Trump approves tariffs on Chinese goods including $1 billion in bike products

[dbnm]

Effective Monday!

Can we talk about this without going crazy?

https://www.bicycleretailer.com/industry-news/2018/09/17/trump-administration-approves-tariffs#.W6B3Yv5KjOQ

[Clean39T]

https://cyclingtips.com/2018/09/cyclingtips-podcast-a-gravel-racers-pursuit-record-and-tariffs-on-bikes/

CyclingTips boys had a nice discussion on this a week or two back..

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[cachagua]

Only thing I currently want to buy that comes from there is a pair of H+Son rims. I assume, given the seller's location, that they're already in this country and thus I wouldn't pay any extra... but maybe this adds some time pressure.

But, maybe someone here can give me some International Business 101: when they say "Tariffs on $XYZ billion dollars of imports", what exactly is that supposed to tell us? If we all buy stuff like crazy and exceed that amount, is there no tariff charged on the overage? Are tariffs imposed on A, and B, and C items, and at the rate those items are being imported, that'd total XYZ billion in... what, a year? In other words there must be a more specific way the situation could be expressed.

Also: who pays, and who gets the money? If this is meant to damage China, then do they pay? And if all the revenue winds up in the US budget, then does it go toward disaster relief, or does it go toward defense?

[verticaldoug]

Only thing I currently want to buy that comes from there is a pair of H+Son rims. I assume, given the seller's location, that they're already in this country and thus I wouldn't pay any extra... but maybe this adds some time pressure.

But, maybe someone here can give me some International Business 101: when they say "Tariffs on $XYZ billion dollars of imports", what exactly is that supposed to tell us? If we all buy stuff like crazy and exceed that amount, is there no tariff charged on the overage? Are tariffs imposed on A, and B, and C items, and at the rate those items are being imported, that'd total XYZ billion in... what, a year? In other words there must be a more specific way the situation could be expressed.

Also: who pays, and who gets the money? If this is meant to damage China, then do they pay? And if all the revenue winds up in the US budget, then does it go toward disaster relief, or does it go toward defense?

1. The importer on record pays the tariff (tax) and just like any federal tax it goes directly to Treasury as general funds. So some can go defense, some can go FEMA, some can go to the 12b aid package to farmers.

2. The $200b number is just the current value of the targeted products. If we import 2x $200b of the products, the tariffs will be applied to the 2x amount. The tariff is versus a product not a notional amount.

3. The tariff tries to dissuade US consumers from buying Chinese and to buy American. In the end, it will probably just raise prices for US consumers. You can look back at Reagan trade wars with the Japanese automobile manufacturers in 1980's. The Japanese agreed to voluntary redunction of cars exported to the US in lieu of tariff. The US automobile manufacturers just raised prices and had record profits without really addressing any of the underlying issues plaguing the their industry.

I have no idea how this ends except the US consumer will pay more for manufactured goods. On the plus side, our food prices should come down.

[Jef58]

1. The importer on record pays the tariff (tax) and just like any federal tax it goes directly to Treasury as general funds. So some can go defense, some can go FEMA, some can go to the 12b aid package to farmers.

2. The $200b number is just the current value of the targeted products. If we import 2x $200b of the products, the tariffs will be applied to the 2x amount. The tariff is versus a product not a notional amount.

3. The tariff tries to dissuade US consumers from buying Chinese and to buy American. In the end, it will probably just raise prices for US consumers. You can look back at Reagan trade wars with the Japanese automobile manufacturers in 1980's. The Japanese agreed to voluntary redunction of cars exported to the US in lieu of tariff. The US automobile manufacturers just raised prices and had record profits without really addressing any of the underlying issues plaguing the their industry.

I have no idea how this ends except the US consumer will pay more for manufactured goods. On the plus side, our food prices should come down.

Good points... On point #3, it relies on the greed of corporate America which, in the past, shows no boundaries on how far that greed can go. I like the idea in the sense that it evens the playing field. Our products made here in the USA are harder to sell at 'regular' prices to other countries who put tariffs on us so their consumers tend to buy their own stuff over ours. The US stuff is almost luxury items...(like) Harley Davidson for instance. Trump has always started high to negotiate to a compromise so don't read everything as a negative, this is how he does business. We'll wait and see, but I agree there will be some pain in the wallet, unless corporate USA gets on the stick for long term prosperity goals for this country. We can still be a global economy even with US interests first.

[Cicli]

Good points... On point #3, it relies on the greed of corporate America which, in the past, shows no boundaries on how far that greed can go. I like the idea in the sense that it evens the playing field. Our products made here in the USA are harder to sell at 'regular' prices to other countries who put tariffs on us so their consumers tend to buy their own stuff over ours. The US stuff is almost luxury items...(like) Harley Davidson for instance. Trump has always started high to negotiate to a compromise so don't read everything as a negative, this is how he does business. We'll wait and see, but I agree there will be some pain in the wallet, unless corporate USA gets on the stick for long term prosperity goals for this country. We can still be a global economy even with US interests first.

Agreed, the US will do fine. China needs Walmart.

[572cv]

One small point.... it isn’t just corporate greed that comes into play in the short term thinking that goes on regarding reinvestment in new equipment and such. The structure of many of our corporations encourages them to fight for the quarterly return to investors. The mark of success is quarter on quarter gains.

The development of new corporate structures that encourage positive benefits for society, whose structure enables a stable environment for the enterprise, while allowing competition to carry on vigorously, could be a big deal. We need both outcomes in the country to be successful over the long term.

[oldpotatoe]

Good points... On point #3, it relies on the greed of corporate America which, in the past, shows no boundaries on how far that greed can go. I like the idea in the sense that it evens the playing field. Our products made here in the USA are harder to sell at 'regular' prices to other countries who put tariffs on us so their consumers tend to buy their own stuff over ours. The US stuff is almost luxury items...(like) Harley Davidson for instance. Trump has always started high to negotiate to a compromise so don't read everything as a negative, this is how he does business. We'll wait and see, but I agree there will be some pain in the wallet, unless corporate USA gets on the stick for long term prosperity goals for this country. We can still be a global economy even with US interests first.

Well, sorta..he talks about general ideas, then his 'crew' tries to do the grunt work,ideas, programs and plans..More often than not he throws wrenches in those works on twitter...He needs some BIZ 101 to realize negative trade balance isn't 'failing' or losing anymore than a + one is 'winning'.

There is wallet pain now..In an era of flat wage growth...I don't disagree with the general idea...intellectual property, etc., but the 'process' being followed is clumsy, often inept, confused.

[fignon's barber]

3. The tariff tries to dissuade US consumers from buying Chinese and to buy American. In the end, it will probably just raise prices for US consumers. You can look back at Reagan trade wars with the Japanese automobile manufacturers in 1980's. The Japanese agreed to voluntary redunction of cars exported to the US in lieu of tariff. The US automobile manufacturers just raised prices and had record profits without really addressing any of the underlying issues plaguing the their industry.

I have no idea how this ends except the US consumer will pay more for manufactured goods. On the plus side, our food prices should come down.


Agree. There is also another aspect that really hasn't been addressed: "overconsumption" of the US society. People buy more stuff because its cheap, not because they need it. Joe SixPack goes to Walmart and buys 3 MIC tee shirts because he has $20 in his pocket. If he had to buy US made tees for $10/ea, he would only buy two. After awhile, this would become normal behavior.

[verticaldoug]

Agreed, the US will do fine. China needs Walmart.

Actually this is not how it works. It is less Walmart needs China, but China needs Apple and Apple needs China.

1/2 of the trade deficit with China is computers and electronics. It is something like 167b in deficit.

https://www.marketwatch.com/story/heres-all-the-stuff-the-us-imports-from-china-thats-causing-a-huge-trade-deficit-2018-03-23

As you can see US really only exports ag and transportation (Boeing mostly).

If you really want to replace China, you need to replace the Pearl River Delta manufacturing hub and build the equivalent in the US. Foreign investment has taken 20+ years to make the Pearl River Delta what it is, to replicate that is going to take time.

The idea that China sells cheap products through walmart is outdated. It is your Iphone, the Intel chips in your computer, the smart devices in your home, etc.

[Aaron O]

I don't think it's possible for me to discuss this without blowing my top, but...short version...

Tariffs don't work.

China has been in a recession for 7-8 years after a lot of artificial and unsustainable expansion, so doing this now makes very little sense to me.

This is being coupled with aggressive stimulus policy during a period of 0% economic unemployment, so those price hikes are going to be coupled with inflation.

Will likely not respond further, other than to say this is asinine.

[echappist]

For the sharper minded folks here, whst’d going to happen to interest rates and treasury yields?

Say the whatever amount of treasuries held by China gets off-loaded, what would others demand in terms of bonds to be issued?

[oldpotatoe]

For the sharper minded folks here, whst’d going to happen to interest rates and treasury yields?

Say the whatever amount of treasuries held by China gets off-loaded, what would others demand in terms of bonds to be issued?

Well, you can guarantee China will not just roll over and do what trump and his crew says. Ross said yesterday china is 'out of bullets'..hardly. How about the above mentioned Treasuries or perhaps just eliminating the materials that go into an IPhone..

I'm gonna watch this too and not say something that will get me a PM..the whole political DC clown car these days just makes me angry.

[verticaldoug]

I don't think it's possible for me to discuss this without blowing my top, but...short version...

Tariffs don't work.

China has been in a recession for 7-8 years after a lot of artificial and unsustainable expansion, so doing this now makes very little sense to me.

This is being coupled with aggressive stimulus policy during a period of 0% economic unemployment, so those price hikes are going to be coupled with inflation.

Will likely not respond further, other than to say this is asinine.

China hasn't had a recession in 25 yrs maybe longer. The stock market and some industries (real estate) have trended lower, but growth is still a nice healthy. YOY GDP growth has trended lower to 6.7% recently, down from 14-15 pre-2008, but this hardly equates to a recession. Even in 2008/2009 growth was 6%+.

When China has a recession is when it gets really interesting politically.

[Aaron O]

China hasn't had a recession in 25 yrs maybe longer. The stock market and some industries (real estate) have trended lower, but growth is still a nice healthy. YOY GDP growth has trended lower to 6.7% recently, down from 14-15 pre-2008, but this hardly equates to a recession. Even in 2008/2009 growth was 6%+.

When China has a recession is when it gets really interesting politically.

https://www.forbes.com/sites/yuwahedrickwong/2018/08/23/the-reality-of-chinas-economic-slowdown/#6ba801d4d86d

I'm keeping terminology simple...but the underlying issue is that this is not the time.

[verticaldoug]

For the sharper minded folks here, whst’d going to happen to interest rates and treasury yields?

Say the whatever amount of treasuries held by China gets off-loaded, what would others demand in terms of bonds to be issued?

This is again dated news. Pre-2011, the Chinese holdings of TSY really grew. Since then, it kind of hovers in a range from 1.05tr to 1.3tr dollars. China imports a lot more now than pre-2011, so the need to recycle export profits into TSY just isn't there.

China can dump their current holdings, but that doesn't really accomplish anything for them. The value of the USD will decline, making US products more competitive, the value of the YUAN will rise making their products less competitive. You probably see an explosion in commodity prices since these are priced in dollars.

Where would China recycle the yuan? EUROS? then the same happens in reverse for EUROPE. EURO Strengthens, european products get less competitive.

The problem with all this is markets and financial products have linkages. SO we are all prisoners of the current system.

I think the rubber will hit the road in 12-18 mo time when Steel Industry executives award themselves windfall compensation packages from price gains caused by tariffs, and the rank/file union workers realized they only have the 2.5% wage gain. This kind of corporate behavior has been going on for 50+ years and there is no reason for it to stop now.

[FlashUNC]

Tariffs don't work.

[doomridesout]

If half of the deficit Trump is trying to "fix" is electronics, we're screwed. Americans don't realize the degree to which owning a new iPhone every year relies on externalizing the huge environmental costs to China. We don't want an iPhone plant in Michigan (although who knows, given our unbelievable tolerance toward the water crisis there).

Actually, this point aside, we're screwed. The whole project is ahistorical kook economics.

[echappist]

If half of the deficit Trump is trying to "fix" is electronics, we're screwed. Americans don't realize the degree to which owning a new iPhone every year relies on externalizing the huge environmental costs to China. We don't want an iPhone plant in Michigan (although who knows, given our unbelievable tolerance toward the water crisis there).

Actually, this point aside, we're screwed. The whole project is ahistorical kook economics.

More like Sub-Saharan Africa

those rare earth metals don't make themselves easy to find

[redir]

More like Sub-Saharan Africa

those rare earth metals don't make themselves easy to find

There are plenty in Afghanistan ..... Hmmmmmmmm

[wc1934]

China hasn't had a recession in 25 yrs maybe longer. The stock market and some industries (real estate) have trended lower, but growth is still a nice healthy. YOY GDP growth has trended lower to 6.7% recently, down from 14-15 pre-2008, but this hardly equates to a recession. Even in 2008/2009 growth was 6%+.

When China has a recession is when it gets really interesting politically.

And our stock market?

[jet sanchez]

Predictably, China has responded with tariffs on American imports. Trump has already bailed out the heartland with $12 billion in subsidies, don't forget.

Trump vows 'great and fast' economic retaliation on China if it goes after American farmers

https://www.cnbc.com/2018/09/18/trump-vows-great-and-fast-economic-retaliation-on-china.html?__source=twitter%7Cmain

Late Monday the U.S. officially announced tariffs on another $200 billion of Chinese imports in an escalating trade dispute with China.

China said Tuesday it would slap duties on another $60 billion of American imports in response.

In a pair of tweets Tuesday, President Donald Trump said China was trying to influence the U.S. election by attacking farmers, ranchers and industrial workers and that his retaliation will be "great and fast."

[Clean39T]

"Bailed out the heartland" simply means doubling-down on corporate subsidies for the Big Ag companies who are destroying the environment and whatever is left of small farmers.

This is beyond stupid, all of it. Pointless political theater aimed at stirring up the red-hat crowd just in time for the mid-terms. Why do anything that would actually bring positive change?

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[veloduffer]

The idea of “fair trade” is a bit of a fallacy. The trade environment is much more complicated than tariffs when you consider subsidies, which supports inefficient production (e.g. US sourced ethanol, sugar, cotton), and tax credits (e.g. farm equipment, plant/office location).

All countries engage in this behavior, mostly to favor groups with considerable lobbying/voting power.

Since the US doesn’t produce many goods, most of the tariffs are against agriculture products and planes. A trade war with China really hurts the Ag sector, as it can take years to develop the relationship and there are plenty of other sources like Brazil and Europe. In the end of a trade war, since there isn’t a like for like tariffs (ie US made televisions against China-made televisions), a lot of sectors get hurt and GDP falls for all countries involved.

China has one key advantage over other countries is scale in manufacturing. For high volume products, it can build a factory, hire 5,000 workers and be fully operational in a month. That kind of scale can’t be replicated elsewhere in the world. Of course, that model has long term susceptibility to automation from robotics and additive manufacturing. China recognizes that and is pushing to be a leader in technology. Some recent reports are that China has about 300 million engineers; that’s equivalent to the entire US looking for new ideas/processes.

A prime criticism of the current trade war is that it works against the tax cut policy that was supposed to spur GDP. The US needs to offset the lost tax revenues (from lower rates) with high growth. Since the 50s, tax cuts have never paid for themselves.

This contributes to the fiscal deficit, which will increase by $1 trillion or more each year and add to the federal debt, which is about 100% of GDP ($21 trillion) if you include the IOUs stuffed into the social security and Medicare funds.

With Medicare (hospital insurance) trust funds running out in 2026 and social security (OASDI) in 2033 (without accounting for a potential recession), the budget and debt will get even worse. Voters will not take a 20% or more reduction in both social security and Medicare benefits.

And a recession is looming (‘Winter is coming”) with the corporate debt bubble that’s expanding (mostly funded from non-banks and therefore outside of regulation). We’ve got 2 out of 3 conditions for a recession: Fed tightening, credit conditions weakening and waiting for the economy to slow down.

Implementing a tax cut at this part of the cycle is removing the govt’s ability to stimulate the economy when the recession hits. And with interest rates relatively low, the Fed doesn’t have much room for monetary stimulus (cutting rates). We’re forecasting a nasty recession that could be deep and long. The last corporate-led recession was in 1989-90 which then triggered a commercial real estate crisis. This last recession was concentrated in banking/financial services and housing); nevertheless, corporate defaults reached 14% and could be twice as high next recession.

