We’ve just lived through the first 100 days of the 2nd Trump presidency.  On the equity market front there has been a lot of predictions and a lot of ups and downs. . . . However, as far as funeral service or Death Care goes, where are we and what can we expect going forward?

Let’s look at tariffs first.  So, I’ve known about tariffs and heard about them almost all of my adult life. . . . but, I really didn’t understand how they worked and what the larger-world effects on changing the status quo with them might mean.

Tariffs:

I’ve done some research and searched out some people who know much more than I do about them and here’s what I am beginning to think about tariffs and the Death Care industry.  Obviously, tariffs cannot be levied on professional services done within one country, so the vast majority of Death Care, especially funeral home professional service charges, will have nothing to do with tariffs.

What they could affect at some point in time are the costs of wholesale merchandise or supplies being brought into the United States for the Death Care providers.  The largest of those would probably be caskets and raw materials, or finished products, for monuments in the cemetery business.

Here’s what I’ve learned at this time about those products:

Caskets —  There are some caskets manufactured in China that have American distributors.  I’m under the assumption that these caskets come under the current tariffs on Chinese made goods which will raise the price upon entrance into the United States, more than likely making the price to the funeral home retailer of such higher.

I’m also under the assumption that probably more than 80% of caskets sold by North American funeral homes are either manufactured or assembled in the United States, Canada, or Mexico.  In general, at least at this time, these caskets should be under the existing USMCA (U.S., Mexico, Canada) trade agreement exemption.  According to this fact sheet from the White House, “This means USMCA compliant goods will continue to see a 0% tariff, non-USMCA compliant goods will see a 25% tariff, and non-USMCA compliant energy and potash will see a 10% tariff.”

Stone and Monuments —  According to some sources, a large percentage of raw stone and finished monuments used in the Death Care profession comes from China.  As mentioned above, I would expect that there are tariffs on these products from China at this time which will raise their price.  Another source tells me that India is also a large exporter of these products.  This article tells us that the United States is India’s largest trading partner but the U.S. buys twice as much from India as India buys from the United States.  India and the U.S. are in a 90-day pause on any increased tariffs and the article states, ” (the) US and India want to finalize an agreement by September or October to more than double bilateral trade to $500 billion by 2030″.

The Economy:

I’ve worked in the Death Care profession, including my writing on it, for over 44 years now.  Most of that was as a funeral director on the front lines of funeral service.

In that time period I’ve heard all of the cliches about death, dying, and funerals.  While there is a perception that the economy does not affect this business, I think it does in a bigger way than most would believe.  I’ve seen what I call “funeral poverty” and how that situation plays out on the consumer and on the funeral home owner and his business.

With “funeral poverty” there simply is a group of client families where death hits them at just the wrong time.  It would be a time when they had little savings and little credit availability.  Those families, in my opinion, purchase less in the way of Death Care services and merchandise than they would have purchased had the death not hit the family at an inopportune economic time. . . . .Again, in my opinion, when this situation occurs within a family the services selected many times change from a traditional burial to a cremation with memorial service.

Is it possible that we are in a time period where we see an increase in “funeral poverty”?  If so, funeral homes can expect to see a loss of revenue per service as some families find themselves in a cash and credit crunch at the time of an unexpected death.

So, where is the economy at this point in time?  I think that question is really difficult to answer right now because of some of the mixed signals we get from economic indicators.  For instance, unemployment is low, but just the other day we received a negative GDP data report according to this article.  At the same time, consumer spending and investment activitity picked up. . . which would be positive indicators.

And to make things more mixed up, the chart below maintains that we had this negative GDP number because of increased imports simply to beat any tariffs that might be instituted.  The linked article says this about that situation, “Wednesday’s 0.3% annualized decline in GDP was driven by a surge in imports, as companies front-loaded orders to lock in lower prices ahead of the anticipated tariffs from the Trump administration. Imports, which increased at an annualized rate of 41.3% in the first quarter, are a subtraction to growth in the calculation of GDP and pulled the figure down by 5 percentage points for the quarter.”

So, when looking at the chart, do you believe the GDP fell because the “Economy is bad” or because of a “Pre-emptive purchase of supply chain” needs by retailers and/or manufacturers?

Quarter 1 2025 GDP Calcuations

To get you even more confused, companies like Starbucks, Chipotle, and Pizza Hut are reporting either decreased customer traffic or revenues for the quarter.  That is usually a sign that the consumer might be in one of the time periods where I suggest that “funeral poverty” is a situation for them.  Here are some articles on those situations:

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I think we are living in some interesting economic times.  In just looking at two criteria — tariffs and GDP — it is difficult to tell what type of economic situation that we are in.  Add in the fight to keep the original Trump tax cuts in place or better, the role of inflation,  consumer spending, and the decisions the Federal Reserve needs to decide about interest rates and about the only thing that you can see at this time is that there is “no clarity” to the direction of our economy.

