Tariffs, Un-intended Consequences

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Originally Posted by ZZman
In the chase for maximum profit companies looked to China. Walmart helped lead the charge. As corps become larger and swallow up more competition workers are no longer family but numbers on a spreadsheet. Automation has eliminated jobs as have other countries willing to work cheaper, pollute their countries, work in poor conditions and without benefits. Businesses and American consumers lead us here.

^^^This! ^^^This! ^^^This!

In their insatiable quest for inexpensive (cheap) goods, American businesses and citizens will put their own family, their good friends, and their friendly neighbors out of work - and have ZERO regret doing so. This issue could be corrected quickly and easily if American citizens showed the same nationalistic resolve as their Chinese citizen counterparts.

Scott
 
Originally Posted by ZZman
In the chase for maximum profit companies looked to China. Walmart helped lead the charge. As corps become larger and swallow up more competition workers are no longer family but numbers on a spreadsheet. Automation has eliminated jobs as have other countries willing to work cheaper, pollute their countries, work in poor conditions and without benefits. Businesses and American consumers lead us here.


We have greatly automated in the interest of HSE and efficiency … but my labor costs when up. Why? I have more engineers, mechanics, hydraulic techs, ET's, IT, HSE, and planners … less unskilled workers …
Automated equipment is safe until you don't maintain it and program the zones constantly … then big wrecks happen …
With productivity up … the whole supply chain needs more workers and so on …
 
Speaking economically, not politically it seems the metric for jobs and tariffs is that for every job returned for a tariff, about 5 are lost in other industries due to retaliation.

Tariffs are a losing game.

The current estimates seem to follow along. About 30k steel and other metal workers have gone back to work, but close to 150k jobs are now on the bubble.

This relationship doesn't care about your political leanings, you cannot tinker with the market without unintended consequences, no matter how pure your motives might be.
 
At our work we sell to various industries (machine tools) and the auto industry in Canada which is primarily in Ontario has had to hold off buying a lot of new equipment from us because their customers (auto-industry manufacturers) have asked them to put the brakes on inventory of parts they are producing until all this mess is sorted out with tariffs in case things go wrong and they need to move operations. It has really put a damper on sales, but once it's sorted out (which we are confident will happen soon with the new trade agreements between North American countries) it will be like Christmas as we get a ton of orders all at once.

In the mean time it sucks big time and there was no reason to create this nonsense in a global economy.
mad.gif
There is no way to go back to protectionism!
 
Last edited:
Originally Posted by javacontour
Speaking economically, not politically it seems the metric for jobs and tariffs is that for every job returned for a tariff, about 5 are lost in other industries due to retaliation.


So, where are all the unemployment claims at?
 
Originally Posted by Y_K
Originally Posted by javacontour
Speaking economically, not politically it seems the metric for jobs and tariffs is that for every job returned for a tariff, about 5 are lost in other industries due to retaliation.


So, where are all the unemployment claims at?


I believe they will be coming.

Just a recent story about a nail manufacturer a 2 to 3 hour drive from St Louis: https://www.missourinet.com/2018/09...could-be-in-its-last-month-of-operation/

https://www.npr.org/2018/07/22/631254971/missouri-nail-factory-manager-on-steel-tariffs

If companies need exemptions from the tariffs to stay in business, how effective will they be?

Understand this about tariffs, it's not the producer who pays them. The importer pays them and the costs are passed along in the prices of the goods made from the imported materials.

If steel and aluminum are more expensive, cars, trucks, buildings and other things will be more costly.
 
Originally Posted by Bluestream
Originally Posted by Vern_in_IL
It's incredibly stupid of your company to be making these decisions. The Trump Admin and China have yet to finalize a deal... and they will. You make decisions after a deal is struck, not before or you might get screwed!

I came on here asking about investment advice before Trump was elected, nobody knew anything. Certainly I would not be making moves until a deal is struck!

There will be no deal with China. Talk of deals are just to prop up the stock market. They stopped buying UST's a few years ago (thus sterilising US trade deficits) Supply chains are changing and they will be unintended consequences.

