Tariffs, Un-intended Consequences

Status
Not open for further replies.
Joined
May 9, 2014
Messages
2,237
Location
Minnesota
So I work for a non-automotive manufacturer (but we do sell some to the auto companies, in the form of instrumentation). We purchase about 6 injection mold tools a year for new product design. We used to purchase from the US but switched to China. US costs would run approximately $240k and take 20-24 weeks. China would run $220k and 12-14 weeks. It was mainly schedule that drove us to China. We would ship the tools to a US based injection molder.

So now with the tariffs in effect, we would pay a 20% penalty or about 45k if we imported the tools in from China. So we are now considering leaving the tools in China and having the parts molded over there. Then we only pay the 20% tariff on the cost of the parts as they are imported.

So in effect, unless the government closes this loophole, the tariffs are going to cause a net LOSS of US based jobs.
 
Originally Posted by philipp10

So in effect, unless the government closes this loophole, the tariffs are going to cause a net LOSS of US based jobs.


I don't have a dog in this fight, but it all depends on the product being imported/exported.
In before the lock.
 
Yep many keep trying to blame china but the US manufactures more than it ever has outside war times. Lose of jobs are primarily due to automation, not China. Trade wars will only make this worse.
 
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!
 
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!


You're right. The tariffs are there to get China back to the negotiating table. They're working slowly but as intended. Asking them nicely was not working.
 
Yep, tariffs working well, just ask soybean farmers.
56.gif
IBTL
 
Originally Posted by rshaw125
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!


You're right. The tariffs are there to get China back to the negotiating table. They're working slowly but as intended. Asking them nicely was not working.



Exactly.....A 'businessman' sees things differently than a 'politician'......and that can be a good thing....
 
For those of us that export, the strong USD. Is a business killer.
The China situation has went on far too long.
If anything I'd love to have stable markets instead of the rollercoaster I'm always on.
 
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!

Maybe you don't understand but there are tariffs RIGHT NOW and these tools fall under that umbrella.
 
Last edited:
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.
 
Originally Posted by Zee09
For those of us that export, the strong USD. Is a business killer.
The China situation has went on far too long.
If anything I'd love to have stable markets instead of the rollercoaster I'm always on.


It does not help the matter that China is constantly devaluing their currency.
 
I'm a bit less worried about the tariffs and more worried about the end of Wall street's "record" profits streak.

Companies that are still making money but not hitting those lofty goals are getting hammered stock wise as well. It is a set up for failure.

Tariffs are not going to be the major issue of job loss-Wall Street will lead that fall.......
 
We warehouse parts in the USA from china and sell to companies in mexico used in their operations. Those same parts on the complete product are not tariffed. Now those companies go direct to china, keep larger quantities and we are out of the picture. Shrink time for us.

Trump is NOT on my nice list
 
It's impossible for these things to be a win for 100% of companies. Someone is always on "the bubble" like the OP's business and will have to make changes and suffer some losses. It's easy to say for the good of all unless the new policy situation hits home. If a new policy benefits every company but one the media will find that one and play their story so long and hard it's easy to think a majority are suffering.
 
Business does well with predicted and planned approaches/changes. While some benefit by tariffs others suffer scrambling to fix their business model and adapting.

Protecting industries is a mistake because they get there by poor choices. Natural selection has its place in the business world.
 
Originally Posted by madRiver
Business does well with predicted and planned approaches/changes. While some benefit by tariffs others suffer scrambling to fix their business model and adapting.

Protecting industries is a mistake because they get there by poor choices. Natural selection has its place in the business world.


There's no natural selection taking place with China. It has been a constant state of government meddling/intervention to court business, devalue currency...etc.
 
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.
 
Last edited:
The low cost made in China products have cost this nation deary in many ways the TV news hasn't reported on. China has bought our politicians at a great discount over the years.
 
Originally Posted by CT8
China has bought our politicians at a great discount over the years.
People talk about how we are used to cheap Chinese products and will have trouble adjusting, but the real issue is the taste politicians have developed for Chinese money.
 
Originally Posted by OVERKILL
Originally Posted by madRiver
Business does well with predicted and planned approaches/changes. While some benefit by tariffs others suffer scrambling to fix their business model and adapting.

Protecting industries is a mistake because they get there by poor choices. Natural selection has its place in the business world.


There's no natural selection taking place with China. It has been a constant state of government meddling/intervention to court business, devalue currency...etc.


And noticed they installed long term leadership with little said in the Western press …
 
Status
Not open for further replies.
Back
Top