A trade war could accelerate the timing of the next recession.




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[bicycletricycle]

I don't think this policy will work out well. The consumer ends up paying the increased costs from tariffs. I guess it could make the Chinese cave on some stuff we want but I think that they have a higher tolerance for pain than we do.

[Mzilliox]

The idea of “fair trade” is a bit of a fallacy. The trade environment is much more complicated than tariffs when you consider subsidies, which supports inefficient production (e.g. US sourced ethanol, sugar, cotton), and tax credits (e.g. farm equipment, plant/office location).

All countries engage in this behavior, mostly to favor groups with considerable lobbying/voting power.

Since the US doesn’t produce many goods, most of the tariffs are against agriculture products and planes. A trade war with China really hurts the Ag sector, as it can take years to develop the relationship and there are plenty of other sources like Brazil and Europe. In the end of a trade war, since there isn’t a like for like tariffs (ie US made televisions against China-made televisions), a lot of sectors get hurt and GDP falls for all countries involved.

China has one key advantage over other countries is scale in manufacturing. For high volume products, it can build a factory, hire 5,000 workers and be fully operational in a month. That kind of scale can’t be replicated elsewhere in the world. Of course, that model has long term susceptibility to automation from robotics and additive manufacturing. China recognizes that and is pushing to be a leader in technology. Some recent reports are that China has about 300 million engineers; that’s equivalent to the entire US looking for new ideas/processes.

A prime criticism of the current trade war is that it works against the tax cut policy that was supposed to spur GDP. The US needs to offset the lost tax revenues (from lower rates) with high growth. Since the 50s, tax cuts have never paid for themselves.

This contributes to the fiscal deficit, which will increase by $1 trillion or more each year and add to the federal debt, which is about 100% of GDP ($21 trillion) if you include the IOUs stuffed into the social security and Medicare funds.

With Medicare (hospital insurance) trust funds running out in 2026 and social security (OASDI) in 2033 (without accounting for a potential recession), the budget and debt will get even worse. Voters will not take a 20% or more reduction in both social security and Medicare benefits.

And a recession is looming (‘Winter is coming”) with the corporate debt bubble that’s expanding (mostly funded from non-banks and therefore outside of regulation). We’ve got 2 out of 3 conditions for a recession: Fed tightening, credit conditions weakening and waiting for the economy to slow down.

Implementing a tax cut at this part of the cycle is removing the govt’s ability to stimulate the economy when the recession hits. And with interest rates relatively low, the Fed doesn’t have much room for monetary stimulus (cutting rates). We’re forecasting a nasty recession that could be deep and long. The last corporate-led recession was in 1989-90 which then triggered a commercial real estate crisis. This last recession was concentrated in banking/financial services and housing); nevertheless, corporate defaults reached 14% and could be twice as high next recession.

A trade war could accelerate the timing of the next recession.



thanks for this, i could not have written it so well. but this has been my understanding so far of the situation, or at least very similar.

I find it fascinating the government is "playing all its cards now" so to speak. why make some of the moves during an economy showing strong job growth, and good GDP numbers. why claim is the best economy ever, then make these additional moves normal reserved for corrections? I am also fearful of an economy so heavily reliant on cheap debt, with interest rates rising, and inflation soon to follow.

why play these games when the focus could be on policy that helps Americans get things they need? things like real wage growth surpassing inflation, health care, education, you know, things we actually consume that could make daily life better for all.

[Big Dan]

Too much common sense in this thread.
Someone say something crazy.

[rain dogs]

Oh, Tariffs DO work.... but they almost never, if ever, accomplish what they intend/claim to and often do the opposite.

But don't kid yourself into thinking they don't influence the economics of said sector.

[93KgBike]

OK; if we're going to trade with communists, it should be the Cubans, not the Chinese. Let's just embargo them, we have more levers of controls in the Americas than they can ever hope to, especially Brazil. That just leaves Africa to worry about, because Afghanistan, India, and Pakistan are not any kind of tipping points.

The Japanese thought we couldn't build a war machine after they cornered the natural rubber market, and we know how that worked out for them.

This. Is. America!

Crazy enough?

[ergott]

I know how to get rid of all these tariffs.

Call it socialism! (which it is)

[benb]

Anyone got any info on how this affects the bicycle industry since it was mentioned in the title?

My impression is it's WAY easier for Trek or someone to kickstart a little more production in the US than it would be for Apple, or even Specialized.

The barrier to entry for bike production is so much lower.. maybe it's hard to get mass supplies of Carbon fiber, etc.. in the US but it's not like electronics where it will require billions of dollars of startup costs to build a factory here.

I'd guess this could benefit someone like Trek that still has some US production vs someone like Specialized that has never really had any US production?

I forget what the specs are but say they are making 7 series Madones here.. there is probably plenty of profit margin to keep making 5/6 series bikes in Taiwan but how hard would it actually be to start making some of those 5/6 bike alongside the 7 bikes.

Or how hard would it be to start making the upper series Domanes/Emondas in the US as opposed to Madones? (AFAIK they only make Madones in the US?)

There are electronics companies like Apple that actually do have the cash reserves/finances to bring manufacturing back if the trade environment favors it... but is it even worth spending those billions if Trump changes his mind or he's out of office in a couple years and whoever gets in next immediately reverses all this stuff and makes US manufacturing seriously disadvantaged again? Even if Trump was guaranteed another 4 years it seems like any giant electronics/computer investment to bring anything back is incredibly risky.

No amount of tariff can ever produce the workforce that might be required too, and we have very low unemployment right now..

[verticaldoug]

https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List_09.17.18.pdf

here is 194 pages of the tariff
this is what it looks like in reality.

number 3, edible ofal of bovine animal, fresh or chilled.


what about the frozen kind?

The first 25 pages makes me think the prices at Chinese Restaurants is going up.

[jh_on_the_cape]

Politics. Do it before November. Play your cards now because someone else might be holding them soon.
A real functional policy would take time and be hard for people to understand.
I think we should switch to a benevolent dictatorship run by the Paceline forum illuminati. REVOLUTION!

thanks for this, i could not have written it so well. but this has been my understanding so far of the situation, or at least very similar.

I find it fascinating the government is "playing all its cards now" so to speak. why make some of the moves during an economy showing strong job growth, and good GDP numbers. why claim is the best economy ever, then make these additional moves normal reserved for corrections? I am also fearful of an economy so heavily reliant on cheap debt, with interest rates rising, and inflation soon to follow.

why play these games when the focus could be on policy that helps Americans get things they need? things like real wage growth surpassing inflation, health care, education, you know, things we actually consume that could make daily life better for all.

[fiamme red]

https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List_09.17.18.pdf

here is 194 pages of the tariff
this is what it looks like in reality.This is quite detailed!

"3926.90.96 Casing for bicycle derailleur cable;and casing for cable or inner wire for caliper and cantilever bake (sic), whether or not cut length; of plastic"

[93KgBike]

"6815.99.40 Articles of stone or of other mineral substances (including carbon fibers & articles thereof)" :eek: :eek: :eek:

Do these tariffs include Taiwan?

[fiamme red]

Do these tariffs include Taiwan?No.

[delish]

I was combing through the list for other non-bicycle items this morning.

Here are some bicycle HTS codes I found. expect to pay a lot more for these things in the future:

3926.90.96 bike cables and housing
4011.50.00 New pneumatic tires, of rubber, of a kind used on bicycles
4012.90...Bicycle rim strips
4013.20.00 Inner tubes of rubber, of a kind used on bicycles
8512.90.40 Parts of electrical lighting equipment of a kind used on bicycles

8712.00... basically all bicycles...

8714.91... Parts & accessories for bicycles, frames, forks, and parts of frames

9029.20.20 Bicycle speedometers

8714.92.... Pts. & access. for bicycles: wheel rims, wheel spokes, hubs, brakes, saddles, pedals and parts, cranks/cranksets/gears

[gdw]

"Anyone got any info on how this affects the bicycle industry since it was mentioned in the title?"

Here's an article covering how it might impact the outdoor and cycling industries.
https://www.outsideonline.com/2340861/trump-don't-raise-gear-prices
There are other articles with more info that you can access at the bottom of the page.

[fiamme red]

It's interesting to me that helmets are not in the list. :confused:

I suppose they're included in "3926.20.90 -- Articles of apparel & clothing accessories, of plastic, nesoi"?

[Mark McM]

Anyone got any info on how this affects the bicycle industry since it was mentioned in the title?

My impression is it's WAY easier for Trek or someone to kickstart a little more production in the US than it would be for Apple, or even Specialized.

The barrier to entry for bike production is so much lower.. maybe it's hard to get mass supplies of Carbon fiber, etc.. in the US but it's not like electronics where it will require billions of dollars of startup costs to build a factory here.

I'd guess this could benefit someone like Trek that still has some US production vs someone like Specialized that has never really had any US production?

While Trek might have held off moving production overseas longer than other large US bike manufacturers, currently 99% of Trek's production is overseas. Trek will be affected as much by bicycle tariffs as any other large US bike manufacturers, and I don't see them ramping up US production any faster than anyone else.

[delish]

It's interesting to me that helmets are not in the list. :confused:

I suppose they're included in "3926.20.90 -- Articles of apparel & clothing accessories, of plastic, nesoi"?

Bike helmets are classified under 6506.10... and therefore not on the new tariff list.

I assume that helmets were not included because it would have been hard to claim that the tariffs were put in place to "help to protect Americans" since, quite literally, the tariffs would have made it more expensive to protect our heads.

[ptourkin]

Just saying, this is the last place a former international trade attorney expected to get PTSD from all the HTSUS talk. Thanks guys :banana:

[m4rk540]

China has one key advantage over other countries is scale in manufacturing. For high volume products, it can build a factory, hire 5,000 workers and be fully operational in a month. That kind of scale can’t be replicated elsewhere in the world. Of course, that model has long term susceptibility to automation from robotics and additive manufacturing. China recognizes that and is pushing to be a leader in technology. Some recent reports are that China has about 300 million engineers; that’s equivalent to the entire US looking for new ideas/processes.



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300 million or 30 million (3 million)? The total labor force is estimated at under 800 million.

[cmg]

the only ones that benefit are the governments collecting the tariffs. does the prez not think that this will effect the costs of those items that rely on Chinese made electronics like cars, motorcycles, tvs...everything at Walmart, Costco, Kmart... His donors are not going to be happy.

[BikeNY]

While Trek might have held off moving production overseas longer than other large US bike manufacturers, currently 99% of Trek's production is overseas. Trek will be affected as much by bicycle tariffs as any other large US bike manufacturers, and I don't see them ramping up US production any faster than anyone else.

Also, there are already new tariffs in place on the materials they would use to make new frames, like aluminum and steel. Unless they buy from other sources at even higher costs.

[DRZRM]

OK, a question for those folks who understand this stuff better than I. Are goods that were made in China but that are already in a country from whom we limit taxes/tariffs on bike gear (like the UK) immediately subject to the increased taxes? Like if I want a crankset from a British bike company, is it about to increase in price by 25%? If it has not yet happened, should I be stocking up now?

[gasman]

I wonder if China will be able to move any more manufacturing to the US to avoid tariffs. They already have a couple large auto tire plants in the US. Honda and Toyota started moving production to the US when the US put tariffs on their autos in the early 80's. Our biggest import from China is electronics and I don't see them opening production here.
It's going to be interesting. Those in the know seem to say tariffs don't work but I no nothing about that.

[jmeloy]

To all of you for a very civil discussion on a charged topic. This place rocks.

[tuscanyswe]

Apart from the actual math of tariffs and potential future trade deals with china or mexico canada or even eu, of which i know very little.. There is also good will at stake.

And imo the general feeling over here for example is that USA have been spending it plenty on all sort of things lately. To me it would seem like things like this would also have an economic price tag as well (tho it may be a lot harder to calculate)?

Surely trump himself would remember anyone who forced him into a "bad" deal and try to get even if the chance to do so ever materialized. For example.

[tigoat]

US consumers have been taking advantage of Chinese goods for years and now he wants to change that, asking us to pay more with US made goods. I am all for patriotic thinking but US made goods are expensive and I am not sure the working class are willing to pay more. Also, very few countries outside US can afford US made goods, so I am not sure if we can thrive without selling goods internationally. Don't know how this gonna work out but I will not be happy if I have to pay a lot more for daily stuff.

[Mark McM]

OK, a question for those folks who understand this stuff better than I. Are goods that were made in China but that are already in a country from whom we limit taxes/tariffs on bike gear (like the UK) immediately subject to the increased taxes? Like if I want a crankset from a British bike company, is it about to increase in price by 25%? If it has not yet happened, should I be stocking up now?

Tariffs are applied when goods enter (or in some cases, exit) a country, so they would not apply to goods already in a country. However, when sellers price their goods for sale, they have to consider all costs of doing business, which includes the cost of importing new goods to replace those sold. So when goods are tariffed, sellers often increase the price of goods already in country, to account for the increase in price to continue to import those goods in the future.

[joosttx]

This is a great way to curb inflation by slowing down a hot economy stoked by a new tax policy ... wait a minute ... what am I missing ...



well it’s an excellent way to slow pipeline development in all those national monuments that were recently opened for mineral extraction.

I am buying utilities .

I feel I am looking at the equivalent of a economic Francis Bacon painting...

[veloduffer]

This is a great way to curb inflation by slowing down a hot economy stoked by a new tax policy ... wait a minute ... what am I missing ...



The economy can’t afford to slowdown. There is so much leverage/debt in the market, and at leverage multiples that are higher than at the Financial Crisis. Growth covers all sins and when it slows down, companies will either have to repay their loans (which are about 5x or more of cash flow) or refinance when their loans come due but at a lower valuation multiples (so lenders will have to take a loss).

This will spark the recession, which will be corporate-led. We need the economy to continue so firms have enough time to reduce their debt (de-lever).





Sent from my iPad using Tapatalk

[joosttx]

The economy can’t afford to slowdown. There is so much leverage/debt in the market, and at leverage multiples that are higher than at the Financial Crisis. Growth covers all sins and when it slows down, companies will either have to repay their loans (which are about 5x or more of cash flow) or refinance when their loans come due but at a lower valuation multiples (so lenders will have to take a loss).

This will spark the recession, which will be corporate-led. We need the economy to continue so firms have enough time to reduce their debt (de-lever).





Sent from my iPad using Tapatalk

<like>

[HenryA]

Not everyone in the bike biz is complaining:

https://www.bicycleretailer.com/industry-news/2018/09/07/utah-rack-maker-smiling-about-proposed-tariffs-his-competition#.W6GARxpOnmo

[gasman]

Duh-hhhhh

No at all a helpful or needed comment.

[saab2000]

Heard an interesting piece on this tonight on Marketplace on NPR. Talks about the dumping that’s been going on for years and the mislabeling of products, etc. I don’t give this president much leeway but he’s been talking China and some of their practices since long before this run for the office of POTUS.

It’ll be interesting to see how this plays out.

[ultraman6970]

All has to do with the structure of the costs, if your costs are based in china, sure the manufacturer will suffer.

Did not know this Yazdian person racks, did not know Saris was made in the US... In other countries like Brazil if you want to take your production to other country the government will ask you why and sure your stuff will be taxed for being produced outside eventhought the company is brazilian. That's how they keep the bussines inside... bad thing? they keep people working, dollars dont end up in another place but used inside. People work, they have money to buy stuff...

In south america china imports killed the local bike manufacturers 30 years ago, you pretty much can't get a custom bike there anymore because obviously is cheaper go to the store to get a chinese frame, it makes sense but that killed at least in my country 6 big brands, even bianchi had their own plant and when the the boom of chinese imports started those plants became assembly lines, now is not even that because all those factories bring the bikes in boxes from china, and they have maybe 2 or 5 guys that gets them off the boxes only. Cruel reality.

Still remember when you were getting a made in USA frame, you were getting quality and parts built to last... now the issue IMO is that the chinese model in american business has been around way too long to be able to reverse/revert (sp) it from one day to another... the issue here if you look at it IMO is that another country sold themselves pretty good because they promessed a lot of profits, it is fair if you are the owner of x or y company, but if you look at it the gvmt did not put the brake, or at least control the problems this Panacea that is china was going to generate in the american manufacturing industry in general. That's what Brazil did... honestly the brazilian stuff is not super dupper but at the time to protect their internal production the whole gvmt pulls the same way.