Remember US consumer pays the tariffs, not China.

No deal? China is in a panic. They need us a lot more than we need China.
 
Originally Posted by javacontour
Originally Posted by Y_K
Originally Posted by javacontour
Speaking economically, not politically it seems the metric for jobs and tariffs is that for every job returned for a tariff, about 5 are lost in other industries due to retaliation.


So, where are all the unemployment claims at?


I believe they will be coming.

Just a recent story about a nail manufacturer a 2 to 3 hour drive from St Louis: https://www.missourinet.com/2018/09...could-be-in-its-last-month-of-operation/

https://www.npr.org/2018/07/22/631254971/missouri-nail-factory-manager-on-steel-tariffs

If companies need exemptions from the tariffs to stay in business, how effective will they be?

Understand this about tariffs, it's not the producer who pays them. The importer pays them and the costs are passed along in the prices of the goods made from the imported materials.

If steel and aluminum are more expensive, cars, trucks, buildings and other things will be more costly.

Taxes are also passed along but plenty talk about how great those are. Usually the same people panicked about tariffs.
 
I've consistently said that tariffs are taxes placed on the buyers of imported goods.

I am perplexed the political "flexibility" where people who were normally pro-tariffs are now against them and vice-versa. Such flip-flopping is political.

I've consistently been against them because they are typically bad for the consumer, not to mention more workers are typically hurt vs the numbers helped.

Originally Posted by hatt
Originally Posted by javacontour
Originally Posted by Y_K
Originally Posted by javacontour
Speaking economically, not politically it seems the metric for jobs and tariffs is that for every job returned for a tariff, about 5 are lost in other industries due to retaliation.


So, where are all the unemployment claims at?


I believe they will be coming.

Just a recent story about a nail manufacturer a 2 to 3 hour drive from St Louis: https://www.missourinet.com/2018/09...could-be-in-its-last-month-of-operation/

https://www.npr.org/2018/07/22/631254971/missouri-nail-factory-manager-on-steel-tariffs

If companies need exemptions from the tariffs to stay in business, how effective will they be?

Understand this about tariffs, it's not the producer who pays them. The importer pays them and the costs are passed along in the prices of the goods made from the imported materials.

If steel and aluminum are more expensive, cars, trucks, buildings and other things will be more costly.

Taxes are also passed along but plenty talk about how great those are. Usually the same people panicked about tariffs.
 
I'm Production Manager for an injection molder in MN. Yes, the steel tariffs have increased the cost of overseas manufactured tools (molds), but it is a ONE time cost. Has your company looked at the possible additional costs of moving production to China i.e. turn around time, quality issues, shipping issues etc. Every single customer that has pulled molds from us to go overseas has come back to us within a year or two. Turn around time from purchase order to dock date is two weeks or less with our company-China can't do that.

If there is a quality issue, we have an answer within one business day and replacement parts usually within two business-China can't do that. What about shipping? The trucking industry is struggling with a huge shortage of drivers. That is affecting shipping nation wide and causing huge delays in the East & West coast ports.

I have a simple request for all manufacturers -look at all costs before moving your production to China. It doesn't take a lot of production, or quality issues to burn up 45k. Our company does tool design work besides molding. We do have most of our tools made overseas but we use the same company in China for years and have a great relationship-we have been able to hold most tool costs with regards to tariffs by better tool design and lower design costs. Check around, MN is one of main hubs for injection molding and tooling in the US due to medical, automotive, and ag companies located in the Midwest. There a lot of great suppliers locally that may be able to help your employer hold their increased tool costs within an acceptable amount.

Dave
 
China and the rest of the world have used tariffs to great effect against the US. Now tariffs are bad when the US decides to not play the game.
 
Originally Posted by hatt
China and the rest of the world have used tariffs to great effect against the US. Now tariffs are bad when the US decides to not play the game.


They are for US Consumers.

When a country imposes tariffs, it is the citizens of that country who pay the price.

If we impose a tariff on Chinese steel, it's not the Chinese paying the tariff. It's a tax on the US consumer.

So yes, it hurts us.

