This will move from China to another country where it can be done cheaper, just like it did from Japan, Korea, Taiwan before.
tree68 charlie hebdo Times have changed. The quality and technology of many/most consumer and other goods made in China is at least as good or better than what might be made here (often hasn't been made here in 20+ years, just assembled, if that). Exactly. If we can figure out how to make those items at equal quality for $4 a day, we'll be all set. Unfortunately, we've largely priced ourselves out of the world labor market.
charlie hebdo Times have changed. The quality and technology of many/most consumer and other goods made in China is at least as good or better than what might be made here (often hasn't been made here in 20+ years, just assembled, if that).
Exactly. If we can figure out how to make those items at equal quality for $4 a day, we'll be all set.
Unfortunately, we've largely priced ourselves out of the world labor market.
Really cheap, low-tech goods were outsourced by China several years ago to SE Asia because of increased domestic wages. Then they shifted. Now they are often cutting edge tech and very concerned with IP protection. China has also become much more of a consumer economy than previously. The standard of living has increased greatly, as has per capita wealth.
jeffhergertA few years ago, maybe as much as 8 or 10 because time gets away from me, I was watching the head of the US Chamber of Commerece testifying before some congressional committee. He was asked what changes needed to be done in the US to make us competative with the world. His reply was we needed to get rid of minimum wage laws, labor laws, environmental laws and regulations, and just about any other regulation that business finds too restrictive. In effect he said to compete with the third world countries that our manufacturing was moving to, we would have to become a third world country, too. Jeff
His reply was we needed to get rid of minimum wage laws, labor laws, environmental laws and regulations, and just about any other regulation that business finds too restrictive. In effect he said to compete with the third world countries that our manufacturing was moving to, we would have to become a third world country, too.
Jeff
And it would apper that the current administration is trying to implement that strategy - making the USA 3rd World.
Never too old to have a happy childhood!
A few years ago, maybe as much as 8 or 10 because time gets away from me, I was watching the head of the US Chamber of Commerece testifying before some congressional committee. He was asked what changes needed to be done in the US to make us competative with the world.
EuclidI focus on Navarro because he is the only one who has come out and explained the tariff rationale to the American public. He explained it word for word the way the President explained it, and then he went on to elaborate. He reiterated the point made by the President that U.S. consumers will not pay the tariffs, but rather, China will. When pressed on this, he veered off into the premise that the tariffs will cost the Chinese in reduced sales, which of course they will. But he most clearly dodged and dismissed premise that the U.S. consumers will be paying the tariffs and this is pure deceit. The tariffs are not a cost that we impose on China as if we were placing a tax on them.
charlie hebdoTimes have changed. The quality and technology of many/most consumer and other goods made in China is at least as good or better than what might be made here (often hasn't been made here in 20+ years, just assembled, if that).
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tree68 Euclid We say it is not fair trade, and that China is cheating. A lot of the imbalance is in wages. There are places (not just China) paying people single digits per day to do work we insist on paying $15 an hour and more for. Something that takes, say, two manhours to manufacture costs $30 (and more) here, but perhaps fifty cents elsewhere. That they can manufacture an item and ship it half way around the world for less than we can produce it here speaks volumes. If we can figure a way around that issue, maybe things will balance out.
Euclid We say it is not fair trade, and that China is cheating.
A lot of the imbalance is in wages. There are places (not just China) paying people single digits per day to do work we insist on paying $15 an hour and more for.
Something that takes, say, two manhours to manufacture costs $30 (and more) here, but perhaps fifty cents elsewhere.
That they can manufacture an item and ship it half way around the world for less than we can produce it here speaks volumes.
If we can figure a way around that issue, maybe things will balance out.
Times have changed. The quality and technology of many/most consumer and other goods made in China is at least as good or better than what might be made here (often hasn't been made here in 20+ years, just assembled, if that).
EuclidWe say it is not fair trade, and that China is cheating.
Shadow the Cats ownerFor those that think doing business in China is a great thing here is what is required when you sign a contract to do business in China.
Now, all of a sudden, we don't like free trade because it is not fair. There are winners and losers. The playing field is not level. The evidence we cite is that we import more from China than they import from us. We treat this imbalance as a crime committed by China. We say it is not fair trade, and that China is cheating.