As i said before, probably it is too late to try to reverse the situation, the tariffs is a way but as i thought was going to get a lot frowns all over the place, they should have put regulations when money started getting off the US and arriving to china, maybe is too late now. The other issue is that we arent even talking about manufacturing, we have services too that went overseas because the conditions were the right ones, well in other words, there was no way legislations in place to protect those peoples jobs before the companies flew somewhere else... again, I cant blame what the owners of those companies did, it makes perfect sense... the legislators were the ones that failed IMO.

BTW anybody seeing ozark?

[joosttx]

No at all a helpful or needed comment.

Fix it for ya. Sorry about the sarcasm. My bad.

[happycampyer]

<snip>

This will spark the recession, which will be corporate-led. We need the economy to continue so firms have enough time to reduce their debt (de-lever).





Sent from my iPad using TapatalkAs you are probably well aware, the market has incentivized the exact opposite—historically low interest rates have encouraged companies to borrow more than they would have otherwise, and in many cases the companies have used the borrowed money to increase dividends and buy back stock, further increasing leverage...

[Gummee]

Not everyone in the bike biz is complaining:

https://www.bicycleretailer.com/industry-news/2018/09/07/utah-rack-maker-smiling-about-proposed-tariffs-his-competition#.W6GARxpOnmo

however many pages of doom and gloom and not one 'hey there's an opportunity to employ more Americans!'

...or even a 'hey! Let's open a Maquiladora on the MEX border to take advantage of the cheaper labor and still call it 'made in the USA.'

I get it, but like in everything else, there is an opportunity. It may make sense to get the steel mills back up and working. Get the textile mills back up and working. etc etc etc

M

[Llewellyn]

however many pages of doom and gloom and not one 'hey there's an opportunity to employ more Americans!'

...or even a 'hey! Let's open a Maquiladora on the MEX border to take advantage of the cheaper labor and still call it 'made in the USA.'

I get it, but like in everything else, there is an opportunity. It may make sense to get the steel mills back up and working. Get the textile mills back up and working. etc etc etc

M

Unfortunately it's not as easy as simply walking in, switching the lights on and start producing steel, textiles etc. If only it was.

[nickl]

Originally Posted by echappist View Post
More like Sub-Saharan Africa

those rare earth metals don't make themselves easy to find

There are plenty in Afghanistan ..... Hmmmmmmmm

Starting any major venture in Afghanistan is a losing proposition. Poor infrastructure, unskilled labor, nonexistent industrial support base and other minor issues like an ongoing war with the distinct possibility of the Taliban retaking parts of the country it doesn't already control.

[sailorboy]

There are plenty in Afghanistan ..... Hmmmmmmmm

Cool. I can't wait to see what kind of camouflage uniforms the Apple, Microsoft and Samsung soldiers will be wearing while guarding all those mining sites.

[93KgBike]

The economy can’t afford to slowdown. There is so much leverage/debt in the market, and at leverage multiples that are higher than at the Financial Crisis. ... This will spark the recession, which will be corporate-led. We need the economy to continue so firms have enough time to reduce their debt (de-lever).


You've just described a Ponzi scheme.

By recession, you mean collapse. By de-lever, you mean taxpayer bailout.

And I'm not disagreeing with anything you wrote, except debt covers all sins, not growth. The problems arise when the margin calls come in, and no-one will buy your debt.

It's deja vu all over again.

[pbarry]

The market has rebounded since winter, but it's fickle and nervous after the beginning of summer. jmo.

[93svt96]

however many pages of doom and gloom and not one 'hey there's an opportunity to employ more Americans!'

...or even a 'hey! Let's open a Maquiladora on the MEX border to take advantage of the cheaper labor and still call it 'made in the USA.'

I get it, but like in everything else, there is an opportunity. It may make sense to get the steel mills back up and working. Get the textile mills back up and working. etc etc etc

M

We need to bring back more manufacturing to the USA. I won't buy anything from a foreign country if I have a choice. I am not buying a Toyota because it's built in Texas the big money ( profits) go over seas. My Ford's run just fine and so do my Maytag appliances. Sure they might be assembled from foriegn parts in a foreign country but I believe supporting American companies keeps more money here. Maybe it's a global economy but I would rather support America's economy.

[TonyG]

however many pages of doom and gloom and not one 'hey there's an opportunity to employ more Americans!'

...or even a 'hey! Let's open a Maquiladora on the MEX border to take advantage of the cheaper labor and still call it 'made in the USA.'

I get it, but like in everything else, there is an opportunity. It may make sense to get the steel mills back up and working. Get the textile mills back up and working. etc etc etc

M
https://www.bloomberg.com/news/articles/2017-06-21/how-just-14-people-make-500-000-tons-of-steel-a-year-in-austria

How Just 14 People Make 500,000 Tons of Steel a Year in Austria
The industry is losing its role as a big job creator.

Thousands or tens of thousands of steel jobs is like Mexico paying for "the wall".

.

[93svt96]

https://www.bloomberg.com/news/articles/2017-06-21/how-just-14-people-make-500-000-tons-of-steel-a-year-in-austria

How Just 14 People Make 500,000 Tons of Steel a Year in Austria
The industry is losing its role as a big job creator.

Thousands or tens of thousands of steel jobs is like Mexico paying for "the wall".

.

Get the textile Mills working etc etc. Not just steel

[TonyG]

Get the textile Mills working etc etc. Not just steel

Well "How many workers to produce steel" is the only google search I did so far :-)

[93svt96]

Well "How many workers to produce steel" is the only google search I did so far :-)

I'll take 14 more jobs

[cmg]

getting manufacturing back in the usa isn't go to happen over night, not even in this prez's term. it's about revenue generation. population pays, govt collects, jobs aren't coming back. corporations loose profits, balk and tell prez to ease off. maybe in a decade.......

[93svt96]

Iam sure it equates to much more than 14 people to keep that running

[93svt96]

Not overnight is fine , I don't expect that.

[veloduffer]

You've just described a Ponzi scheme.

By recession, you mean collapse. By de-lever, you mean taxpayer bailout.

And I'm not disagreeing with anything you wrote, except debt covers all sins, not growth. The problems arise when the margin calls come in, and no-one will buy your debt.

It's deja vu all over again.

Except who is the gov't going to bail out? These loans are being funded by non-banks (institutional investors like funds, ETFs, insurance companies, private capital) that are all outside regulation -- shadow banking. Unless the Fed lets bank reduce their capital requirements so banks can lend again....

You're right about the margin call. The leveraged loan market is now larger than the high yield bond market and since it is a shorter-term market (3-5 yrs) than bonds, who is going to refinance these loans in 2020-2022. The combined speculative grade/junk market is about $2.6 trillion (bonds & loans) and there's at least $1.5 trillion of debt coming due in the next three years. And to make things worse, borrower's capital structures became loan only with no subordinated, unsecured debt underneath. So all the firm's assets are pledged and new capital (DIP financing) would be reluctant to refinance or lend without security. There could be a lot more bankruptcies and liquidations than the last 3 cycles, which would lead to much higher unemployment (higher than the 10% at the peak in 2009).

[hokoman]

In other countries like Brazil if you want to take your production to other country the government will ask you why and sure your stuff will be taxed for being produced outside eventhought the company is brazilian. That's how they keep the bussines inside... bad thing? they keep people working, dollars dont end up in another place but used inside. People work, they have money to buy stuff...


I lived in Brazil for 3 years and this is a bad example of how taxed goods improve the economy. Everything is taxed at a ridiculous level, but that is also why there is such a economic disparity in the country - the people that can afford to buy imported goods, can easily afford to fly to the US, buy a Rolex, have a nice vacation with the family and still get home breaking even for that one Submariner price difference (even with how weak the Real is doing). The other hand is, the people in the sector 'making' these 'Made in Brazil' goods are living under the poverty level in the favelas - I think the US equivalent for a month of work is like $400 US dollars. Yes, they have jobs, but they definitely do not have money to buy these taxed goods. If they actually lowered taxes on items - more people would have access to them.

If you think Brazil is a great example, wait until everything goes up in price by xx% in America, boards apply more pressure for bigger earnings, staffing/service gets cuts to increase margins - unemployment grows, and the common folks who live paycheck to paycheck stop consuming. If you give a guy making $500k a year $50k more of disposable income a year, it most likely gets rolled into stocks/vacant summer home/etc. You give 10 people making $50k a year, an extra $5k of disposable income, you better believe they are going to go out and spend it and maintain jobs/growth in the market.

This is a just a really watered down version of how I can see it playing out.

BTW, to keep it on topic... I have 3 bikes down there now, and most the cyclists I know down there bought their bike in the US, and took them down and paid the duties (50% of value). It was still cheaper than buying a bike there.

[Jaybee]

Production isn't coming back here. Companies that have production in other SE Asian or Eastern European states will ramp up there. Those that wouldn't be able to build new plants or meaningfully upscale in 2ish years will just wait it out until things return.

No one is investing in a major job creating manufacturing plant here when the political winds will make it non-competetive in under a decade.

[cachagua]

Here's what I think should be done:

I think eBay should have another 20%-off coupon before the end of the week.

[flydhest]

One point of fact. Over the past year, manufacturing in the US has added more jobs than at any point since the 1990s.

This rise predates the trade war and likely comes in part because of the boom in oil—increases in chemicals and plastics as well as food manufacturing (which these days all have plastics plants attached to them).

Other thoughts:

when tariffs on washing machines came in earlier this year, domestic producers increased prices rather than expanding market share and prices on dryers (no tariffs) went up as well.

In 2016, the previous administration put punitive tariffs on washing machines coming in from China, then 70 percent of US imports. Within a few months we were importing washing machines close to 65 percent of US imports. In related news, Vietnam was importing washing machine parts from China.

[verticaldoug]

One point of fact. Over the past year, manufacturing in the US has added more jobs than at any point since the 1990s.

This rise predates the trade war and likely comes in part because of the boom in oil—increases in chemicals and plastics as well as food manufacturing (which these days all have plastics plants attached to them).

Other thoughts:

when tariffs on washing machines came in earlier this year, domestic producers increased prices rather than expanding market share and prices on dryers (no tariffs) went up as well.

In 2016, the previous administration put punitive tariffs on washing machines coming in from China, then 70 percent of US imports. Within a few months we were importing washing machines close to 65 percent of US imports. In related news, Vietnam was importing washing machine parts from China.

I downloaded some data from the BLS.

The 12mo rolling gain is 346,000 manufacturing jobs which is a great run rate since the previously yearly gains are 207,00 in 2011, 2017 and 208,000 in 2014.

BLS data points to Metal Fabrications, and Transportation. Although there have been some gains in Autos, the bulk is in Aerospace which for Boeing and Defense Industry makes sense. I think this also then feeds into the metal fabrication.

I attached the BLS Manufacturing total employment chart. The hollowing out of manufacturing was going back to the 80's , but really accelerated under Bush 2.

[zap]

In related news, Vietnam was importing washing machine parts from China.

The not quite so new frontier.

More and more cost "effective" products are manufactured in Vietnam.

[oldpotatoe]

I think the 'process' does matter..nobody likes to be bullied. Imagine you are negotiating the $ of a new car and the dealer starts yelling at you..adios..I think most all would like to see better trade relations/agreements in this global economy but 'destroying a village to save it', may not work..IMHO..

[Jaybee]

I downloaded some data from the BLS.

The 12mo rolling gain is 346,000 manufacturing jobs which is a great run rate since the previously yearly gains are 207,00 in 2011, 2017 and 208,000 in 2014.

BLS data points to Metal Fabrications, and Transportation. Although there have been some gains in Autos, the bulk is in Aerospace which for Boeing and Defense Industry makes sense. I think this also then feeds into the metal fabrication.

I attached the BLS Manufacturing total employment chart. The hollowing out of manufacturing was going back to the 80's , but really accelerated under Bush 2.

Can someone describe a mechanism for this? What happened in the early 2000's that cratered manufacturing jobs? War on Terror - if so, how?

I feel like I should be able to work this out myself, but maybe I need more coffee.

[oldpotatoe]

Can someone describe a mechanism for this? What happened in the early 2000's that cratered manufacturing jobs? War on Terror - if so, how?

I feel like I should be able to work this out myself, but maybe I need more coffee.

Google
what caused US manufacturing to decline?

Unfortunately you'll see partisan/political articles..so it's kinda hard to find an objective answer via GOOGLE.

[binxnyrwarrsoul]

Here's what I think should be done:

I think eBay should have another 20%-off coupon before the end of the week.

Potd.

[HenryA]

Can someone describe a mechanism for this? What happened in the early 2000's that cratered manufacturing jobs? War on Terror - if so, how?

I feel like I should be able to work this out myself, but maybe I need more coffee.

China came fully on line.

In the 1950s there were about 500-600 million people in China. They were essentially a subsistence economy, wages were pretty much zero. Today there are almost 1.5 billion Chinese and there has been steady and enormous wage growth since around the turn of the century.

Why? Trade with the world. China fully joined the party with a huge population which was unemployed outside of subsistence. It was almost inevitable.

It is imperative that we keep some industry alive here within our borders. A national security imperative in terms of military defense capability.

Trade is great but we still need to be somewhat self sufficient and especially in the fundamentals or basics. If we had no auto industry we’d be buying other nations cars and at their prices and on their terms. No aviation industry, we’d be riding on other nation’s planes. Best situation is where we lead and are fully involved in industry. If you can’t make things for your self, you may find yourself at the mercy of others to provide them.

[saab2000]

No aviation industry, we’d be riding on other nation’s planes.

The US has an aviation industry but there is basically a duopoly in aviation. Of course, there are Embraer in Brazil and Bombardier in Canada and some Russian and Ukrainian manufacturers, but basically it's Boeing and Airbus.

The funny thing? Both of these mega-manufacturers have component suppliers all over the world and some Airbuses are assembled in the US and Boeing wings come from Japan. It's all about global trade.

Want our national airline to buy 100 777-300s? Give us a piece of the action. It's the modern way.

China buys a lot of airplanes.

[oldpotatoe]

The US has an aviation industry but there is basically a duopoly in aviation. Of course, there are Embraer in Brazil and Bombardier in Canada and some Russian and Ukrainian manufacturers, but basically it's Boeing and Airbus.

The funny thing? Both of these mega-manufacturers have component suppliers all over the world and some Airbuses are assembled in the US and Boeing wings come from Japan. It's all about global trade.

Want our national airline to buy 100 777-300s? Give us a piece of the action. It's the modern way.

China buys a lot of airplanes.

When we saw a Russian(Soviet) copy of a US aircraft..it was a 'B-2ski'..not sure what you call a Chinese 737/A320...
http://www.aeronewstv.com/en/industry/commercial-aviation/2944-comac-c919-boeing-737-airbus-a320-how-do-they-differ.html

[ColnagoC59]

China came fully on line.

In the 1950s there were about 500-600 million people in China. They were essentially a subsistence economy, wages were pretty much zero. Today there are almost 1.5 billion Chinese and there has been steady and enormous wage growth since around the turn of the century.

Why? Trade with the world. China fully joined the party with a huge population which was unemployed outside of subsistence. It was almost inevitable.

It is imperative that we keep some industry alive here within our borders. A national security imperative in terms of military defense capability.

Trade is great but we still need to be somewhat self sufficient and especially in the fundamentals or basics. If we had no auto industry we’d be buying other nations cars and at their prices and on their terms. No aviation industry, we’d be riding on other nation’s planes. Best situation is where we lead and are fully involved in industry. If you can’t make things for your self, you may find yourself at the mercy of others to provide them.

No, the free market dictates the terms. If the United States stopped building cars tomorrow, consumers could easily decide between South Korea, Japan and Germany. Also foreign auto companies have domestic plants and the U.S. can still set safety and emission standards. Car industry is becoming more and more automated, which means fewer and fewer jobs as well. And over the next few years electric vehicles become an even bigger factor and they require less moving parts and will be much simpler to build. Once the switch is on , traditional car builders like G.M. and Ford may find themselves at an even greater competitive disadvantage

[FlashUNC]

Want more wars? Erect trade barriers.

