Guess sells the jeans at retail in the USA for $100 (a $90 gross profit).

A 50% tariff on China means the jeans cost Guess Brand $15 instead of $10 (an $85 gross profit). A 50% tariff on Guess brand jeans, that retail for $100, changes the cost to the retail brand by $5.
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CensorThis 7mo ago

Sure, but there’s a lot more that goes into a company than just the cost of the jeans. Marketing, employees, rent, etc.

So, it could cost 80 dollars total to get 1 pair of jeans sold.

So, that extra 5 bucks is 25% of their margin.

Thats significant and would justify a 30% cut in stock prices.

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