All of this sounds like the standard argument against capitalism. It is not fair. The rich get richer.
For those that think doing business in China is a great thing here is what is required when you sign a contract to do business in China. First off you agree to give the Chinese Government full and complete access to all Intellectial property you have along with all patents your company and employees hold. Second you grant them with no termintation clause at all full production rights to make same even if you stop working with the company your doing business with or if they start competing with you in the same markets. Next you agree to pay a tax of 30% on all your raw materials that makes your product even if they are locally sourced in China. Lastly your company agrees to pay a 10% export tax to the Chinese Government on all products made at the factory. My source for this is several classmates of my husbands that have been running factories for US based companies that are pulling out of China. That is what doing business in China is like.
The sudden emergence of this vindictive and spiteful attitude toward China reveals itself to be a populist backlash against China under the faulty premise that they stole all of our jobs and have been cheating ever since. So now we are going to finally stand up to them and set things straight. This is a pretty creepy attitude if you ask me. We are blaming them for our shortcomings. It is like an international lynching.
Apparently completely lost in this lust for vengeance is the fact that tariffs are a two-way street. They start fights. Both sides get hurt. That is why the economic wisdom concludes that it is best to never use tariffs to solve a problem. They always lead to retaliation and both sides end up with less than they started with.
This move on China is being framed as America reclaiming its lost glory by showing the world we will no longer be pushed around. It has been described as re-ordering the last several decades.
If this move on China with tariffs causes a U.S. recession, are we going to blame that on China too? Of course it will be their fault because if it wasn’t for their cheating, we would not have had to place tariffs on them. No, this is a dumb move and I suspect China may be smart enough to win this trade war.
Is that something to be happy about?
China is getting scared as hell why they were expecting about a 8% with all the government spending growth in the GDP. They had a less than 5% actual growth due to the tariffs. That means their economy shrunk overall 3%. Yes they showed a positive expansion however if you removed all the government expansion in spending they had a shrinking economy. This is the first time they ever had a shrinking economy in the last 3 decades ever since they started making everything for the world. People that know say it is about to hit the fan in China and get a heck of a lot worse overthere in the next 6 months.
CMStPnP Euclid I realize tariffs are not an act of war. But they raise tensions between two countries and make them become adversaries. Shooting wars don’t necessarily break out on rational grounds. Trade wars cause economic damage to both parties, and economic damage is sufficient to start a shooting war. I really don't see that happening. If it was solely just a China vs U.S. dispute, I still would not see it happening. It's China versus the rest of the world, however. Euclid The part Navarro leaves out is that our tariffs on Chinese imports are like a sales tax that raises the cost of those products. Well #1 your too fixated on Navarro, he does not dominate Economic policy anymore than John Bolton dominates foriegn policy. It's best to have a range of opinions on Economic policy than to get opinions from a choir. #2 you leave out that it is a "voluntary tax" on consumers. I would agree that consumers HAVE to pay the tax if China was the sole supplier of anything but that is rarely the case and consumers have a choice to switch to alternate items that are less costly.....and they usually will. If the tariffs across the board raised the price of a T-Shirt by 25% I would be concerned but I think you will find the manufacturer will flip T-Shirt manufacture to a country selling at Chinas price or cheaper OR the consumer will. Additionally, you have manufacturers that can cut the cost of the tariff impact via cutting costs such as say transportation. Did you know that Chinese government claims it is still a third world country for various advantages including discounted shipping costs (see link below), is that fair to the U.S.? Last China can cushion some of the tariffs via currency manipulation which I am sure it will continue to do because nowhere on our trade agenda do I see anyone working on that problem. You portray China as the victim here with it's back up against the wall. And I say not so much until we see 50-75% tarriffs. Thats how the Chinese are able to stall and stall, the % amounts Trump has assessed are really not starting to bite the Chinese yet and are only inflicting moderate pain........which they are attempting to circumvent via other means of cheating. https://www.scmp.com/news/china/diplomacy/article/2169144/chinas-cheap-shipping-advantage-explained Also, check out the explosion in National Debt China owes now. For the life of me I can't figure out why a country that is growing at 6-7% needs even more money that it has to borrow so much.....unless of course, some of the stats we are reading are BS. Also note we only owe China $1.3 Trillion of our debt and that figure might be declining, the rest is IOU's to the U.S. Taxpayer. China owes a much larger portion of it's debt to outside players, which should be worrying to people given how the increase in borrowing by China is increasing year over year.
