Lorianne LaRocco
Appearances
Today, Explained
The two dolls economy
The containers are telling us right now that in the coming weeks, we are going to see shelves starting to get a lot thinner, maybe not bare, but we will definitely see less items on the shelf. When you're looking at the U.S.
Today, Explained
The two dolls economy
I am feeling like I want to die and that this is complete torture. I just deleted the app.
Today, Explained
The two dolls economy
supply chain and you're looking at what we bring in, it doesn't matter if it's made in America or even assembled in America, which you're going to hear a lot of that in the coming months. Assembled in America doesn't mean that all the components are made in America. And you will have assembled in America products no longer being able to be made because the components come from China.
Today, Explained
The two dolls economy
If you look around your apartment or your house or condo, 90% of everything that is in your home comes on a vessel. And a lot of those products come from China. So furniture. Your laptops, your cell phones, because remember, it's that supply chain standpoint. It may not be 100% from China, but the components that make it critical to get them done, they're from China.
Today, Explained
The two dolls economy
The next time you want to go buy a flat screen television, I would say probably in the middle of June and then after, they will be more expensive. And the reason why I'm being targeted, if you will, from like the June standpoint, is the fact that the 145% plus tariff from China has not been deployed until May 27th.
Today, Explained
The two dolls economy
May 27th is the day that all items that are coming from China will have that new level of tariff applied to them. The tariffs that have been deployed can easily be digested by the retailer or brand because it's 20%. Yes, it's a lot more, but it's not the 145 that is going to be, you cannot absorb that. And that's when you're going to see the high price.
Today, Explained
The two dolls economy
You know, I would say panic buying is like the worst thing that we can do because that's what happened with the toilet paper.
Today, Explained
The two dolls economy
Customers walking the aisles multiple times, hoping to get lucky. We made toilet paper in the United States. During the pandemic. During the pandemic. I mean, if we can't learn anything from that, please do not go and panic buy. I would say that if you're on a budget, like say you've got kids, right? And you're staring down back to school, do something smart and like go to your favorite retailer,
Today, Explained
The two dolls economy
go now and buy their fall clothes on discount. That way, if they do have that growth spurt, you're not going to be really upset if they outgrow it. But if you need to get that laptop for your college student or that flat screen TV, buy it before the middle of June. But that's not like a panic buy. That's almost like being strategic in your dollars and Do you think this will be like the pandemic?
Today, Explained
The two dolls economy
I don't think it will be because of a couple of things. So back during the pandemic, the U.S. consumer was at a healthier standpoint. We did not have inflation. And we were all stuck at home. So we couldn't go anywhere. So our vacation money went to going to buy a ping pong table or whatever. Now we've got inflation. People are scared to spend money.
Today, Explained
The two dolls economy
And it's this unknown in terms of the trade war is global. And so like you mentioned your friend with wine, I mean, I can understand with your friend because I'm a huge Italian wine drinker. And so I was just like, well, should I stock up on my favorite Brunello? That I can understand. But it's going to be different in terms of we will have the supply chain crunch.
Today, Explained
The two dolls economy
We will have supply chain shortages. But it'll be in select items, but everything will be a lot more expensive. And so I really feel about this like transitory inflation because... Supply chain is like a series of pipes. It's plumbing. Trade has to flow. And so eventually, if and when these trade wars get handled, you're going to have these pause buttons be unpaused.
Today, Explained
The two dolls economy
And then you're going to have all of these orders trying to get on a limited amount of vessels. that is going to increase the price of the product. So if we're paying crazy prices in a month from now, and then the pause button gets unpaused, those prices are going to go even higher because logistics prices are passed on to the consumer. So heaven knows where we will be going.
Today, Explained
The two dolls economy
No, because when it comes to the supply chain, think of a timeline. OK, during this time between now and early June, this is when the retailers, both small and large, we're talking about even like the mom and pop retailers, OK, all the way to the Walmarts.
Today, Explained
The two dolls economy
This is when they actually start placing their orders for the holidays because those items have to be here in the United States by August or September, the absolute latest. And so you've got to tick backwards. It takes anywhere from two to four weeks for those items to arrive from China by the vessel, but then you have to tag on at least two to four weeks to make the product.
Today, Explained
The two dolls economy
So this is like now or never. And how can a company make orders, prepare orders if they don't know, A, if we're going to buy anything, and B, how are we going to pay 145%? So all of this uncertainty is leading to this decision gridlock, and that's why nothing is being made. So this is more than just getting our cheap product. It's about jobs. It's about moving the truck workers, the warehousing.
Today, Explained
The two dolls economy
All of these people, the world of trade is connected on so many different levels.
Today, Explained
The two dolls economy
The market doesn't know anything. The market is literally, no, no. The smart money is banking on optimism. They're banking on the possible promises of trade deals to be made. Last week, we had Lutnik on, and he was saying that there was a deal.
Today, Explained
The two dolls economy
Well, then it's not a deal. It's rhetoric. And when it comes to the markets and when it comes to the traders, because everything is fear-based and it's that knee-jerk reaction, they're reacting to these possible headlines. They're not looking at the long term.
Today, Explained
The two dolls economy
My advice would be like, you got to use a little bit of honey to get where you want to go. It would be great to make things in America. But from everything who I've spoken with, both from a supply chain standpoint, from a company standpoint, there's not enough people in order to do the job. There's not enough educational level of people to do the job.
Today, Explained
The two dolls economy
And also, are you going to subsidize the small businesses? Noel, I have one contact, their container, they were paying for one, $40,000 in tariff. That same container is now going to be a million dollars. How the heck are they going to pay that? They can't. It's not just paying the tariff. It's the intricacies. It's the jobs. Like this person, they assemble in America.
Today, Explained
The two dolls economy
So now they're gonna have to close up shop. They're gonna have to fire their manufacturing staff. Then the trucking company that moved their product, they're gonna be out of people. The lunch rooms that service the people that went out to lunch, they're gonna have less people to serve lunch to. There's a whole ecosystem here.
Today, Explained
The two dolls economy
And so my advice to the Trump administration would be look at the entire supply chain and how everybody is interconnected. Because that's what makes the economy great. And they fail to see that.
Today, Explained
The two dolls economy
This is Today Explained. My name is Lorianne LaRocco, and I am the global supply chain reporter for CNBC, and I'm also the author of Trade War, Containers Don't Lie. All right, so what are the containers telling us right now?