[gdw]

Want more wars? Erect trade barriers.

Please elaborate.

[rnhood]

France said they would go to war before they would remove their tariffs. And We might go to war before we remove the 25% tariff on pick-up trucks. Adding tariffs will bring out some spitt’n and bitching, but it’s going to start a war.

Almost no day goes by that someone doesn’t say, we should have universal heath are like all other industrialized nations. Well, why can’t we have the same tariff structure as these nations? Right now, our structure is among the lowest of all. If adding tariffs merely pushes industry to move manufacturing to other third world countries, that is fine. Isn’t that what we all would like to see, these poorer nations become more industrialized with a self sustaining economy?

Some manufacturing will move back here, though probably just some specialty operations.

[verticaldoug]

China came fully on line.

In the 1950s there were about 500-600 million people in China. They were essentially a subsistence economy, wages were pretty much zero. Today there are almost 1.5 billion Chinese and there has been steady and enormous wage growth since around the turn of the century.

Why? Trade with the world. China fully joined the party with a huge population which was unemployed outside of subsistence. It was almost inevitable.

It is imperative that we keep some industry alive here within our borders. A national security imperative in terms of military defense capability.

Trade is great but we still need to be somewhat self sufficient and especially in the fundamentals or basics. If we had no auto industry we’d be buying other nations cars and at their prices and on their terms. No aviation industry, we’d be riding on other nation’s planes. Best situation is where we lead and are fully involved in industry. If you can’t make things for your self, you may find yourself at the mercy of others to provide them.

Its always a combination of things. I think the leg down in the beginning of the decade from the post-dot.com / 9/11 / recession in the US which caused our economy to stumble. This lead to layoffs. Instead of rehiring in the US, the new jobs and capex went to China like you said as the economy recovered.

The second leg down into 2008, was the housing bubble which was already falling in Sept 2005. It just did not manifest itself in financial markets until 2008. Loss of housing starts led to all sorts of manufacturing declines, and since housing construction really is local, lead to more job losses. I think most large declines are usually linked to a recession.

Long term slow declines or lack of growth is more a secular/trade effect.

Another interesting data point is amount spent on stock buybacks was larger than CAPEX in the first half of 2018 according to Goldman.

[Aaron O]

Please elaborate.
Countries that aren't doing business together have less reason to cooperate. His point is exactly right. Who needs to conquer territory that you can lease and put a shopping center with a Mcdonalds on?

Why fight over resources you can earn in the market?

[saab2000]

Please elaborate.

The EU was formed to keep former adversaries from fighting. It has been pretty successful at keeping them from warring and has made Europe more prosperous.

[93KgBike]

It's hard to understand shouting about America not manufacturing textiles or steel, because that's just not true. Polartec is an American textile producer, best in the world, in fact. Nucor steel, right here Down South, is an American steel producer, best in the world, in fact.

If capital investors wanted it, we could do it all tomorrow. But capital investors want more profits, and labor costs are the #1 expenditure in commerce.

Internationally capitalized multi-national companies, like Ford or Carrier, aren't particularly American. Sure F-150 are assembled down here, but not one part is manufactured here. In Carrier's case the assembly is done in Mexico under NAFTA definitions that allow using 'made in the USA' labelling, but the company is actually Japanese.

Take mattresses for example; there used to be at least 30 American mattress manufacturers, recently. Today there are 2-3, but they are capitalized not to increase manufacturing, but to reduce it. The capital investors then raise prices and reduce labor costs AND introduce structured consumer debt - financing - into the market to create greater profits.

It's really evident that the fastest growth is in sectors selling debt. For example GM financing, Ford financing, Volkswagen financing are all larger and more profitable than the companies they service.

Or healthcare, where preventable diseases are the baseline for the hospital architecture, which is driven by the debt hospital corps can take on. So a trillion dollar industry making built environments for physicians to work in is rewarding only physicians that treat lifestyle driven diseases, and accomplishing it all based on leveraged 'growth'.

Education costs, housing costs, construction etc. all trend tightly along these lines.

It's not a problem of Americans can't. Americans DEFINITELY CAN. But we aren't, and there are reasons why we don't.

[gdw]

I'm well aware of the role trade has played in world history and warfare but question that sweeping generation. If you look at our country's recent history, we seem to find ourselves becoming involved in other countries civil wars. Afghanistan, Syria, The Balkins, Vietnam, Korea. Correct me if I'm wrong but it appears that ideological, ethnic, and religious tension seem to be the cause of most of the world's hot conflicts since the end of the second world war... Isreal vs the Arab nations, Pakistan vs India, Iran vs Iraq, Burma, etc. As to the EU, Western Europe learned from the second world war, the only fighting they were interested in was that which would preserve their colonies and they didn't do too well there.

[Mark McM]

It's hard to understand shouting about America not manufacturing textiles or steel, because that's just not true. Polartec is an American textile producer, best in the world, in fact.

Is that the same Polartec that has gone through 2 bankruptcies, and just announced that they will move all their manufacturing from Massachusetts to Tennessee due to the high cost of union labor, and the ability to cross-train workers on different machines (which the Massachusetts union laborers won't do)?

[FlashUNC]

I'm well aware of the role trade has played in world history and warfare but question that sweeping generation. If you look at our country's recent history, we seem to find ourselves becoming involved in other countries civil wars. Afghanistan, Syria, The Balkins, Vietnam, Korea. Correct me if I'm wrong but it appears that ideological, ethnic, and religious tension seem to be the cause of most of the world's hot conflicts since the end of the second world war... Isreal vs the Arab nations, Pakistan vs India, Iran vs Iraq, Burma, etc. As to the EU, Western Europe learned from the second world war, the only fighting they were interested in was that which would preserve their colonies and they didn't do too well there.

Europe has had its longest period of peace in a millenia, in large part because of the free movement of people and goods across borders on the Continent.

While one can argue it was inevitable, the US being pulled into World War II was a direct result of our oil embargo on the Japanese Empire.

Ye Gods, this country exists because of bad economic policy under King George III, and some dudes here were tired of it.

Barriers to trade, commerce and by extension open lines of communication inflame tension, heighten the possibility for misinterpretation of action, and open windows to the kind of nationalist jingoism that drags people to war. The Bretton Woods conference conclusion about World War II was right. Protectionism made things worse, not better, on the international stage during the Great Depression of the 1930s, and set the world on a path toward violence.

I'm not arguing no tariffs. There are good policy reasons for them. But as a whole, they should be used exceedingly sparingly, in my view. They have a whole host of knock-on effects that we can't always predict.

[HenryA]

No, the free market dictates the terms. If the United States stopped building cars tomorrow, consumers could easily decide between South Korea, Japan and Germany. Also foreign auto companies have domestic plants and the U.S. can still set safety and emission standards. Car industry is becoming more and more automated, which means fewer and fewer jobs as well. And over the next few years electric vehicles become an even bigger factor and they require less moving parts and will be much simpler to build. Once the switch is on , traditional car builders like G.M. and Ford may find themselves at an even greater competitive disadvantage

But its not a free market when there is only one supplier. Aviation as an example used above - two big companies control most of the world market. Boil that down to one and we’d all be riding on whatever they chose to make and at whatever price they picked. Nothing free about that.

And we have to actually make something. All this airy fairy talk about the service economy is just a pure lie. We might all be service workers but at some point someone has to actually make something. Someone has to raise the cattle and someone has to build the machines to make cattle into hamburger and some others need to build the machines to transport it or no Big Macs for you.

We GOTTA have a competent and capable infrastructure of business and industry. Outsourcing everything is not gonna work.

Within our borders government should stay out of picking the winners and losers. But when it comes to regulating how our country does business with the rest of the world it is a primary function of our government to do so in a manner that creates an environment that fosters success by Americans. This is one of the reasons we have a federal government. Its their job.

[Gummee]

If capital investors wanted it, we could do it all tomorrow. But capital investors want more profits, and labor costs are the #1 expenditure in commerce. People keep forgetting this small factoid.

Costs go up. Prices go up OR companies find alternative ways to keep profitable. Those alternate ways include off-shoring, automating, etc

M

[cmg]

"Within our borders government should stay out of picking the winners and losers. But when it comes to regulating how our country does business with the rest of the world it is a primary function of our government to do so in a manner that creates an environment that fosters success by Americans. This is one of the reasons we have a federal government. Its their job."

a rather optimistic statement. How can this be accomplished when congress is funded primarily by special interest? Congressmen do what their donors tell them to do. Tax break for the 1%, increase national debt by a trillion or so. Add 700 million to the military budget but you can't fund Medicare, welfare, social security and public education. Sorry the skepticism, wars in the middle east were for profit, ideology has nothing to do with it.

[FlashUNC]

But its not a free market when there is only one supplier. Aviation as an example used above - two big companies control most of the world market. Boil that down to one and we’d all be riding on whatever they chose to make and at whatever price they picked. Nothing free about that.

And we have to actually make something. All this airy fairy talk about the service economy is just a pure lie. We might all be service workers but at some point someone has to actually make something. Someone has to raise the cattle and someone has to build the machines to make cattle into hamburger and some others need to build the machines to transport it or no Big Macs for you.

We GOTTA have a competent and capable infrastructure of business and industry. Outsourcing everything is not gonna work.

Within our borders government should stay out of picking the winners and losers. But when it comes to regulating how our country does business with the rest of the world it is a primary function of our government to do so in a manner that creates an environment that fosters success by Americans. This is one of the reasons we have a federal government. Its their job.

Manufacturing's main issue in the US isn't offshoring, it's automation. As the Saint Louis Fed points out in the below link, once you strip out the price level gap that exists between the country's overall price level (rising at about 3.2 percent since postwar, versus 2.2 percent for manufacturing), manufacturing has played a pretty consistent role in GDP.

https://www.stlouisfed.org/on-the-economy/2017/april/us-manufacturing-really-declining

Here's the Jeep manufacturing line in Toledo during WWII:

http://www.vintagemilitarytrucks.com/M38_Willys_Jeep_Factory-b.jpg

Here's the Ford assembly line in Louisville from February:

https://media.ford.com/content/fordmedia/fna/us/en/news/2018/02/12/ford-increasing-production-of-navigator-expedition/jcr:content/image.img.881.495.jpg/1518410935734.jpg

You tell me what looks different.

[dancinkozmo]

Here's the Jeep manufacturing line in Toledo during WWII:

http://www.vintagemilitarytrucks.com/M38_Willys_Jeep_Factory-b.jpg

Here's the Ford assembly line in Louisville from February:

https://media.ford.com/content/fordmedia/fna/us/en/news/2018/02/12/ford-increasing-production-of-navigator-expedition/jcr:content/image.img.881.495.jpg/1518410935734.jpg

You tell me what looks different.

uuummmm....theyre building better quality cars in the first pic ???

[saab2000]

uuummmm....theyre building better quality cars in the first pic ???

More iconic, but almost certainly not better.

Automobiles are better today than they've ever been and that trend continues.

[Aaron O]

More iconic, but almost certainly not better.

Automobiles are better today than they've ever been and that trend continues.

No - everything was better "back then". Even "back then" was better back then. Everything went wrong with the current generation.

What's the matter with kids today?

[93KgBike]

Is that the same Polartec that has gone through 2 bankruptcies, and just announced that they will move all their manufacturing from Massachusetts to Tennessee due to the high cost of union labor, and the ability to cross-train workers on different machines (which the Massachusetts union laborers won't do)?

Bankruptcy shields companies from debt obligations, not quality control. Don Trump and George W. Bush have been through a combined 9 bankruptcies. If bankruptcy implied low quality, then you'd be arguing that they are terrible businessman and we elected low quality candidates.

Malden Mills was owned by its employees (shop-owned not union-shop) and had a hard time selling the best quality technical material textiles in the world into a market flooded by worthless Asian nylons. Bankruptcy allowed them to settle payroll and pensions for the American citizens they employed, but unfortunately also resulted in their debt being gobbled up by a capital investment fund. Ironically, the current tariffs would have benefited them, but came to late, and will hurt the investment fund that now owns them.

I've got a pair of The Black Bibs that are completely falling apart after 18 months (gotta post that review update) and Sugoi clothes badged (name licensed) Polartec that still look new 3 years later. My 8 year old Zion sofshell jacket, also Polartec badged, also still looks new 8 years later.

Americans did that. And I think my point stands.

[oldpotatoe]

If bankruptcy implied low quality, then you'd be arguing that they are terrible businessman and we elected low quality candidates.

DOH! You said it, I didn’t. No argument from the ‘old potatoe patch’...:eek:

[Mark McM]

Bankruptcy shields companies from debt obligations, not quality control. Don Trump and George W. Bush have been through a combined 9 bankruptcies. If bankruptcy implied low quality, then you'd be arguing that they are terrible businessman and we elected low quality candidates.

Well, I didn't bring that up, but now that you mention it ...

[HenryA]

Manufacturing's main issue in the US isn't offshoring, it's automation. As the Saint Louis Fed points out in the below link, once you strip out the price level gap that exists between the country's overall price level (rising at about 3.2 percent since postwar, versus 2.2 percent for manufacturing), manufacturing has played a pretty consistent role in GDP.

https://www.stlouisfed.org/on-the-economy/2017/april/us-manufacturing-really-declining

Here's the Jeep manufacturing line in Toledo during WWII:

http://www.vintagemilitarytrucks.com/M38_Willys_Jeep_Factory-b.jpg

Here's the Ford assembly line in Louisville from February:

https://media.ford.com/content/fordmedia/fna/us/en/news/2018/02/12/ford-increasing-production-of-navigator-expedition/jcr:content/image.img.881.495.jpg/1518410935734.jpg

You tell me what looks different.

Thats another discussion. We still need to keep the base here whether its a bunch of guys doing the work or a bunch of robots.

[FlashUNC]

Thats another discussion. We still need to keep the base here whether its a bunch of guys doing the work or a bunch of robots.

But the point of the article is that the base is very much here. Manufacturing as a percentage of real GDP has remained basically the same since WWII. What's changed is the employment level (down due to automation), productivity in the sector (way up, thanks robots), and price level gains not matching those of the broader economy.

If the argument is for low-cost, low-skill manufacturing jobs to return in droves, well, that's simply not going to happen. Those that did not move overseas were eliminated due to automation. Just doesn't take an army of hands to assemble a Jeep anymore.

[gasman]

[QUOTE=93KgBike;2428877


DOH! You said it, I didn’t. No argument from the ‘old potatoe patch’...:eek:

Careful

We’ve had a good discussion. Let’s stay on the rails.

[livingminimal]

just a minor note, the WWII truck picture apparently comes from a site that has some malware stuff going on. Our virus protector picked up on it.
Thanks-

[Davist]

While automation replaces low skill jobs, it actually creates much more than it replaces. The countries with the largest adoption of robotics (South Korea and Germany, IIRC) have had increases in jobs across the board.

In Loudoun County Virginia (I'm in the data center business, this is ground zero for the internet globally) they have 2.9% unemployment, and if ALL those folks were hired tomorrow, wouldn't fill HALF the data center jobs available. Local high schools have programs where kids graduate with a 2 year associates degree in cyber security to help fill these jobs. HIGH SCHOOL! Google/Microsoft/Intel/Facebook have stopped requiring 4 year degrees because they need people, as you've no doubt seen.

Here's a link on automation and jobs in general, 800k "lost" leads to 3.5M new jobs: https://fee.org/articles/automation-replaced-800-000-workers-then-it-created-35-million-new-jobs/

[goonster]

Local high schools have programs where kids graduate with a 2 year associates degree in cyber security to help fill these jobs.

What is the starting salary for these data center jobs?

[ptourkin]

But its not a free market when there is only one supplier. Aviation as an example used above - two big companies control most of the world market. Boil that down to one and we’d all be riding on whatever they chose to make and at whatever price they picked. Nothing free about that.

And we have to actually make something. All this airy fairy talk about the service economy is just a pure lie. We might all be service workers but at some point someone has to actually make something. Someone has to raise the cattle and someone has to build the machines to make cattle into hamburger and some others need to build the machines to transport it or no Big Macs for you.

We GOTTA have a competent and capable infrastructure of business and industry. Outsourcing everything is not gonna work.

Within our borders government should stay out of picking the winners and losers. But when it comes to regulating how our country does business with the rest of the world it is a primary function of our government to do so in a manner that creates an environment that fosters success by Americans. This is one of the reasons we have a federal government. Its their job.