Euclid I realize tariffs are not an act of war. But they raise tensions between two countries and make them become adversaries. Shooting wars don’t necessarily break out on rational grounds. Trade wars cause economic damage to both parties, and economic damage is sufficient to start a shooting war.
I really don't see that happening. If it was solely just a China vs U.S. dispute, I still would not see it happening. It's China versus the rest of the world, however.
Euclid The part Navarro leaves out is that our tariffs on Chinese imports are like a sales tax that raises the cost of those products.
Well #1 your too fixated on Navarro, he does not dominate Economic policy anymore than John Bolton dominates foriegn policy. It's best to have a range of opinions on Economic policy than to get opinions from a choir.
#2 you leave out that it is a "voluntary tax" on consumers. I would agree that consumers HAVE to pay the tax if China was the sole supplier of anything but that is rarely the case and consumers have a choice to switch to alternate items that are less costly.....and they usually will. If the tariffs across the board raised the price of a T-Shirt by 25% I would be concerned but I think you will find the manufacturer will flip T-Shirt manufacture to a country selling at Chinas price or cheaper OR the consumer will. Additionally, you have manufacturers that can cut the cost of the tariff impact via cutting costs such as say transportation. Did you know that Chinese government claims it is still a third world country for various advantages including discounted shipping costs (see link below), is that fair to the U.S.? Last China can cushion some of the tariffs via currency manipulation which I am sure it will continue to do because nowhere on our trade agenda do I see anyone working on that problem. You portray China as the victim here with it's back up against the wall. And I say not so much until we see 50-75% tarriffs. Thats how the Chinese are able to stall and stall, the % amounts Trump has assessed are really not starting to bite the Chinese yet and are only inflicting moderate pain........which they are attempting to circumvent via other means of cheating.
https://www.scmp.com/news/china/diplomacy/article/2169144/chinas-cheap-shipping-advantage-explained
Also, check out the explosion in National Debt China owes now. For the life of me I can't figure out why a country that is growing at 6-7% needs even more money that it has to borrow so much.....unless of course, some of the stats we are reading are BS. Also note we only owe China $1.3 Trillion of our debt and that figure might be declining, the rest is IOU's to the U.S. Taxpayer. China owes a much larger portion of it's debt to outside players, which should be worrying to people given how the increase in borrowing by China is increasing year over year.
I certainly did not intend to portray China as a victim in this with their back against the wall, as you say. I don’t like their lousy quality, and I wish we had never let our manufacturing sector freely move all production to China. I like quality. I think you get the best buy for the highest quality, and that people fool themselves by buying the lowest price goods.
I also believe that there is a secondary effect beyond just our job loss. That is that the lower cost products from China have changed our consumer market for our domestic manufacturing. China has taught our domestic manufacturing marketing sector that U.S. consumers want lowest price possible regardless of the lower quality that accompanies it. So now, unencumbered by the need to compete on quality, U.S. marketing is racing China to the lowest possible product pricing no matter how much quality is lost in the process. This seems to be just getting started, but when it plays out, the U.S. consumer will not have any choice but to accept the lowest possible quality. And also because the U.S. manufacturing has a higher overhead cost than China, the U.S. will have to achieve lower quality than China in order to compete with them.
So, no, I don’t think China is a victim here. If anything, I would not be surprised if they turn out to be the victor. While fundamentally, China does not pay the tariffs, they do have the option to pay them in effect by reimbursing those who do actually pay them. So China would, in effect, be discounting their products in order to maintain sales. I suspect that they are economically strong enough to do that. It would be a bold noble statement for them to pick up our tariff tab on behalf of the U.S. consumer. It would make them seem magnanimous and further endear them to the U.S. consumer while making our Administration’s tariffs seem petty. It would turn them into the winner in the eyes of the world.
