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

[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]

Originally Posted by 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?

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]

Originally Posted by 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 ...

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).





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[joosttx]

Originally Posted by veloduffer

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).





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[HenryA]

Not everyone in the bike biz is complaining:

https://www.bicycleretailer.com/indu...n#.W6GARxpOnmo

[gasman]

Originally Posted by joosttx

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]

Originally Posted by gasman

No at all a helpful or needed comment.

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

[happycampyer]

Originally Posted by veloduffer

<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).





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As 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...