I find it interesting that it is the federal government's job to make the world safe for American business but not to make a living wage and health care available to the people who work in those businesses, hence the movement of what American manufacturing is left to "right to work" states in the libertarian South.

Our government does pick the winners, and they are rapidly becoming oligarchs.

[HenryA]

I find it interesting that it is the federal government's job to make the world safe for American business but not to make a living wage and health care available to the people who work in those businesses, hence the movement of what American manufacturing is left to "right to work" states in the libertarian South.

Our government does pick the winners, and they are rapidly becoming oligarchs.

Lookin’ for trouble aren’t you?
What you wrote is not what I wrote.

Having a good paying job is really important but it takes an employer with money to pay it.

How can we possibly have any jobs here in any industry if the industry has moved to another country?

Jeeeshhhhh...

[Davist]

What is the starting salary for these data center jobs?

Cyber security is fairly "in demand" right now.. in the $50k's were cited. Quick google for Associates and Cyber Security seem to verify. Seems good to me!

In PHL (I see you're in SE PA) if you want to join the electrical union, right out of high school, 2 years at $25/hr plus OT AND you get both a journeyman certificate and an associates in electrical tech. Good stuff out there..

[sfscott]

To truly understand the futility of tariffs in a fun way, I suggest you watch the following:

1) Ben Stein in Ferris Bueller's Day off talking about...anyone? The Smoot-Hawley tariff; and

2) Jon Oliver's recent feature on trade and the sole "economist," Peter Navarro, that Jared found by searching books on Amazon that thinks they work.

I'd link them, but I'm not that good.

100 years ago, our fearless leader would be trying to save the buggy whip industry.

While we're extolling the virtues of things like clean coal and steel, the rest of the world is advancing 5G wireless, biotech, A/I and robotics.

Not dismissing the pain from economic dislocation, but all creatures and organizations must adapt or whither. This is not the first time--nor the last time the nature of an economy will change. I suggest getting ahead of it rather than pick a fight with a country that thinks in 100 year increments and has had no problem starving and abusing its people for the "greater good." Oh and holds as good portion of the increasing treasury debt.

[joosttx]

While we're extolling the virtues of things like clean coal and steel, the rest of the world is advancing 5G wireless, biotech, A/I and robotics.


<like>

[54ny77]

China has been a resounding success regarding its launch onto the modern world stage.

Of course the 40+ million of their own people that were killed under Mao might feel otherwise.

China came fully on line.

In the 1950s there were about 500-600 million people in China. They were essentially a subsistence economy, wages were pretty much zero. Today there are almost 1.5 billion Chinese and there has been steady and enormous wage growth since around the turn of the century.

Why? Trade with the world. China fully joined the party with a huge population which was unemployed outside of subsistence. It was almost inevitable.

It is imperative that we keep some industry alive here within our borders. A national security imperative in terms of military defense capability.

Trade is great but we still need to be somewhat self sufficient and especially in the fundamentals or basics. If we had no auto industry we’d be buying other nations cars and at their prices and on their terms. No aviation industry, we’d be riding on other nation’s planes. Best situation is where we lead and are fully involved in industry. If you can’t make things for your self, you may find yourself at the mercy of others to provide them.

[verticaldoug]

China has been a resounding success regarding its launch onto the modern world stage.

Of course the 40+ million of their own people that were killed under Mao might feel otherwise.

A bit of a silly comment, as silly as me complaining about the Native American genocide as the United States marched across the continent into modernity.

When you look at human history, there are more than enough skeletons to go around. Let's not even get started on Africa.

(if we want to complain about china,focus on the uighur camps now)

[BikeNY]

The more I read about all this $hit, the more I want to just cash everything out(except a couple of bikes, of course), buy a piece of land in the woods somewhere, build a tiny house and live off the grid!

But, I'd need to buy some nice solar panels and batteries, no doubt they're made in China and will soon cost 25% more. I'd also need a Surly Big Fat Dummy for cargo duty, which will also be more expensive real soon...

[oldpotatoe]

The more I read about all this $hit, the more I want to just cash everything out(except a couple of bikes, of course), buy a piece of land in the woods somewhere, build a tiny house and live off the grid!

But, I'd need to buy some nice solar panels and batteries, no doubt they're made in China and will soon cost 25% more. I'd also need a Surly Big Fat Dummy for cargo duty, which will also be more expensive real soon...

I hear ya brother..this stuff wears me out..be sure to stock up on ammo also..at least it's not made in China(lots made in Russia and ...Italy!!)..:eek:Right below..that worries me...SHTF, civilization is very fragile..

[redir]

What you really want to do is buy farm land and the equipment to run it. Because when the SHTF then you will be in demand.

[saab2000]

And strong, stable economic connections make it less likely that the S will HTF. I don't think isolationism is a good thing. Ask the North Koreans about that.

I am not able to really comment on the totality of the tariffs and in general they're not good but I think they are the result of the very skewed playing field the Chinese have been creating for the past couple decades.

I'd like to see a level playing field and the elimination of these tariffs and I think that's what most people would like to see.

Strong economic ties reduce the likelihood of wars and violent conflict because of the economic costs.

[HenryA]

China has been a resounding success regarding its launch onto the modern world stage.

Of course the 40+ million of their own people that were killed under Mao might feel otherwise.

Yep, I did not mention that part as its really outside the scope of this conversation. But the horrors committed probably held them back a couple of decades from joining the world markets. Hard to advance when you kill off many, many millions, including your smartest and most educated citizens.

Nothing I wrote should be taken in any way to indicate support for Communist China then or now. Its just my explanation of why.

[oldpotatoe]

And strong, stable economic connections make it less likely that the S will HTF. I don't think isolationism is a good thing. Ask the North Koreans about that.

I am not able to really comment on the totality of the tariffs and in general they're not good but I think they are the result of the very skewed playing field the Chinese have been creating for the past couple decades.

I'd like to see a level playing field and the elimination of these tariffs and I think that's what most people would like to see.

Strong economic ties reduce the likelihood of wars and violent conflict because of the economic costs.

NOT an economist but how do you do that? The guy in China who works in the T-shirt factory and he lives very well..on $20 per day, the US worker makes $20 per hour..labor is by far, the largest expense in any business..how do you make that playing field level?

Strong economies also make for Government misadventures, when you can afford a large military with a less than ethical or unscrupulous leader...

[redir]

I think this trade war is less about trade deficits then it is about Intellectual Property. People like Jack Ma have gotten rich by selling ripped of IP from around the world. IP isn't just computer chips it's also guitars and rubber duckies. There is a serious problem with it and from what I understand while it's gotten better it's been negotiated on before and isn't where it should be. So perhaps sometimes you just have to draw the line.

Of course the problem is history shows otherwise that there are any winners in a trade war.

Trump assumes the U.S. can act unilaterally without consequences. Economic history shows this doesn’t work. Arguably the last trade war led us into the Great Depression and the world’s economies are way more interdependent now than they were then.

So just as we are finally getting out of a recession, buckle up for whats to come.

[oldpotatoe]

I think this trade war is less about trade deficits then it is about Intellectual Property. People like Jack Ma have gotten rich by selling ripped of IP from around the world. IP isn't just computer chips it's also guitars and rubber duckies. There is a serious problem with it and from what I understand while it's gotten better it's been negotiated on before and isn't where it should be. So perhaps sometimes you just have to draw the line.

Of course the problem is history shows otherwise that there are any winners in a trade war.

Trump assumes the U.S. can act unilaterally without consequences. Economic history shows this doesn’t work. Arguably the last trade war led us into the Great Depression and the world’s economies are way more interdependent now than they were then.

So just as we are finally getting out of a recession, buckle up for whats to come.

Then why the trade wars with Europe..Japan, South Korea, CANADA..?

Again, a trade deficit doesn't = 'losing' and a trade surplus doesn't = 'winning.

[HenryA]

Not trade wars. Its renegotiation. Remember, the media and anyone who thinks this might upset their apple cart are going to gin this up into “the worst thing ever”. Both have a stake in controversy. Keep the news churning and people watching. Bend the news to your benefit.

[joosttx]

From PMW

http://www.paragonmachineworks.com/news
Price Increases

We know first-hand how difficult it is to survive in the bicycle industry, and that consumers want good value and excellent quality for their hard-earned money. For these reasons we have done our best to keep our prices reasonable and make exceptional products that we back up with excellent customer service. We are proud that we have been able to keep our prices relatively stable over the past decade by optimizing our manufacturing processes and upgrading our machinery. But times are changing and we have to adapt and be proactive to keep our business viable. Between dramatic increases in our business and employee insurance premiums, the tariffs implemented under the Trump administration, the research and development demands of keeping up with the rapidly evolving bicycle industry, and the increased cost of living, we have been pushed to the point of having to raise our prices.


We do not take this lightly and understand that finances are challenging for most of our customers. In the interest of fairness and their well-being, we will raise prices only by the amount needed to cover our increased expenses. We will continue to make relevant, high quality products that are backed up by excellent customer service. Our plan is as follows:


1) An across the board price increase of 5% on all of our products.
2) Increased pricing will take effect the week of November 5th – 9th, 2018. We encourage you to take advantage of our current pricing by ordering prior to these dates!


As always, we appreciate your support, ideas and encouragement. We feel so fortunate to be able to make our products in the USA and sell them to such a talented group of artisans.


Thank you.

[Big Dan]

Not trade wars. Its renegotiation. Remember, the media and anyone who thinks this might upset their apple cart are going to gin this up into “the worst thing ever”. Both have a stake in controversy. Keep the news churning and people watching. Bend the news to your benefit.

It is what it is. Call it what you like.

Prices are going up and the rich will get richer.

[redir]

Then why the trade wars with Europe..Japan, South Korea, CANADA..?

Again, a trade deficit doesn't = 'losing' and a trade surplus doesn't = 'winning.

This thread would be closed if I were to answer that question honestly. Lets just say you will never hear me utter the word President before the word Trump but rather always refer to it as 'this administration.' Someone(s) is/are in control here and then there is one who makes rash, uninformed, childish, ignorant, decisions. A sort of malignant Chauncey Gardner if ya know what I mean.

But yes I was not thinking of that but rather China where most of the focus is on and for good reasons.

[jtbadge]

From PMW

http://www.paragonmachineworks.com/news
Price Increases

We know first-hand how difficult it is to survive in the bicycle industry, and that consumers want good value and excellent quality for their hard-earned money. For these reasons we have done our best to keep our prices reasonable and make exceptional products that we back up with excellent customer service. We are proud that we have been able to keep our prices relatively stable over the past decade by optimizing our manufacturing processes and upgrading our machinery. But times are changing and we have to adapt and be proactive to keep our business viable. Between dramatic increases in our business and employee insurance premiums, the tariffs implemented under the Trump administration, the research and development demands of keeping up with the rapidly evolving bicycle industry, and the increased cost of living, we have been pushed to the point of having to raise our prices.


We do not take this lightly and understand that finances are challenging for most of our customers. In the interest of fairness and their well-being, we will raise prices only by the amount needed to cover our increased expenses. We will continue to make relevant, high quality products that are backed up by excellent customer service. Our plan is as follows:


1) An across the board price increase of 5% on all of our products.
2) Increased pricing will take effect the week of November 5th – 9th, 2018. We encourage you to take advantage of our current pricing by ordering prior to these dates!


As always, we appreciate your support, ideas and encouragement. We feel so fortunate to be able to make our products in the USA and sell them to such a talented group of artisans.


Thank you.

Similar report from White Industries:

http://www.whiteind.com/teriff/

TARIFF surcharge

In your recent orders you may have noticed there is a now a line item that says "TARIFF SURCHARGE: USA COMMODITY INCREASE DUE TO RECENTLY IMPOSED TARIFFS."

The surcharge is due to severe increases in material and bearing cost. Despite using US made aluminum, steel, and titanium, we have still seen an increase of well over 28% in raw material cost alone. For this reason we have had to start attaching a 4% surcharge on all orders. Rather than increasing our prices, the tariff surcharge is listed making it easy for us to adjust or hopefully eliminate this surcharge when/if the tariff situation stabilizes. Thank you for understanding.




-White Industries

[drewski]

This thread would be closed if I were to answer that question honestly. Lets just say you will never hear me utter the word President before the word Trump but rather always refer to it as 'this administration.' Someone(s) is/are in control here and then there is one who makes rash, uninformed, childish, ignorant, decisions. A sort of malignant Chauncey Gardner if ya know what I mean.

But yes I was not thinking of that but rather China where most of the focus is on and for good reasons.

"I watch TV." Spot on.

[HenryA]

Similar report from White Industries:

http://www.whiteind.com/teriff/

TARIFF surcharge

In your recent orders you may have noticed there is a now a line item that says "TARIFF SURCHARGE: USA COMMODITY INCREASE DUE TO RECENTLY IMPOSED TARIFFS."

The surcharge is due to severe increases in material and bearing cost. Despite using US made aluminum, steel, and titanium, we have still seen an increase of well over 28% in raw material cost alone. For this reason we have had to start attaching a 4% surcharge on all orders. Rather than increasing our prices, the tariff surcharge is listed making it easy for us to adjust or hopefully eliminate this surcharge when/if the tariff situation stabilizes. Thank you for understanding.




-White Industries



Or they could buy American aluminum. Nah that’d cost more which is why they use “import” material. And that’s not a knock against White or anyone in particular, but if you build your pricing on off shore materials or labor it might work out for you or it might not. Here, not so much.

And to address the Paragon price increase, I wonder what would happen if a Chinese manufacturer decided to knock off their catalog of parts and flood the market at 40% of Paragon’s current selling price? It’d be bad. Real bad.

[joosttx]

Or they could buy American aluminum. Nah that’d cost more which is why they use “import” material. And that’s not a knock against White or anyone in particular, but if you build your pricing on off shore materials or labor it might work out for you or it might not. Here, not so much.

And to address the Paragon price increase, I wonder what would happen if a Chinese manufacturer decided to knock off their catalog of parts and flood the market at 40% of Paragon’s current selling price? It’d be bad. Real bad.

WI claims to use USA made metal and claim that cost is going up. Just read what they wrote.

I doubt much would happen since there is enough innovation and brand loyalty in and for PMW to keep it moving and ahead. I would not buy a custom bike that used knocked off PMW products. I assume I am a normal buyer of custom bikes.

[mjb266]

And to address the Paragon price increase, I wonder what would happen if a Chinese manufacturer decided to knock off their catalog of parts and flood the market at 40% of Paragon’s current selling price? It’d be bad. Real bad.

Happened long ago. Look at Nova Cycle Supply. Paragon stuff is higher quality. Regarding Tarrifs, it’s going to create a lot of bad blood with no appreciable benefits but lots of downside risk. Stupid.

[verticaldoug]

Similar report from White Industries:

http://www.whiteind.com/teriff/

TARIFF surcharge

In your recent orders you may have noticed there is a now a line item that says "TARIFF SURCHARGE: USA COMMODITY INCREASE DUE TO RECENTLY IMPOSED TARIFFS."

The surcharge is due to severe increases in material and bearing cost. Despite using US made aluminum, steel, and titanium, we have still seen an increase of well over 28% in raw material cost alone. For this reason we have had to start attaching a 4% surcharge on all orders. Rather than increasing our prices, the tariff surcharge is listed making it easy for us to adjust or hopefully eliminate this surcharge when/if the tariff situation stabilizes. Thank you for understanding.




-White Industries



I think many of you are missing the irony of this post and it does prove why tariffs do not work.

Steel tariffs are 25% and aluminum 15%. Other products are starting at 10% and will increase to 25% at year end.

So common sense says the blended rate is <25%. So if the price increase White is seeing is 28%, then the suppliers are using tariffs as an excuse to hike prices.

I always saw this historically in Japan when they first introduced then raised national sales tax. If sales tax went up 3%, then prices would rise >3% since some vendors used tax confusion to hike prices.

A tariff is a tax, nothing more nothing less

You are introducing bad artificial inflation and usually when you tax something, you get less of it.

[joosttx]

I think many of you are missing the irony of this post and it does prove why tariffs do not work.

Steel tariffs are 25% and aluminum 15%. Other products are starting at 10% and will increase to 25% at year end.

