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How US enables China to sell tools cheap in USA

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  • flylo
    replied
    I remember when japan did almost the same thing & Harley Davidson was the only one that went to court & won & jap bikes had tariff's added. America is the only county I know that loses at everything if the government is involved. We win a war & rebuild the country better than new, any other county would own the losing county. We gave japan the TV business, china can't invent a damn thing bur copies & steals everything & nothing is ever done. The very people who lost jobs to china love buying chinese goods. We are doomed because of greed, stupidity & lack of being patriotic. Too late now.

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  • Mcgyver
    replied
    Originally posted by J Tiers View Post
    If the leaders DO take action, then china merely runs to the international trade court and "pleads poverty", getting the tariff/duty declared to be illegal. The idea that china is still a 3rd world country is laughable. .
    I'm not sure what court there'd be or obligation exists (other than the general WHO reduce tariff agreements), or who would have the power to enforce a sanction. But I'm not promoting a duty for its own sake, only a tactic to push them off some of the worst offending unfair trade practices. What other controls do you have? You can do it in such a way to send a message - first threaten, then put a 'temporary' tariff, then put in a high tariff on a very narrow set of goods and so forth.

    imo China does exactly Japan used to do and probably still does. The west believes in trade in the Adam Smith tradition of being best for both countries. That is suppose to mean bilateral and best is suppose to mean for the citizen and consumer. These countries trade differently, there are non tariff barriers to trade often government created (they do not seek bilateral trade) and they don't do it to better their citizens (to the contrary the currency for example hurts their citizens) they do it for market share. Its been described as economic warfare.

    Promoting no-tariff trade deals between like minded countries - no blatant undercutting subsidies and desire for bilateral flow is a good thing. To these economic warring countries....its less clear to me what the advantages to us are
    Last edited by Mcgyver; 12-05-2017, 09:39 AM.

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  • J Tiers
    replied
    If the leaders DO take action, then china merely runs to the international trade court and "pleads poverty", getting the tariff/duty declared to be illegal. The idea that china is still a 3rd world country is laughable. Liberia they are not.

    Originally posted by rklopp View Post
    I don't see how this helps the consumer. All this would do is drive up prices at places like Harbor Freight, taking more out of the consumer's pocket. Where would you propose that extra money paid by consumers go? It's not like consumers will suddenly have more disposable income so they can pay Starrett's prices. I can only see tariffs depressing the economy. What, exactly, should we be shipping to China if postal rates were comparable? Starrett tools?
    As you know, the whole idea of a tariff is to make the cost of an import item closer to the cost of a domestic produced item of the same type. The effect would be to reduce the speed of the "run to china" that all the US manufacturers have done. Maybe stop it or even reverse it.

    When a serious tariff was applied to the chinese goods in the form of high fuel costs, and resulting high shipping cost, a number of manufacturers pulled at least some manufacturing back to the US. That obviously was for companies that had not actually shipped their factory machines to china, as many had. The ones that had, were just over a barrel.

    I recall some, an HVAC manufacturer in Kentucky, for instance. The CEO commented that they were really glad they had kept the factory intact, despite the demands of their bean counters to scrap it out. The move was partly cost, and partly the QC problems that they had been having. No idea what happened wen fuel cost went down again.

    The consumer would see a higher price, but then, there would be more consumers working instead of collecting unemployment or taking day labor jobs.

    The tariff is intended to prevent a low cost source sucking all the jobs and money out of an economy, the way the chinese have done.

    Far from being "subsidized", the US economy has been co-opted to pay for new chinese factories, cities, military, and so forth. We PAID for that, "subsidized" that, whether we liked it or not, because Walmart etc forced us to. And, of curse, there was the "giant sucking sound" as the jobs all fled to china.

    The US music equipment industry, for instance, has virtually all been vacuumed right out of the US and put in china. I saw it happen. It is just one example of that same thing.

    So much for "subsidizing an economy".... It would be more accurate to say "taking the core and structure out of the economy, and turning it into a 'colonial' economy, totally dependent on the 'mother country' (in our case, china).
    Last edited by J Tiers; 12-05-2017, 12:00 AM.

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  • Mcgyver
    replied
    Originally posted by Robin R View Post
    I don't think world trade has ever been about fair, more just what you can get away with. Plus the Chinese are probably still pissed at being forced to accept opium, in exchange for their manufactured goods.
    Fair in terms of trade isn't like "lifes not fair", its whether your country views the others behaviour as in kind and balanced. Is fair to the extent that should you should let it continue or make an adjustment. When foriegn governments heavily subsidize, which should generate a cry of foul, and which in essence is what China's currency policy has been....most would deem that an unfair trade practice. imo a duty is an appropriate response. We should expect our firms to compete globally, but not against the Chinese government. Of course (in perfect hindsight) that doesn't mean our leaders do anything about it.

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  • Robin R
    replied
    I don't think world trade has ever been about fair, more just what you can get away with. Plus the Chinese are probably still pissed at being forced to accept opium, in exchange for their manufactured goods.

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  • Mcgyver
    replied
    Originally posted by rklopp View Post
    I don't see how this helps the consumer. All this would do is drive up prices at places like Harbor Freight, taking more out of the consumer's pocket.
    You are 100% right. What so many don't get is that benefit of trade - the low cost nation essentially subsidizes your standard of living.

    However, the idea of a duty is not as a solution, its a negotiating tactic- about the only card you hold. Two key unfair trade practices China uses are the pegged currency and susidized shipping. If for example the government had not supressed the yuan, harbor freight tools would be more expensive. Not good you say? Well higher priced harbor freight tools mean there be a healthier domestic tool manufacturing industry. An offset....and you'll have to pay the piper one day they can't supress forever (in fact they have moved recent pegging to a curreny bundle, however after two decades of devastating our economies while of governments did nothing) My view is that market equilibrium is what we want.