I focus on Navarro because he is the only one who has come out and explained the tariff rationale to the American public. He explained it word for word the way the President explained it, and then he went on to elaborate. He reiterated the point made by the President that U.S. consumers will not pay the tariffs, but rather, China will. When pressed on this, he veered off into the premise that the tariffs will cost the Chinese in reduced sales, which of course they will. But he most clearly dodged and dismissed premise that the U.S. consumers will be paying the tariffs and this is pure deceit. The tariffs are not a cost that we impose on China as if we were placing a tax on them. Our only power is to impose the tariffs on the imported products for the purpose of raising the price and reducing the consumption. Then the reduced consumption hurts China.
The tariffs may be a voluntary tax on U.S. consumers considering that consumption is optional. But if they shift their purchases to other countries where no such tariffs apply, that new surge of demand upon those other countries will cause them to raise their price, and so the consumers will be paying the tariffs in the form of inflated prices from those substitute source countries.
Also, those other countries are not going to increase buying our products just because our consumers have started to buy their products. So again, we will have what tariff advocates call unfair trade; and they will want to put tariffs on those countries that have suddenly stepped up their imports to the U.S. as a workaround for our tariffs on China.
Shadow the Cats ownerThese 3 carriers account for 2300 out of the 2500 drivers all of which more than likely are already back at work.
EuclidI realize tariffs are not an act of war. But they raise tensions between two countries and make them become adversaries. Shooting wars don’t necessarily break out on rational grounds. Trade wars cause economic damage to both parties, and economic damage is sufficient to start a shooting war.
EuclidThe part Navarro leaves out is that our tariffs on Chinese imports are like a sales tax that raises the cost of those products.
zardoz over 2000 of those came from 2 carriers alone. NEMF a New England based LTL carrier that shut down due to losing money for years and Falcon which imploded when GM shut down the Lordstown OH plant which accounted for almost 80% of their freight. They were the dedicated steel hauling carrier for Auto plant in Lordstown. When GM closed that plant they lost their primary revenue stream and well they could not make up the difference. LME was a recent one they had been fighting the Teamsters for years over contract talks. LME drivers 3 times had voted out the Teamsters Union and 3 times the NLRB said they had to redo the vote. LME tried to create a new carrier and transfer all their freight to it like CF did and the Teamsters sued and won. So LME said fine and closed the doors putting everyone out of work. Don't believe everything your hearing on the Media reports when it comes to why a carrier shut down. The ones that have failed recently most of them had been on life support for a few years. Falcon was bought a few years ago by a Venture Capital firm that got tired of pouring money down that black hole and said the Hell with it. NEMF had a bigger issue no one wanted to drive for them why they had gone to a deferred maintance program and had a safer score that made them a target for the DOT on every scale. LME the owners there where just tired of dealing with the Teamsters and quit. These 3 carriers account for 2300 out of the 2500 drivers all of which more than likely are already back at work.
Shadow the Cats ownerEven during the last major recession my boss did not LAYOFF a single employee.
Euclid CMStPnP Euclid They say that trade wars can lead to real wars. Interesting because Japan's entry into World War II was prompted by another round of Economic Sanctions being imposed upon it by the United States. Not really a trade war there, we were punishing Japan for past aggression against another country. Sanctions are considered an act of war via international law. Tarriffs are not. Regardless the President usually has a Council of Economic Advisors which is a group of individuals (25 in 2016). Of which Navarro is a co-equal. If he is still in that capacity. I realize tariffs are not an act of war. But they raise tensions between two countries and make them become adversaries. Shooting wars don’t necessarily break out on rational grounds. Trade wars cause economic damage to both parties, and economic damage is sufficient to start a shooting war. Navarro may be a "co-equal" in some respect, but he is the one who has been interviewed on the news to explain what we are doing with tariffs on China. Our national position is that Americans need not worry because our tariffs on China will not cost us anything. He was asked about that, and he gave a very misleading answer that dodged the question. He said that China will bear costs of the tariffs by the reduction of sales of their products. That is perfectly true, but the clear implication of our officially stated position is that China pays all the costs, and that is an outright lie to the America people. It is crystal clear that Navarro is the architect of this misinformation contained in our official national position on our tariffs imposed on China. If you read his background, it is easy to see how radical he is with plans to bring back all lost manufacturing jobs by punishing the countries they went to. Navarro seems like a rather mean spirited and vindictive person who is seeking revenge on China because he thinks they have done us wrong. The part Navarro leaves out is that our tariffs on Chinese imports are like a sales tax that raises the cost of those products. That tax leaves less money for consumers to spend. When they spend less, U.S. economic growth slows down. As this slowdown cascades and ripples, it can lead to a recession. And with the two biggest actors in the world economy engaged in this tariff war, the recession can become world-wide. It will reduce that quality of life for billions of people.