So common sense says the blended rate is <25%. So if the price increase White is seeing is 28%, then the suppliers are using tariffs as an excuse to hike prices.

I always saw this historically in Japan when they first introduced then raised national sales tax. If sales tax went up 3%, then prices would rise >3% since some vendors used tax confusion to hike prices.

A tariff is a tax, nothing more nothing less

You are introducing bad artificial inflation and usually when you tax something, you get less of it.

This is an excellent example, I agree. It benefits the manufactures of steel. All I can say is I am sooooooooo happy I am not running a business selling high value inputs to soybean growers. imagine if china decided not to sell us antibiotics.

[dancinkozmo]

so these tariffs are how theyre going to recoupe the projected lost revenue from the recent "tax reform" legislation ?

[jtbadge]

so these tariffs are how theyre going to recoupe the lost revenue from the recent "tax reform" legislation ?

No, they're just going to cut civil services that the government "can't afford anymore."

[ColonelJLloyd]

No, they're just going to cut civil services that the government "can't afford anymore."

https://media.giphy.com/media/5nFShZWwq3fdm/giphy.gif

[goonster]

WI claims to use USA made metal and claim that cost is going up. Just read what they wrote.

In all likelihood, the aluminum starts out as an ingot from a smelter in Canada, and is then reprocessed in the U.S. into bar and sheet stock.

The merits of broad tariffs are subject to debate, but here's what isn't: "China" isn't paying them, American consumers are.

Argentina tried this in the 50's, and the stated objectives were not achieved. Can anyone point to a relevant example where they were successful?

[rnhood]

Well, France has tariffs, and they say that its been successful. Otherwise, they wouldn't have them. Germany, the same. In fact just about every industrialized nation has tariffs, most of which are higher than ours. Don't you think that they would remove them if they were not successful?

[bobswire]

Well, France has tariffs, and they say that its been successful. Otherwise, they wouldn't have them. Germany, the same. In fact just about every industrialized nation has tariffs, most of which are higher than ours. Don't you think that they would remove them if they were not successful?

Hey I'm all for the European mode of Social welfare, let's do it!!!!

[echappist]

I think this trade war is less about trade deficits then it is about Intellectual Property. People like Jack Ma have gotten rich by selling ripped of IP from around the world. IP isn't just computer chips it's also guitars and rubber duckies. There is a serious problem with it and from what I understand while it's gotten better it's been negotiated on before and isn't where it should be. So perhaps sometimes you just have to draw the line.

Of course the problem is history shows otherwise that there are any winners in a trade war.

Trump assumes the U.S. can act unilaterally without consequences. Economic history shows this doesn’t work. Arguably the last trade war led us into the Great Depression and the world’s economies are way more interdependent now than they were then.

So just as we are finally getting out of a recession, buckle up for whats to come.

Selling of counterfeit goods is small fry in the grand scheme of things (though it does make a few insanely rich). The real theft is the forced tech transfers. Foreign companies aren't allowed to operate on their own volition in China, and they have to form a "joint venture" in order to operate.

Mind you, this isn't just something directed only at American companies, and one could argue that if all the foreign countries had demanded something be changed, there could have been concessions. TPP was supposedly one way of banding together.

[HenryA]

Well, France has tariffs, and they say that its been successful. Otherwise, they wouldn't have them. Germany, the same. In fact just about every industrialized nation has tariffs, most of which are higher than ours. Don't you think that they would remove them if they were not successful?

I’m thinking about it and I think you have made a good point!

[goonster]

Well, France has tariffs, and they say that its been successful. Otherwise, they wouldn't have them. Germany, the same. In fact just about every industrialized nation has tariffs, most of which are higher than ours. Don't you think that they would remove them if they were not successful?

Yes, they have tariffs, intended to protect key industries and market sectors, at rates that have evolved over time into a complex web of negotiated trade relationships. As have we.

They have not rushed headlong into a trade war, imposing tariffs and threatening more in case of retaliation, until the furnaces at the Maxhuette, Hayange and Liege are firing again.

I have also lived in a developing country, under a regime sometimes described as "export-oriented industrialization," in which very high tariffs on consumer goods are used to protect government-aligned industries. This can have good outcomes if GDP growth is reinvested in infrastructure, but it only works for a limited time, depresses living standards and is essentially incompatible with democracy.

We have historically low unemployment, steady GDP growth, and low inflation. We also have income stagnation, growing wealth disparity, stagnant capital and irresponsible fiscal policy. The trade deficit on goods is in neither column.

[TonyG]

The merits of broad tariffs are subject to debate, but here's what isn't: "China" isn't paying them, American consumers are.



I may just make a post quoting this every few hours so the fact of the matter doesn't get lost in the theory.

[s4life]

Neither I think.. this trade war is about egos and posturing for re-election.

Actually the complains against China mostly come from the current setup they have to "legally" obtain IP from companies that want to do business there.. however, ultimately it's the companies choice not to agree.. but most do as they have a lot more to gain in terms of revenue.

I think this trade war is less about trade deficits then it is about Intellectual Property. People like Jack Ma have gotten rich by selling ripped of IP from around the world. IP isn't just computer chips it's also guitars and rubber duckies. There is a serious problem with it and from what I understand while it's gotten better it's been negotiated on before and isn't where it should be. So perhaps sometimes you just have to draw the line.

Of course the problem is history shows otherwise that there are any winners in a trade war.

Trump assumes the U.S. can act unilaterally without consequences. Economic history shows this doesn’t work. Arguably the last trade war led us into the Great Depression and the world’s economies are way more interdependent now than they were then.

So just as we are finally getting out of a recession, buckle up for whats to come.

[verticaldoug]

Well, France has tariffs, and they say that its been successful. Otherwise, they wouldn't have them. Germany, the same. In fact just about every industrialized nation has tariffs, most of which are higher than ours. Don't you think that they would remove them if they were not successful?

http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_152998.1%20Trade%20in%20goods%20and%20custo ms%20tariffs.pdf

It is easy to pick examples, but singular examples don't always tell the whole story. It is true that EU has a 10% tariff on autos while US only has a 2.5% tariff. But in this instance, autos = passenger cars. In 1964, there was the chicken tax where the Johnson administration retaliated against the tariff on US Chicken into Europe by imposing a 25% tariff on light trucks (pickups and SUVs). This tariff is still in place and Germany has offered to scrap the 10% tariff on autos in exchange for scraping the 25% tariff on light trucks.

(Do you think the choice of BMW to build X models in Spartenburg and Mercedes to build GL cllass in Tuscaloosa was random?)

Just because the French say tariffs are successful, doesn't mean they are not without costs. The agricultural industry is heavily subsidized in the EU. It is essentially a social program for the countryside and a romanticized notion of european rural life. We now have the 12b assistance to American Farmers to offer support for the price collapse in ag from China imposing a tariff.

On a slight tangent:
Technically the EU is to have no import tariffs between member nations, but this is circumvented with gov support payments to select industries across EU countries. The British did not vote brexit just because of immigration. They are tired of all the support transfer payments at the gov level which are essentially subsidies. This stuff has now grown so complex, the member states can't even agree on what total net benefits and net payments individual countries receive. Its one of the sticking points of the Brexit negotiation.

[pcxmbfj]

Neither I think.. this trade war is about egos and posturing for re-election.



and to distract from this administrations lack of fiscal disclosure.

[oldpotatoe]

Originally Posted by rnhood View Post
Well, France has tariffs, and they say that its been successful. Otherwise, they wouldn't have them. Germany, the same. In fact just about every industrialized nation has tariffs, most of which are higher than ours. Don't you think that they would remove them if they were not successful?

Tariffs are used successfully when a country wants to protect an industry where it cannot compete otherwise. Like steel, tariff on imported steel so the imported product is the same or a little bit more than domestically produced steel..but the result is higher prices..for the consumer.

Tariff on Chinese T-Shirts so they are the same $ as US made T-Shirts..BUT at an overall higher price. BUT tariffs shouldn't be a bludgeon, or a way to stroke an ego..'winning'..at the expense of the US consumer. But, that's what's happening..Not only with China but the EU, Japan, Canada, Mexico, South Korea.....so it was 'somebody'(not US consumer) winning..but no winning now..ask a US soy bean or almond or pig farmer..Then ask the ones in Brazil, who are selling all they can produce..

PLUS

Neither I think.. this trade war is about egos and posturing for re-election.
and to distract from this administrations lack of fiscal disclosure.

Fiscal irresponsibility...the 'fiscal hawks' in congress are either gone or in the bathroom sucking their thumb.

[BikeNY]

Or they could buy American aluminum. Nah that’d cost more which is why they use “import” material. And that’s not a knock against White or anyone in particular, but if you build your pricing on off shore materials or labor it might work out for you or it might not. Here, not so much.

And to address the Paragon price increase, I wonder what would happen if a Chinese manufacturer decided to knock off their catalog of parts and flood the market at 40% of Paragon’s current selling price? It’d be bad. Real bad.

I think many of you are missing the irony of this post and it does prove why tariffs do not work.

Steel tariffs are 25% and aluminum 15%. Other products are starting at 10% and will increase to 25% at year end.

So common sense says the blended rate is <25%. So if the price increase White is seeing is 28%, then the suppliers are using tariffs as an excuse to hike prices.

I always saw this historically in Japan when they first introduced then raised national sales tax. If sales tax went up 3%, then prices would rise >3% since some vendors used tax confusion to hike prices.

A tariff is a tax, nothing more nothing less

You are introducing bad artificial inflation and usually when you tax something, you get less of it.

Some reading comprehension issues here. White Industries specifically states they are using USA sourced raw material and are seeing greater than 28% price increases.

So that points to US companies taking advantage of the tariffs to hike their own prices and make more profits. Instead of keeping prices reasonable and trying to increase their market share. I'm sure it's MUCH more complicated than that, but that's what it looks like.

[Grant McLean]

White Industries specifically states they are using USA sourced raw material and are seeing greater than 28% price increases.

So that points to US companies taking advantage of the tariffs to hike their own prices and make more profits. Instead of keeping prices reasonable and trying to increase their market share. I'm sure it's MUCH more complicated than that, but that's what it looks like.

I can be complicated if there isn't just excess product or capacity laying around.
Prices go up because there isn't more supply, but more demand.
Until supply can get sorted out, there are going to be price increases.

I read that DT Swiss (who draw spokes in the USA) can't find a supplier of their
raw material in the USA, they have a relationship with a mill in eastern Europe.
That steel is now subject to a tariff. But their competitor Sapim import
finished spokes into the USA pay no tariff from Europe, so in that example,
the current policy is a disincentive to DT to manufacture in the USA.

-g

[flydhest]

Well, France has tariffs, and they say that its been successful. Otherwise, they wouldn't have them. Germany, the same. In fact just about every industrialized nation has tariffs, most of which are higher than ours. Don't you think that they would remove them if they were not successful?



Are you sure you believe this statement? Centuries where women are not allowed to vote. That must be successful or else that would be removed? OK, so it happened over time, but in the late 1800s, before the suffrage movement, was the right conclusion that keeping women from voting was successful because it hadn’t been changed? The voting rights act was passed in 1964. In 1960, would we have made the argument that disenfranchising through the government the right of blacks to vote was successful because it hadn’t been changed? It had been like that for 100 years. Do we conclude that it was “successful”?

[rnhood]

We're talking about tariffs, not voting rights. Maybe you are on the wrong thread, or perhaps you have three sheets in the wind on this beautiful Friday night.

Success depends on how its defined. Tariffs are often implemented to prop up and/or protect local industry, and thus this being the objective, then the measuring stick will be the performance and health of the specific industry. In other words, we need to know the objective, and success will be defined on how well the objective was met.

Our definitions for "success" of tariffs might be quite a bit different than the government than implemented the tariff. We tend to view from the consumer viewpoint, which is often not the case with our government.

In a perfect world there would be no tariffs, and as mentioned earlier even if this was the case, subsidies complicate the matter. We don't live in a perfect world so we come up with alternatives to live and thrive in our global society. Seems to me reciprocal tariffs might be a good solution, but that's not likely to happen either. So we use tariffs as a tool to negotiate trade agreements. I don't have too much of a problem with it, as long as it doesn't get out of hand. And I seriously doubt our administration is going to allow it to get out of hand. Doesn't look like Wall Street is too concerned either.

[MikeD]

I can be complicated if there isn't just excess product or capacity laying around.

Prices go up because there isn't more supply, but more demand.

Until supply can get sorted out, there are going to be price increases.



I read that DT Swiss (who draw spokes in the USA) can't find a supplier of their

raw material in the USA, they have a relationship with a mill in eastern Europe.

That steel is now subject to a tariff. But their competitor Sapim import

finished spokes into the USA pay no tariff from Europe, so in that example,

the current policy is a disincentive to DT to manufacture in the USA.



-g



That is not entirely true, according to this article https://www.bicycleretailer.com/industry-news/2018/07/02/us-spoke-makers-adjusting-steel-tariff#.W6WrioplCf0

Wheelsmith seems to be in a worse position.

[Grant McLean]

That is not entirely true, according to this article https://www.bicycleretailer.com/industry-news/2018/07/02/us-spoke-makers-adjusting-steel-tariff#.W6WrioplCf0


sorry, it was western Europe, not eastern.

"The tariff doesn't apply to finished goods, but stainless steel wire is considered a raw material."

"On the straight gauge, we're going to take a hit," said Chip Barbieri, the CEO & General Manager of DT Swiss, Inc., the company's U.S. operation. "You try to absorb as much as you can and look at where you can be more efficient, where you can absorb things."

[MikeD]

sorry, it was western Europe, not eastern.



"The tariff doesn't apply to finished goods, but stainless steel wire is considered a raw material."



"On the straight gauge, we're going to take a hit," said Chip Barbieri, the CEO & General Manager of DT Swiss, Inc., the company's U.S. operation. "You try to absorb as much as you can and look at where you can be more efficient, where you can absorb things."



"DT Swiss brings in stainless wire from Europe to make straight-gauge spokes. For its double-butted spokes, the company brings in spoke "blanks" from Europe that are not subject to the tariff, because they are considered a finished good. DT cuts and threads the blanks and forms the spoke ends in the U.S."

Did you even read the article?


Sent from my iPhone using Tapatalk Pro

[Grant McLean]

Did you even read the article?


I'm mystified what point you're trying to parse.

[Villgaxx]

so, what, you are saying is that maybe some folks could discuss the efficacy of tariffs with regards to trade and trade policy as a whole, but screaming about tariffs and engaging in a trade war when you have no idea what in the holy heck is going on might be a bad idea? especially if you are nominally the chief executive of a wealthy and heavily armed nation state currently confined, along with the rest of your particular species, to a single planet?

Yes, they have tariffs, intended to protect key industries and market sectors, at rates that have evolved over time into a complex web of negotiated trade relationships. As have we.

They have not rushed headlong into a trade war, imposing tariffs and threatening more in case of retaliation, until the furnaces at the Maxhuette, Hayange and Liege are firing again.

I have also lived in a developing country, under a regime sometimes described as "export-oriented industrialization," in which very high tariffs on consumer goods are used to protect government-aligned industries. This can have good outcomes if GDP growth is reinvested in infrastructure, but it only works for a limited time, depresses living standards and is essentially incompatible with democracy.

We have historically low unemployment, steady GDP growth, and low inflation. We also have income stagnation, growing wealth disparity, stagnant capital and irresponsible fiscal policy. The trade deficit on goods is in neither column.

[flydhest]

Just saying that “it must be successful because it hasn’t been changed” is an astounding logical fallacy.

If you are saying that laws/policies don’t get changed if there is a political process by which those benefitting from them can keep them from being changed ... well sure, but that statement is tautological.


We're talking about tariffs, not voting rights. Maybe you are on the wrong thread, or perhaps you have three sheets in the wind on this beautiful Friday night.



Success depends on how its defined. Tariffs are often implemented to prop up and/or protect local industry, and thus this being the objective, then the measuring stick will be the performance and health of the specific industry. In other words, we need to know the objective, and success will be defined on how well the objective was met.



Our definitions for "success" of tariffs might be quite a bit different than the government than implemented the tariff. We tend to view from the consumer viewpoint, which is often not the case with our government.



