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/indu...s#.W6B3Yv5KjOQ

[Clean39T]

https://cyclingtips.com/2018/09/cycl...iffs-on-bikes/

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

Sent from my Pixel 2 XL using Tapatalk

[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]

Originally Posted by 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?

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]

Originally Posted by verticaldoug

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]

Originally Posted by Jef58

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]

Originally Posted by Jef58

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]

Originally Posted by verticaldoug

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]

Originally Posted by Cicli

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/he...cit-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]

Originally Posted by 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?

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]

Originally Posted by 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.

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]

Originally Posted by verticaldoug

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/yuwahed.../#6ba801d4d86d

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