CMStPnP Euclid They say that trade wars can lead to real wars. Interesting because Japan's entry into World War II was prompted by another round of Economic Sanctions being imposed upon it by the United States. Not really a trade war there, we were punishing Japan for past aggression against another country. Sanctions are considered an act of war via international law. Tarriffs are not. Regardless the President usually has a Council of Economic Advisors which is a group of individuals (25 in 2016). Of which Navarro is a co-equal. If he is still in that capacity.
Euclid They say that trade wars can lead to real wars.
Interesting because Japan's entry into World War II was prompted by another round of Economic Sanctions being imposed upon it by the United States. Not really a trade war there, we were punishing Japan for past aggression against another country. Sanctions are considered an act of war via international law. Tarriffs are not.
Regardless the President usually has a Council of Economic Advisors which is a group of individuals (25 in 2016). Of which Navarro is a co-equal. If he is still in that capacity.
I realize tariffs are not an act of war. But they raise tensions between two countries and make them become adversaries. Shooting wars don’t necessarily break out on rational grounds. Trade wars cause economic damage to both parties, and economic damage is sufficient to start a shooting war.
Navarro may be a "co-equal" in some respect, but he is the one who has been interviewed on the news to explain what we are doing with tariffs on China. Our national position is that Americans need not worry because our tariffs on China will not cost us anything. He was asked about that, and he gave a very misleading answer that dodged the question. He said that China will bear costs of the tariffs by the reduction of sales of their products.
That is perfectly true, but the clear implication of our officially stated position is that China pays all the costs, and that is an outright lie to the America people.
It is crystal clear that Navarro is the architect of this misinformation contained in our official national position on our tariffs imposed on China. If you read his background, it is easy to see how radical he is with plans to bring back all lost manufacturing jobs by punishing the countries they went to. Navarro seems like a rather mean spirited and vindictive person who is seeking revenge on China because he thinks they have done us wrong.
The part Navarro leaves out is that our tariffs on Chinese imports are like a sales tax that raises the cost of those products. That tax leaves less money for consumers to spend. When they spend less, U.S. economic growth slows down. As this slowdown cascades and ripples, it can lead to a recession. And with the two biggest actors in the world economy engaged in this tariff war, the recession can become world-wide. It will reduce that quality of life for billions of people.
Very well explained. Unfortunately, many Americans are taken in by the snake oil salesman in chief's lies.
BaltACDAAR has been reporting decreased car loading since the first of the year if not into the later part of 2018. I suspect solid business men have real distrust of Trump's economic policy or the lack thereof. Flip Flopping does not create trust.
Less than 5% in each traffic category is that a predictive of a business downturn or normal ebb and flow?
Also the largest two categories above 5% decline were Coal (no surprise there) and Frac Sand, which the article I read which I would love to link to but TRAINS gets upset because it is a competing publication.
Anyway they stated Frac Sand is increasingly sourced locally to where it is used which has led to drop off in shipments that were previously shipped across several states. Crude Oil shipments by rail are up 23% from last year in a YTD comparison to 2018.........according to AAR.
EuclidThey say that trade wars can lead to real wars.
zardozAnd now, coming soon to Wisconsin, FOXCONN (admittedly Foxconn is a Taiwanese company); however, the facility may not live up to the bogus promises Foxconn made when they were bribing our not-so-illustrious governor Scott Walker.
I read that as well. It's a glass half full or half empty scenario . Opposing politicans to Walker trotted out the glass half empty (including the old geazer that is Governor now). Proponents of Walker trotted out the glass half full.