In a perfect world there would be no tariffs, and as mentioned earlier even if this was the case, subsidies complicate the matter. We don't live in a perfect world so we come up with alternatives to live and thrive in our global society. Seems to me reciprocal tariffs might be a good solution, but that's not likely to happen either. So we use tariffs as a tool to negotiate trade agreements. I don't have too much of a problem with it, as long as it doesn't get out of hand. And I seriously doubt our administration is going to allow it to get out of hand. Doesn't look like Wall Street is too concerned either.

[oldpotatoe]

Rnhood writes
And I seriously doubt our administration is going to allow it to get out of hand. Doesn't look like Wall Street is too concerned either.

As has been mentioned, this about ego, ‘winning’ and the midterms. I’d say tariffs on nearly 1/2 of all goods imported from one country(with another $267Billion to come?), plus tariffs on all of our other major trading partners, its already out out hand. Tariffs are supposed to be somewhat surgical, not a hammer wielded by one guy...ego?

And Wall Street isn’t Main Street. I doubt that soy, pig, almond, etc farmer has a bunch of $ in the stock market. No 401k either.

Just in, so much for negotiation.

https://thehill.com/policy/finance/407896-china-scraps-trade-talks-with-us-after-latest-round-of-trump-tariffs

[Spaghetti Legs]

I scanned the last few pages and didn’t see this. Apologies if duplicate post.

Trek will likely have to bump prices.

https://www.jsonline.com/story/money/business/2018/09/21/wisconsin-feels-sting-trade-war-trek-bicycle-farmers/1381287002/

[MikeD]

I'm mystified what point you're trying to parse.


You implied that it was their whole production that was affected. It's only straight gage spokes. Read what you initially wrote.

You also said they couldn't find a US supplier. That's wrong because they are currently looking, according to the article.

[Big Dan]

You implied that it was their whole production that was affected. It's only straight gage spokes. Read what you initially wrote.

You also said they couldn't find a US supplier. That's wrong because they are currently looking, according to the article.


So?
are prices going up?
Who's paying for that?

[OtayBW]

Success depends on how its defined. Tariffs are often implemented to prop up and/or protect local industry, and thus this being the objective, then the measuring stick will be the performance and health of the specific industry. In other words, we need to know the objective, and success will be defined on how well the objective was met.

Unfortunately, 'better performance' of e.g., the steel industry as a meaure of success following the implementation of tariffs does not account for collateral damage to other, related industries, particularly when retaliatory tariffs are imposed. The consequences are much more far-reaching as we continue to see...

[MikeD]

So?

are prices going up?

Who's paying for that?


What's more important, you having a good paying job (or any job) or paying a little more for stuff, because that's where this is headed with respect to China, if we allow them to continue their unfair trade practices unfettered.

[flydhest]

What's more important, you having a good paying job (or any job) or paying a little more for stuff, because that's where this is headed with respect to China, if we allow them to continue their unfair trade practices unfettered.



Mike,
The unemployment rate fell from 9.8 percent to the current 3.8 percent with millions of jobs created. I don’t see you think this is about there being any jobs or not. The Chinese trade practices fall into several categories. The “forced” transfer of IP is just a contract issue. If you have to give up IP to do business there, that is a cost-benefit question. The outright theft of IP is different, is clearly a problem, and results in less profit for US firms. The industrial policy accelerated the supplanting of US heavy (and dirty) industry, bu that sort of evolution was going to happen. It hurt here because it happened quickly and when the job market was soft.

One would be naive to think there weren’t problems to be resolved, but surely you don’t believe that somehow there won’t be any jobs left in the US because of Chinese trade practices.

[Big Dan]

What's more important, you having a good paying job (or any job) or paying a little more for stuff, because that's where this is headed with respect to China, if we allow them to continue their unfair trade practices unfettered.

You didn't answer my question.

[Grant McLean]

What's more important, you having a good paying job (or any job) or paying a little more for stuff, because that's where this is headed with respect to China, if we allow them to continue their unfair trade practices unfettered.

I think it depends whose job you're talking about.

My point with the spoke example is that implementing tariffs is picking winners
and losers, with a blunt instrument with many unintended consequnces that
affects jobs just as much as unfair trade practices.

I agree with you fair is fair, and paying more may be a good thing to consider,
but the bicycle supply chain is being caught up in an unfair way, with what I
believe is hurting some American bicycle companies, benefiting others, and
not addressing in any meaningful way the unfair trade practices.

Take WTB for example. California based, they have a domestic business in
the USA, supplying both OEM bike brands, and selling their parts to retail
stores through USA distributors. Their tires and rims are all made in China.

The effect of this tariff is potentially devastating. Bicycle brands that have spec'd their
products will switch to a competing brand that makes tires and rims somewhere else.
So Kenda, Schwalbe, Alex will likely get sales and WTB could lose a lot market share,
and have an effect on the American company. Is this a good trade policy?

WTB will be forced to relocate tire molds to other countries to retain their
business with the bike brands, the tire business isn't coming to the US, so all
this downside with no benefit to the American economy.

Patrick from WTB recently wrote:
"if we don’t move, we will lose market share to competitors, many of them non-U. S. companies who make
tires in Taiwan, Indonesia and other countries other than China. So then we have the U.S. Trade
Representative picking winners, and they are picking foreign companies, not U.S. companies.
If this happens, we will lose customers, lose margin and not make a profit. If we lose money,
we have less to invest in the company and less money to employ more people here."

https://www.bicycleretailer.com/industry-news/2018/09/11/brain-supplier-panel-sounds-planning-proposed-tariffs#.W6aAVNhKhE4

https://www.bicycleretailer.com/international/2018/08/28/vee-rubber-increasing-tire-production-capacity-thailand-due-proposed#.W6aAKthKhE4

[MikeD]

I think it depends whose job you're talking about.

My point with the spoke example is that implementing tariffs is picking winners
and losers, with a blunt instrument with many unintended consequnces that
affects jobs just as much as unfair trade practices.

I agree with you fair is fair, and paying more may be a good thing to consider,
but the bicycle supply chain is being caught up in an unfair way, with what I
believe is hurting some American bicycle companies, benefiting others, and
not addressing in any meaningful way the unfair trade practices.

Take WTB for example. California based, they have a domestic business in
the USA, supplying both OEM bike brands, and selling their parts to retail
stores through USA distributors. Their tires and rims are all made in China.

The effect of this tariff is potentially devastating. Bicycle brands that have spec'd their
products will switch to a competing brand that makes tires and rims somewhere else.
So Kenda, Schwalbe, Alex will likely get sales and WTB could lose a lot market share,
and have an effect on the American company. Is this a good trade policy?

WTB will be forced to relocate tire molds to other countries to retain their
business with the bike brands, the tire business isn't coming to the US, so all
this downside with no benefit to the American economy.

Patrick from WTB recently wrote:
"if we don’t move, we will lose market share to competitors, many of them non-U. S. companies who make
tires in Taiwan, Indonesia and other countries other than China. So then we have the U.S. Trade
Representative picking winners, and they are picking foreign companies, not U.S. companies.
If this happens, we will lose customers, lose margin and not make a profit. If we lose money,
we have less to invest in the company and less money to employ more people here."

https://www.bicycleretailer.com/industry-news/2018/09/11/brain-supplier-panel-sounds-planning-proposed-tariffs#.W6aAVNhKhE4

https://www.bicycleretailer.com/international/2018/08/28/vee-rubber-increasing-tire-production-capacity-thailand-due-proposed#.W6aAKthKhE4



I agree this sucks. Wonder why they aren't going for an exemption?


Sent from my iPhone using Tapatalk Pro

[verticaldoug]

I agree this sucks. Wonder why they aren't going for an exemption?


Sent from my iPhone using Tapatalk Pro

They may have applied for an exemption. They may have been denied. They may have missed some filing deadlines as these were very quick and if you are not a large company with a team of lawyers or lobbyists looking for this stuff, you may have missed it. Now that the item is on the list, the process of appealing and trying to get it removed will not have rendered a decision. In addition, the queue for exemptions may already being overwhelming the ability of USTR staff to process the applications. You are now pushing on a string which disappears into a blackhole.

There is a mismatch of process here. The enacting of the tariffs being driven by Trump is very fast with arbitary deadlines and may or may not be haphazard. The application for an exemption will be driven by a well defined process with no defined deadline for ruling which is a hard decision to reverse current US policy.

[pbarry]

They may have applied for an exemption. They may have been denied. They may have missed some filing deadlines as these were very quick and if you are not a large company with a team of lawyers or lobbyists looking for this stuff, you may have missed it. Now that the item is on the list, the process of appealing and trying to get it removed will not have rendered a decision. In addition, the queue for exemptions may already being overwhelming the ability of USTR staff to process the applications. You are now pushing on a string which disappears into a blackhole.

There is a mismatch of process here. The enacting of the tariffs being driven by Trump is very fast with arbitary deadlines and may or may not be haphazard. The application for an exemption will be driven by a well defined process with no defined deadline for ruling which is a hard decision to reverse current US policy.

Alcoa is still waiting for an exemption from the 10% tariff on Canadian Al , after applying for one on August 6. The co estimates it's costing them $14 million a month. Slab Al is not as sexy as the iPhone, but why does one get an exemption and not the other?

https://www.reuters.com/article/us-usa-trade-alcoa/alcoa-asks-us-government-for-tariff-exemption-on-canadian-aluminum-idUSKBN1KR277

[MikeD]

Alcoa is still waiting for an exemption from the 10% tariff on Canadian Al , after applying for one on August 6. The co estimates it's costing them $14 million a month. Slab Al is not as sexy as the iPhone, but why does one get an exemption and not the other?



https://www.reuters.com/article/us-usa-trade-alcoa/alcoa-asks-us-government-for-tariff-exemption-on-canadian-aluminum-idUSKBN1KR277


A lot of aluminum plants were shuttered because of high power costs and aluminum production uses a lot of power. Canada has access to cheap hydro power. The 10% tariff apparently isn't high enough for Alcoa to make it economically feasible to reopen mothballed plants. The Trump administration wants more production of steel and aluminum in the US. Maybe a NAFTA deal with Canada will cause the tariffs to be dropped.

[OtayBW]

On the news this morning: proposed 25% tariff on Japanese auto imports forthcoming. That should be very interesting....

[rnhood]

Japan will buckle as they can't afford the hit on their export market. I believe they have already offered to reduce the 39% tariff they currently have on agricultural products. It'll get worked out.

[oldpotatoe]

On the news this morning: proposed 25% tariff on Japanese auto imports forthcoming. That should be very interesting....

Didn't see that but with Ford(and the other 2, pretty sure) dumping sedans for trucks, trucks and more trucks(BIG margin, what a surprise), wonder what we'll be driving in a couple of years. PLUS, 2 days before midterms, world wide oil supplies will be YUGELY, BIGLY disrupted by trump sanctions on anybody buying Iranian oil..In spite of trump's bluster, 2 of the 3 biggest OPEC oil producers politely said, 'pound sand' when he said, 'produce more, lower prices'(which hurt US oil producers..doh)...so....lotsa trucks that get poor mileage, and more expensive gas...along with canning the fuel mileage/CAFE 'standards' put in place by President Obama..gonna be an interesting fall/winter.

[Big Dan]

Japan will buckle as they can't afford the hit on their export market. I believe they have already offered to reduce the 39% tariff they currently have on agricultural products. It'll get worked out.

Japan will buckle?
How about the American consumer that actually pays the price?

[oldpotatoe]

Japan will buckle?
How about the American consumer that actually pays the price?

Yup...

US consumers of all things imported will be paying more for everything from cars to t-shirts to TVs to you name it...either more for a imported/tariffed one or more for a US made one. Cost of living and US standard of living isn't going to magically go down to be able to compete with Asian(and Canadian and Mexican and European) products..

[Big Dan]

Yup...

US consumers of all things imported will be paying more for everything from cars to t-shirts to TVs to you name it...either more for a imported/tariffed one or more for a US made one. Cost of living and US standard of living isn't going to magically go down to be able to compete with Asian(and Canadian and Mexican and European) products..

Correct.
Seems to be missing from some of the tariff supporters.

[oldpotatoe]

Correct.
Seems to be missing from some of the tariff supporters.

The 'tariff supporters' thinks this is trump's way to 'negotiate'..master negotiator and all that...yell, bully, use as an axe rather than a scalpel..about winning and no concern about who gets hurt..my last post cuz this all makes me really angry and I don't want to derail this very interesting discussion...

Vote, vote November 5th!!

[echappist]

I scanned the last few pages and didn’t see this. Apologies if duplicate post.

Trek will likely have to bump prices.

https://www.jsonline.com/story/money/business/2018/09/21/wisconsin-feels-sting-trade-war-trek-bicycle-farmers/1381287002/

they already have. about 5% price increase

which is why i'm getting a new bike now, as i'd expect to see increases across the board. maybe a few years from now, the tariffs will be lifted, but I doubt the prices would correspondingly go down.

surprisingly, i'd have though that most would not be affected, as Merida and Giant are the ones making most of the carbon composites, and they have factories in Taiwan...

[MikeD]

The 'tariff supporters' thinks this is trump's way to 'negotiate'..master negotiator and all that...yell, bully, use as an axe rather than a scalpel..about winning and no concern about who gets hurt..my last post cuz this all makes me really angry and I don't want to derail this very interesting discussion...



Vote, vote November 5th!!



Yeah, vote Republican unless you want to crash the economy.

[Spaghetti Legs]

they already have. about 5% price increase

which is why i'm getting a new bike now, as i'd expect to see increases across the board. maybe a few years from now, the tariffs will be lifted, but I doubt the prices would correspondingly go down.

surprisingly, i'd have though that most would not be affected, as Merida and Giant are the ones making most of the carbon composites, and they have factories in Taiwan...

I'm curious if Trek makes their top end frames in Wisconsin or are those made in China too? Interesting how this will affect some European brands and their competitiveness. Top end Colnago frames are still made in Italy. I'm not sure if their Chinese made frames come back to Italy for painting or warehousing before re-shipment overseas. My guess is not.

Anyway, the whole tariff business is a horrible way, IMO, of dealing with the very real problem of Chinese IP theft. My understanding is that there were negotiations regarding IP theft problem ongoing until the tariffs hit, then the Chinese walked away.

[AngryScientist]

Yeah, vote Republican unless you want to crash the economy.

this thread has been incredibly productive and stayed so for quite some time. comments like this are not necessary, funny, or tolerated here. take your trolling elsewhere.

Infraction awarded.

[Mzilliox]

this thread has been incredibly productive and stayed so for quite some time. comments like this are not necessary, funny, or tolerated here. take your trolling elsewhere.

Infraction awarded.

thanks for this, it was all i could do not to reply:fight:

[JAGI410]

I just received an email from CSG (Cannondale/GT/Schwinn) that prices are increasing 5-8% on bikes and 8-10% on accessories starting Sept 29. The messages foreshadows the potential 25% increase on Jan 1st. The message does say that retail and wholesale will be adjusted to maintain the margin...but I'd expect to see less sales overall.

[TonyG]

this thread has been incredibly productive and stayed so for quite some time. comments like this are not necessary, funny, or tolerated here. take your trolling elsewhere.

Infraction awarded.

I was furiously typing out some historical facts like a hooked tuna. But at the last second spit the hook before I posted.

[GregL]

this thread has been incredibly productive and stayed so for quite some time. comments like this are not necessary, funny, or tolerated here. take your trolling elsewhere.

Infraction awarded.
Thank you for the very fair-minded moderation of this thread! It has been a thought-provoking and educational discussion. Hope this is the start of many more intelligent, respectful discussions!

Greg

[MikeD]

I found this an interesting quote from an article from Bicycle Retailer (link posted in one of the earlier postings), from a VP of Jamis.

"Because we have customers in the EU for whom there’s already an anti-dumping tariff that’s been in place for a long time, all the business we do in the EU has to be shipped out of Taiwan. We’re already dual-sourced for our products. If we have to dual-source inclusive of our USA production we don’t have to re-source, sort of speak. We’re already sourcing our product line for shipment into the EU out of Taiwan."

The fact is, for bicycles, you don't have to buy one that's made in China. If I look at the bikes I own, I've got some Chinese made WTB tires on a couple of mountain bikes, that's about it.

[echappist]

I'm curious if Trek makes their top end frames in Wisconsin or are those made in China too? Interesting how this will affect some European brands and their competitiveness. Top end Colnago frames are still made in Italy. I'm not sure if their Chinese made frames come back to Italy for painting or warehousing before re-shipment overseas. My guess is not.