    So the tariff, or threat of one, is "hey China, stop the nonsense with the yaun, or stop giving away China post overseas to businesses or we're enacting a 20% duty. You don't want to have a duty, but you have to do something to stop being pushed around. I'm fine with Canadian or American business having to complete on a global basis, but not with huge government unfair trade practices.

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  • J Tiers
    replied
    As for products shipped into china.....

    A former employer sold millions of dollars of US-made musical equipment in china, for a number of years in the 1990s. It can be done.

    That stopped suddenly, when a chinese company copied every detail, down to the logo of the US circuit board etching company on the PC boards, AND our address in the US. It would have been hard to prove we did not make the stuff, except they used asian transistors, and we did not. That killed the market, the customers became convinced that they had been fooled by a chinese company all along, and quit buying. They WANTED US made stuff, and would pay for it.

    Originally posted by rklopp View Post
    ...... I'm not understanding how high Chinese tariffs keep Apple and Nike products out of China, if they are made in China.
    Some products made in china are not allowed to be sold in china. Not for security etc reasons, but for economic reasons which I have never had explained to me. They are export only, similar to the old "duty free" shops.
    Last edited by J Tiers; 12-04-2017, 10:31 PM.

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  • rklopp
    replied
    I am not following your argument as to which US products would flood into China but for Chinese tariffs. AFAIK, among those on your list, Apple and Nike, at least, are not made in the US. I'm not understanding how high Chinese tariffs keep Apple and Nike products out of China, if they are made in China.

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  • Machine
    replied
    Originally posted by rklopp View Post
    What products, specifically, are you talking about?
    http://bfy.tw/FOG5

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  • rklopp
    replied
    Originally posted by Machine View Post
    If Chinese tariffs and import restrictions were removed, our products could become cheaper and much more accessible there.
    Is this premise true? What products, specifically, are you talking about? Is there no Chinese market for, e.g., Starrett tools because of tariffs? They'd still cost too much over there if the tariffs were zero. I am genuinely struggling to think of American luxury products that that the Chinese would want and could afford. The products aren't iPhone Xs (made in China), Lexuses (Japanese), BMWs (German), or Rolexes (Swiss). Bourbon?

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  • Machine
    replied
    Originally posted by rklopp View Post
    I don't see how this helps the consumer. All this would do is drive up prices at places like Harbor Freight, taking more out of the consumer's pocket. Where would you propose that extra money paid by consumers go? It's not like consumers will suddenly have more disposable income so they can pay Starrett's prices. I can only see tariffs depressing the economy. What, exactly, should we be shipping to China if postal rates were comparable? Starrett tools?
    It would do a lot more than simply "drive up prices for the consumer." IF we had truly open and free trade with China, where our products were not tariffed or otherwise subjected to non-reciprocated/unfair trade deals, then China can still sell their products here at nearly the same prices. Maybe not essentially free shipping on small items like discussed here earlier, but most everything else would still be very cheap (including the usual HF junk). BUT the difference would be American export products could start to get a foothold in China. If Chinese tariffs and import restrictions were removed, our products could become cheaper and much more accessible there. There is a swelling middle and upper class of millions of new consumers in China, and if there's one thing they enjoy spending their money on, it's western products, which certainly includes American products. We have a lot things, especially luxury items they'd like to have access to, and we'd like to sell them to the Chinese. Western products typically are of much better quality than Chinese good are too, which Chinese people are certainly willing to pay for. Good for us, good for them. That's what true free trade is all about.

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  • rklopp
    replied
    Originally posted by Machine View Post
    We need to ...put a hefty tariff on their products to pay for the postal differential...and any other differentials that need accounting for. The only thing they will understand is economic/trade hardball.
    I don't see how this helps the consumer. All this would do is drive up prices at places like Harbor Freight, taking more out of the consumer's pocket. Where would you propose that extra money paid by consumers go? It's not like consumers will suddenly have more disposable income so they can pay Starrett's prices. I can only see tariffs depressing the economy. What, exactly, should we be shipping to China if postal rates were comparable? Starrett tools?

    Leave a comment:


  • Mcgyver
    replied
    Originally posted by softtail View Post
    Trade deals
    what has that to do with the IPU which is the problem in this particular case? Its not clear to me why you think business would be so pro trade deals or that they hurt the population. Mostly trade benefits the public, businesses loved the protectionist policies and duties.
    Last edited by Mcgyver; 12-04-2017, 02:38 PM.

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  • Mcgyver
    replied
    Originally posted by lakeside53 View Post
    But do they subsidize? seem like an easy thing to say but their costs are a tiny fraction of ours. They are most likely charging "sustainable" rates.
    I didn't know it was even disputed, its what all the analyst/journalist say and is supported by anecdotes......how else do sell something for $2.00 including overseas shipping? Its in perfect keeping with Chinese government strategy - gain market share at the cost of their people, no different really than the currency being pegged.

    Paul, labour is increasing a red herring. That $2.00 chip is $9 here plus $7 shipping according for Fortune. the US seller is buying from the same source (with lower labour cost), the price difference is entirely transportation.

    Even the labour itself is a shrinking gap. I looked at having stuff made there last year, but the container load......was more expensive sourcing from there after transportation. Steel is the cost, energy is more, gross labour cost for skilled are now close 1/2 of here. Labour needs to be a big part of COGS to overcome shipping

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  • softtail
    replied
    Originally posted by Mcgyver View Post
    ????

    that doesn't make any sense to me, can you explain what you're talking about? You understand how the International Post
    Union & trety is suppose to work and why it isn't in this case?
    Trade deals

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