The Indicator from Planet Money Trump's contradictory trade policies
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Dec 18, 2024 Dive into the complexities of tariffs and currency with insights from a New Jersey bag manufacturer. Discover how well-intentioned policies might strengthen global competition, and follow an entrepreneur's journey in balancing local production with overseas manufacturing. Uncover the challenges faced by small businesses amidst rising import costs and the intricate dance of negotiations they must perform. Additionally, explore the vital role of diversification in navigating unpredictable market conditions—all while peeling back the layers of trade and finance.
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Bogg Bag Origin Story
- Kim Veccarella, frustrated with her beach bag, invented the Bogg Bag.
- Inspired by Crocs, she sought U.S. manufacturers but ultimately chose China for production.
How Tariffs Strengthen the Dollar
- Tariffs increase the cost of imported goods, leading to reduced consumer demand.
- This decrease in demand strengthens the U.S. dollar and weakens the foreign currency.
Negotiating with the Factory
- Kim negotiated lower prices with the Chinese factory to offset some tariff increases.
- This further reduced demand for renminbi, weakening the Chinese currency relative to the dollar.