Anyway, the whole tariff business is a horrible way, IMO, of dealing with the very real problem of Chinese IP theft. My understanding is that there were negotiations regarding IP theft problem ongoing until the tariffs hit, then the Chinese walked away.

You bring up a good point. My recollection is that anything OCLV 700 series is made in Wisconsin, if not the 600 series as well. I havent compared the before/after prices of their lower range bikes, but something makes me think that they are spreading the tariff hit across the board. Perhaps those shopping the $750-$1500 range are a lot more price sensitive than those buying a (at least) $4k Madone/Emonda. So they minimize the ncrease on the lower end and make it back with sales on the higher end.

More interesting would be buying European bikes as you alluded. If they originated from PR China but has already paid duties upon emtry to Europe, is their further importation subjected to tariffs?

[Big Dan]

I found this an interesting quote from an article from Bicycle Retailer (link posted in one of the earlier postings), from a VP of Jamis.

"Because we have customers in the EU for whom there’s already an anti-dumping tariff that’s been in place for a long time, all the business we do in the EU has to be shipped out of Taiwan. We’re already dual-sourced for our products. If we have to dual-source inclusive of our USA production we don’t have to re-source, sort of speak. We’re already sourcing our product line for shipment into the EU out of Taiwan."

The fact is, for bicycles, you don't have to buy one that's made in China. If I look at the bikes I own, I've got some Chinese made WTB tires on a couple of mountain bikes, that's about it.

All prices are going to go up.
Watch it happen.

[GregL]

All prices are going to go up.
Watch it happen.
Agreed completely. All prices will go up to "spread the pain" over a larger customer base. As has been said elsewhere in this thread, this is a tax. The tax will be passed on from the vendors to the customers. It's the unintended consequences of this tax that will be interesting.

Greg

[s4life]

Agreed completely. All prices will go up to "spread the pain" over a larger customer base. As has been said elsewhere in this thread, this is a tax. The tax will be passed on from the vendors to the customers. It's the unintended consequences of this tax that will be interesting.

Greg

It sort makes sense for someone like Trump to pick winners and losers based on loyalty, regardless of economic impact. He's already redirected around 12bn to cover for the (chinese retaliation related) losses of soy bean producers -- almost all of which are located in red states. There's very little chance of that happening to a business in a blue state.

[OtayBW]

....redirected around 12bn to cover for the (chinese retaliation related) losses of soy bean producers...Hmmm. Sounds like a particular type of program/policy that.....that....er, that would get me an infraction if I mentioned it! :banana:

[pbarry]

https://www.npr.org/2018/09/24/651221317/u-s-tariffs-on-china-may-force-california-company-to-move-production-overseas

CORNISH: Can you imagine in the long run these tariffs helping you at all?

EMERSON: These tariffs are going to destroy our business and force us to move offshore. I think of tariffs as a wall built around the United States. And if your business is inside that wall, it becomes very difficult to bring parts in. And it also becomes very difficult to move parts out. The smartest thing for us to do, which is what the law is telling us, is to move all of our production outside that wall. That allows us to sell internationally without any barriers or added costs. The most galling thing about the tariffs is the administration has created a tunnel under this wall that allows my Chinese competitors to bring all their products into the United States tariff-free.

CORNISH: What do you mean by that?

EMERSON: If you look at the list of what is being tariffed, it's all parts, mostly, at least in my bike light, scuba diving light and cinema and photography light space. I have a - many, many, many competitors out of Asia and China in particular that are not being tariffed at all. A finished flashlight will come into the United States tariff-free under the new tariffs. Meanwhile, my business that builds in the United States, all of the parts we buy are being tariffed.

[joosttx]

It sort makes sense for someone like Trump to pick winners and losers based on loyalty, regardless of economic impact. He's already redirected around 12bn to cover for the (chinese retaliation related) losses of soy bean producers -- almost all of which are located in red states. There's very little chance of that happening to a business in a blue state.

Food security is a very real thing unlike protecting steel manufactures for national security. These tariffs cannot drive out our soybean/corn producers or there will be national security fractures. I know we have surplus but.....

and yes, it is a little bit of picking winners but it is about food security.

[MikeD]

I guess most of us are lucky we don't live in the EU, that has a 48.5% tariff on Chinese made bikes, instead of the 10% tariff that was just imposed. https://www.cnbc.com/2018/06/04/reuters-america-eu-looks-into-extending-dumping-duties-on-chinese-bicycles.html. How does Trek, Cannondale, Specialized and others operate in the EU subject to that kind of tariff?

[joosttx]

I guess most of us are lucky we don't live in the EU, that has a 48.5% tariff on Chinese made bikes, instead of the 10% tariff that was just imposed. https://www.cnbc.com/2018/06/04/reuters-america-eu-looks-into-extending-dumping-duties-on-chinese-bicycles.html. How does Trek, Cannondale, Specialized and others operate in the EU subject to that kind of tariff?

They don’t really. At least in The Netherlands. Most bike brands are European and in the nonperformance market (where the money is) US brands are nonexistent.

[Grant McLean]

I guess most of us are lucky we don't live in the EU, that has a 48.5% tariff on Chinese made bikes, instead of the 10% tariff that was just imposed. https://www.cnbc.com/2018/06/04/reuters-america-eu-looks-into-extending-dumping-duties-on-chinese-bicycles.html. How does Trek, Cannondale, Specialized and others operate in the EU subject to that kind of tariff?

Europe is a great place to live, especially if you sell e-bikes.

Germany has a large quantity of domestic brands selling e-bikes in Europe,
and Bosch was very early to market in the eBike mid-drive system.

https://www.bosch-ebike.com/en/service/brands/all-brands/

-g

[HenryA]

But what will we do without our cheap Chinese crap?
Walmart bikes will go up $8.99.
The horror!

[jtbadge]

But what will we do without our cheap Chinese crap?
Walmart bikes will go up $8.99.
The horror!

This is causing bike and component prices to go up across the board, including those made in the US from US materials. Try again.

[Jaybee]

This is causing bike and component prices to go up across the board, including those made in the US from US materials. Try again.

And beyond bikes, this is a regressive tax on the members of society least able to absorb the cost.

[simonov]

This is causing bike and component prices to go up across the board, including those made in the US from US materials. Try again.

Exactly. Companies will, understandably, spread the impact across their entire product line.

But what will we do without our cheap Chinese crap?
Walmart bikes will go up $8.99.
The horror!

And for many of the people buying that Walmart bike, the extra $8.99 may be the difference between buying the bike or not. It may not seem like much to those of us who can afford the types of bikes fawned over on this forum, but we're a tiny sliver of a tiny sliver of the bike buying world. For most people, particularly those struggling to get by on low wages, any increase in price will be hard to absorb. Which is actually why it makes sense to spread the impact across a product line. If a top of the line Madone goes up by a few hundred, most buyers won't even flinch outside of a little grumble about tariffs. But if that same impact was heaped entirely on the cheap stuff at the bottom of the product line, they'd sell far fewer bikes.

[oldpotatoe]

But what will we do without our cheap Chinese crap?
Walmart bikes will go up $8.99.
The horror!

Try again..actually about $25..which is real money for some who want to buy their kid a bike for Christmas. Prices of almost everything WILL go up..either via a tariff or via a more expensive US made product. As I mentioned, the US standard of living/salary structure won't change/lower overnight so a US produced bicycle will magically be the same price as pre tariff Chinese made one. About ego, 'winning', at the expense of the US consumer..Even you Henry.
Maybe you can afford it but a LOT of people really can't. AND not just China, but every major trading partner we have right now, every one. A basic misunderstanding of economics 101..again, 'trade deficit' doesn't equal losing and a trade surplus doesn't equal winning. More expensive US products in these imaginary new factories won't displace less expensive products made elsewhere.

And beyond bikes, this is a regressive tax on the members of society least able to absorb the cost.

True that..again, on the backs of the US consumer...

[goonster]

Walmart bikes will go up $8.99.
The horror!

Do you feel this way about other taxes?

[93KgBike]

It's already pretty difficult to service an independent bike shop's monthly nut. Margins are pretty thin. These tiny upward adjustments will drive people away from bike shops towards the WalMarts, because bike shops can't shove their debt forward.

Someday, even US debt won't be attractive. We'd be wise to lay off the tax cuts, and incentivize some capital return. GDP is gonna start to slide, and we are already leveraged way into the future.

[jtbadge]

And beyond bikes, this is a regressive tax on the members of society least able to absorb the cost.

100%. This, on top of the "tax cut" scam perpetrated on the American people, is going to make things tough going for the foreseeable future.

[joosttx]

And beyond bikes, this is a regressive tax on the members of society least able to absorb the cost.

Well least he is acting like a fiscal conservative in a weird anti-global sort of way.... :)

[HenryA]

Here, do some research.

https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

Then come back and answer a few questions.

1. Which nations have tariffs?

2. Which country has the largest tariffs?

3. Name one reason a nation might have a tariff.

4. Name several benefits that a nation and its citizens might have as a result of tariffs.

5. Name several detriments that a nation and its citizens might have as a result of tariffs.

6. Extra point! — tariffs are good or bad. Justify your answer with facts that you have discovered in your research. Cite those facts to bolster your answer.

[jtbadge]

There are plenty of good reasons to have tariffs. These were hastily and poorly implemented with the only interest being "winning" in the eyes of the president, and they are already hurting American businesses and consumers.

[rnhood]

There are plenty of good reasons to have tariffs. These were hastily and poorly implemented with the only interest being "winning" in the eyes of the president, and they are already hurting American businesses and consumers.

Disagree. I recommend credible news outlets, like the WSJ. Many others seem to only be in the "sensationalizing" business.

"Winning" is not the reason, the core reason is to negotiate better trade deals for our country. Doing it with groups of nations is ideally the best way on would think...if it works. But sometimes doing it nation by nation might yield better results. Ideally there would be no tariffs, and and no subsidizing. In reality however, this will never exist.

If tariffs do not work from a historical perspective, then why have countries not eliminated them?

[ptourkin]

Disagree. You need to read credible news outlets, like the WSJ.

"Winning" is not the reason, the core reason is to negotiate better trade deals for our country. Doing it with groups of nations is ideally the best way on would think...if it works. But sometimes doing it nation by nation might yield better results. Ideally there would be no tariffs, and and no subsidizing. In reality however, this will never exist.

If tariffs do not work from a historical perspective, then why have countries not eliminated them?

Okay:

https://www.wsj.com/articles/trumps-tariff-folly-1519950205

[flydhest]

Disagree.

If tariffs do not work from a historical perspective, then why have countries not eliminated them?


Such a silly canard. The reason is that political power and lobbying exists such that those where the benefits are localized can capture rents from the semi corrupt political process. If that is what you mean by “works” it is a staggeringly narrow definition. Lots of practices that are inefficient, uneconomic, to outright evil exist for hundreds of years at a time because political processes can be manipulated. Every basic political economy course will start somewhere close to this premise.

[TonyG]

Here, do some research.

https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

Then come back and answer a few questions.

1. Which nations have tariffs?

2. Which country has the largest tariffs?

3. Name one reason a nation might have a tariff.

4. Name several benefits that a nation and its citizens might have as a result of tariffs.

5. Name several detriments that a nation and its citizens might have as a result of tariffs.

6. Extra point! — tariffs are good or bad. Justify your answer with facts that you have discovered in your research. Cite those facts to bolster your answer.

I'll get right on it.:p

Makes me kinda laugh I was an international transfer pricing specialist for 26 years and spent a fair amount of time doing WTO research. Never planned on doing any for free though.

[joosttx]

I'll get right on it.:p

Makes me kinda laugh I was an international transfer pricing specialist for 26 years and spent a fair amount of time doing WTO research. Never planned on doing any for free though.

You should figure out how to “tariff” your internet research work :)

[oldpotatoe]

Well least he is acting like a fiscal conservative in a weird anti-global sort of way.... :)

Weird is right..$1TRILLION deficit this fiscal year doesn't = 'fiscal conservative'.
This kind of deficit in a booming economy is making economists everywhere(except at 1600 Penn Ave) scratch their heads or slap their foreheads..This continues to be a spending problem, not revenue problem(altho this economy certainly isn't 'payin for' the YUGE tax cuts for corporations and the very wealthy).

[ptourkin]

I'll get right on it.:p

Makes me kinda laugh I was an international transfer pricing specialist for 26 years and spent a fair amount of time doing WTO research. Never planned on doing any for free though.

I've mostly just lurked on this but I also did international trade and WTO law for the world's largest law firm (at the time) before bailing on big law. I didn't enjoy it enough to forgo my hourly, either.

Nonetheless, I've been impressed by the level of discussion here on some sides of this issue and seen some predictable reaction from another.

People can disagree on policy but it's pretty clear that Peter Navarro has negligible agreement from anyone conversant on these issues prior to say, this year.

[oldpotatoe]

Pretty good review of what this latest round(yesterday) means to main street..

https://www.cnbc.com/2018/09/25/with-trumps-250-billion-in-china-tariffs-heres-what-will-cost-more.html
Trump tweeted in June that "trade must be fair and no longer a one way street" and "in the end it will even out." The president's goal to narrow the trade deficit with tariffs, or "level the playing field," as Hogan puts it.

The trade deficit is essentially the difference between how much the U.S. imports, in terms of goods and services, and what it exports. It's around $50 billion overall, according to the U.S. Commerce Department, but with China specifically the trade deficit is around $375 billion. Trump claims the gap is a sign of economic weakness, though not all experts agree, and some question, regardless, whether tariffs are an effective response.



Again, either pay more for a foreign 'thing' because of a tariff or pay more for a domestically produced 'thing'..but higher prices for main street regardless.

[HenryA]

I'll get right on it.:p

Makes me kinda laugh I was an international transfer pricing specialist for 26 years and spent a fair amount of time doing WTO research. Never planned on doing any for free though.

:banana::banana::banana:

[Marc40a]

I don't know if this has been mentioned in the previous 15 pages, but Trek has hiked the prices on their 2019 models in the past week in response to the tariffs.

[Mzilliox]

Disagree. I recommend credible news outlets, like the WSJ. Many others seem to only be in the "sensationalizing" business.

"Winning" is not the reason, the core reason is to negotiate better trade deals for our country. Doing it with groups of nations is ideally the best way on would think...if it works. But sometimes doing it nation by nation might yield better results. Ideally there would be no tariffs, and and no subsidizing. In reality however, this will never exist.

If tariffs do not work from a historical perspective, then why have countries not eliminated them?

You obviously have not been paying attention. Winning is exactly the number one reason for every action by orangeatan. Winning and being Bigly is all he cares or knows about. This is us playing bully, acting as though the richest nation on earth, who has become so by exploitation, doesn't owe anything to anyone else, and in fact is getting shafted. Same attitude that I dislike in humans, so why is it flattering for a nation? im bored of this presidency, its become so predictable and nonsensical.

[FlashUNC]

Disagree. I recommend credible news outlets, like the WSJ. Many others seem to only be in the "sensationalizing" business.

"Winning" is not the reason, the core reason is to negotiate better trade deals for our country. Doing it with groups of nations is ideally the best way on would think...if it works. But sometimes doing it nation by nation might yield better results. Ideally there would be no tariffs, and and no subsidizing. In reality however, this will never exist.

If tariffs do not work from a historical perspective, then why have countries not eliminated them?

So what is "better"? What's the ultimate goal with our trade policy?

Is it cheaper goods for the end consumer? More efficient use of labor? Protection and indirect subsidy of US industries? Is it higher wages within the US and more blue collar jobs? If its the last question, I'm afraid folks will be very disappointed to know the answer to that one isn't going to be some magic wand of trade policy.

I have not seen this articulated in a way that makes any kind of sense from the Administration, other than some misplaced sense of American economic martyrdom.

[redir]

Articulation and this administration are not two words that go well together ;)

[gasman]

I’m going to close this thread for now. It’s skirted on politics but stayed remarkably civil thanks to all of you.
We can open another discussion when we see what effects the tariffs have on day to day costs of bicycles and bicycle goods.

[Elefantino]

I’m going to close this thread for now. It’s skirted on politics but stayed remarkably civil thanks to all of you.
We can open another discussion when we see what effects the tariffs have on day to day costs of bicycles and bicycle goods.

Thanks!