If China wants to sell goods on the market for less than they cost to produce, we should buy them.

We in turn use our resources in some fashion where we have a competitive advantage.

Think about it this way. Let's say we have a lawyer who can bill clients at $300/hour. He can also type 80 words per minute. Is he better off typing his own documents or paying a couple of administrative assistants who can only type 50 words per minute $20/hour to type up documents for him?

Of course he should. If he's typing and spending time he could be billing a client for at $300/hour, he's throwing money away. Even though the assistants are slower typists, handing off the work gives him more time to bill out at $300/hour.

If someone can build widgets for 1/2 or less than we can, especially if they are subsiding the product by producing it for less than cost, then that frees up resources in our economy to produce higher cost goods and services. The cheap Chinese labor is like the lawyer paying the $20/hr assistant to type so we can go after bigger opportunities.
 
We haven't seen your win for us play out. The good paying jobs left and were replaced with low wages dilapidated buildings, and vacant lots.
 
Originally Posted by javacontour
hatt said:
If China wants to sell goods on the market for less than they cost to produce, we should buy them..


So just a theoretical question here...
Let's suppose Japan or perhaps now China sells semiconductors so low that it puts all of the US manufacturing out of business. (Theoretical question, remember)
And they do the same on steel, in other words, they sell it to us so low that all the U.S. steel mills close up.
Same way with tires, timber, everything...
And then the US has to go to war (for some reason, there could be several reasons)
You need manufacturing to products to win a war effort.
Where are you going to get your manufacturing base? Remember, just a theoretical question.
Click to expand...
 
People don't sell you stuff for cost or at a loss because they like you. It's a strategy move for a payoff later.
 
The answer is education. All products (and jobs) have a life cycle. Whether a job gets lost to technology, goes to another worker (across the street or halfway around the world) it will go away.
Unions have helped blue coat workers, but have gone too far in many cases. Unions seem to be yesterday's news anyway.
There are times when tariffs have helped, such as Harley-Davidson in the 80's.
Some tariff costs have been put on the deficit as the government gave soybean farmers subsidies up to $12B. Ouch...

There are no easy answers but education is key.
 
Last edited:
Originally Posted by javacontour
Speaking economically, not politically it seems the metric for jobs and tariffs is that for every job returned for a tariff, about 5 are lost in other industries due to retaliation.

Tariffs are a losing game.

The current estimates seem to follow along. About 30k steel and other metal workers have gone back to work, but close to 150k jobs are now on the bubble.

This relationship doesn't care about your political leanings, you cannot tinker with the market without unintended consequences, no matter how pure your motives might be.

Originally Posted by StevieC
In the mean time it sucks big time and there was no reason to create this nonsense in a global economy. mad There is no way to go back to protectionism!


Folks, as I already touched-on and hatt mentioned as well, these complaints are ludicrous because China is already playing the tariff game. China is a master at protectionism, at currency manipulation and lopsided trade. Their agreements for stealing IP, shameless copyright infringement...etc. The list is seemingly endless.

One cannot demand, from a position of sanity, that our role, be it US or Canada, is one that follows complete free-market principles whilst dealing with China, who in no way adheres to that model. The free market concept only works if all parties involved are playing by the same rules. When somebody is rigging the game or outright cheating, those abiding by those rules are going to lose.
 
Originally Posted by SLO_Town
Originally Posted by ZZman
In the chase for maximum profit companies looked to China. Walmart helped lead the charge. As corps become larger and swallow up more competition workers are no longer family but numbers on a spreadsheet. Automation has eliminated jobs as have other countries willing to work cheaper, pollute their countries, work in poor conditions and without benefits. Businesses and American consumers lead us here.

^^^This! ^^^This! ^^^This!

In their insatiable quest for inexpensive (cheap) goods, American businesses and citizens will put their own family, their good friends, and their friendly neighbors out of work - and have ZERO regret doing so. This issue could be corrected quickly and easily if American citizens showed the same nationalistic resolve as their Chinese citizen counterparts.

Scott



Having "nationalistic resolve" is 'racist' according to the left.....we all have to be good 'globalists'.....
 
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