I’ll let you ponder all of  that as you go into the weekend.  Have a great weekend.

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The International Trade Association defines tariffs as such:  “A tariff or duty (the words are used interchangeably) is a tax levied by governments on the value including freight and insurance of imported products. Different tariffs applied on different products by different countries.”

I’m writing this on Saturday morning and the “Trump tariffs” are supposed to be imposed on certain imports from Mexico, Canada, and China today.  How might that affect Death Care?

It’s easy to see why countries want to sell their products in the United States.  Democracy and free enterprise have made the United States  arguably the nation with over 300 million consumers who have the most spendable income in the world.  The “consumers with spendable income” is the prize.

It’s a little like the Willie Sutton story.  Sutton, when asked why he robbed banks said, “That’s where the money is”.  Manufacturers of products from all over the world would say the same thing about selling their wares in America, “That’s where the consumers are”.  It’s easy to see why others want to have their products available for sale in America.

So let’s look at a basic reality of purchasing by consumers.  Let’s assume a “Widget” is built in some Far Eastern country for $20 and it costs $5 dollars to bring that product to the United States . . . that’s a total cost of landed product in the US of $25.  Let’s also assume that that “Widget” can be manufactured in America for $30 — the additional cost being the higher wages and First World level of benefits to employees. . . . pay and benefits that give America those “consumers with spendable income”.

In our example the foreign (low cost producing) nation lands their “Widget” in the US for $25 and the US manufacturing firm, paying better wages and benefits completes their “Widget” for $30.  Let’s also assume that each company needs a $20 margin on their product to operate their business.  That gives the foreign manufacturer a $45 price tag and the American manufacturer a $50 price tag.

Tom Anderson
Funeral Director Daily

President Trump has said he wants a 25% tariff on products coming from Mexico and Canada and a 10% additional tariff on products currently coming from China.  That tariff (or tax) will be paid to the United States government adding to our revenues.  And, on $25 that 25% tariff would equate to $6.25 making the final, taxed, cost of landing “that fictional Widget” in the United States $31.25.  Again, assuming that $20 margin, the final retail cost would be $51.25. . . .more than the comparable American product at $50.

The final theory being that that retail cost would not only allow for tax revenue to flow to the U.S., but it should make American products be the product of choice more often because of the closer price proximity to the foreign product.  And, more American products being bought will give more American workers jobs and be good for America.

The downside, however, is that American consumers no longer have access to that “low-cost” product from a foreign country because its price has went up due to the tariff.  And, that is generally considered a negative for the American consumer.

Another downside, of course, is that American manufacturers want to sell their products in other countries around the world.  And, those countries have the ability to put tariffs on American-made imported products.

Of course, President Trump has a firm belief that those tariffs on America products is already being done and American manufacturers are being taken advantage of and being charged these tariffs.  Part of his logic on tariffs is “What is good for the goose is good for the gander”.   However, many see President Trump’s viewpoint on that particular fairness issue as not totally correct.

What about Death Care:  A large portion of Death Care revenue is “Services” and not merchandise.  In a world of tariffs that’s a good thing for Death Care.  However in checking, and I will not call out individual companies, but it appears that some major distributors of caskets in America either manufacture or purchase for distribution caskets built in whole or in part in Mexico, Canada, and/or China.

So, one would expect, unless there is a carve-out for Death Care products, those caskets made in Mexico and Canada to have this tariff of 25% put on them and for caskets coming from China, one would expect President Trump’s tariffs to add 10% to those units.

In my way of thinking, this is just another reason why true service charges should be increased, set, and priced and the price of products that are sold by Death Care providers,such as caskets, should be at or near cost with little mark-ups.  It was back in the late 1980’s or early 1990’s that my funeral home greatly raised our service charges and set our casket prices at the actual wholesale cost.  It was a decision that greatly increased our profitability.

Related — Tariffs helped build the United States of America — Most people don’t know but the Tariff Act of 1789 was the first major piece of legislation passed by Congress after the ratification of the United States Constitution.

The Tariff Act of 1789 — Wikipedia

From this passage of the Wikipedia insert you realize that some of the same arguments are made by some of the same consituencies in the arguments as today.  i.e. tax revenue, American manufacturing and industry, consumer costs, and fairness. . .

“The debates over the purpose of the tariff exposed the sectional interests at stake: Northern manufacturers favored high duties to protect industry; Southern planters desired a low tariff that would foster cheap consumer imports. Ultimately, (Congressman and future President James) Madison navigated the tariff to passage, but he was unable to include a provision in the final bill that would have discriminated against British imports. After passing both houses of Congress, President Washington signed the act in law on July 6, 1789 when they used it to pay off the US war debt.”

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