Truth is the CEO of FOXCONN doesn't know yet either way but definitely wants a precence in Wisconsin he can expand later if needed. I believe he is also running for President of Taiwan so that has to be a distraction and FOXCONN might have a new CEO soon.
CMStPnP charlie hebdo We haven't manufactured most consumer electronics, for example I don't think that is true, I think that is political myth designed to get the electorate to give up hope on free markets and embrace a planned Economy. It's more accurate to say American Companies have not manufactured most consumer electronics on U.S. Soil in a while. GE Appliances, Whirlpool Appliances, Maytag Appliances, Kitchen Aide appliances still have a very substantial operating manufacturing plants in the United States. So does Texas Instruments, so does IBM, So does DELL COMPUTER, INTEL, AMD, etc, etc. A good portion of the companies above might not be American owned but they still manufacture in quantity here. A lot of the subcomponents might be from overseas but the main product still rolls off the line here. Perhaps nothing is built in Illinois anymore but you should visit major cities in Southern Michigan, Northern Kentucky, Alabama, Texas, Arizona, California, etc.
charlie hebdo We haven't manufactured most consumer electronics, for example
I don't think that is true, I think that is political myth designed to get the electorate to give up hope on free markets and embrace a planned Economy.
It's more accurate to say American Companies have not manufactured most consumer electronics on U.S. Soil in a while. GE Appliances, Whirlpool Appliances, Maytag Appliances, Kitchen Aide appliances still have a very substantial operating manufacturing plants in the United States. So does Texas Instruments, so does IBM, So does DELL COMPUTER, INTEL, AMD, etc, etc. A good portion of the companies above might not be American owned but they still manufacture in quantity here. A lot of the subcomponents might be from overseas but the main product still rolls off the line here.
Perhaps nothing is built in Illinois anymore but you should visit major cities in Southern Michigan, Northern Kentucky, Alabama, Texas, Arizona, California, etc.
Thanks to Chris / CopCarSS for my avatar.
CMStPnPI don't think that is true, I think that is political myth designed to get the electorate to give up hope on free markets and embrace a planned Economy.
CMStPnPIt's more accurate to say American Companies have not manufactured most consumer electronics on U.S. Soil in a while.
CMStPnPA good portion of the companies above might not be American owned but they still manufacture assemble in quantity here.
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Euclid To learn why we have suddenly veered into a trade war with China, it helps to know who Peter Navarro is. https://www.forbes.com/sites/paulmartyn/2018/08/22/the-navarro-effect-out-on-an-unconventional-limb/#2321df7a373a He seems way radical and has spent his life getting there. They say that trade wars can lead to real wars. I would say that if anyone can accomplish that, Navarro can.
To learn why we have suddenly veered into a trade war with China, it helps to know who Peter Navarro is.
https://www.forbes.com/sites/paulmartyn/2018/08/22/the-navarro-effect-out-on-an-unconventional-limb/#2321df7a373a
He seems way radical and has spent his life getting there. They say that trade wars can lead to real wars. I would say that if anyone can accomplish that, Navarro can.
Euclid. You've got that right!!
To paraphrase Woody Hayes, "In a trade war, there are multiple things that can happen, all of them bad! "
CMStPnPIt's more accurate to say American Companies have not manufactured most consumer electronics on U.S. Soil in a while. GE Appliances, Whirlpool Appliances, Maytag Appliances, Kitchen Aide appliances still have a very substantial operating manufacturing plants in the United States. So does Texas Instruments, so does IBM, So does DELL COMPUTER, INTEL, AMD, etc, etc. A good portion of the companies above might not be American owned but they still manufacture in quantity here. A lot of the subcomponents might be from overseas but the main product still rolls off the line here. Perhaps nothing is built in Illinois anymore but you should visit major cities in Southern Michigan, Northern Kentucky, Alabama, Texas, Arizona, California, etc.
https://gizmodo.com/foxconn-plant-to-open-in-2020-with-fewer-jobs-than-prom-1836280603
Learn more about Foxconn here: https://en.wikipedia.org/wiki/Foxconn
CMStPnPI think your going to find that if enough business leaves China, China will be forced into some kind of action to earn it back.
What might China do to earn it back, for instance?
Check the origin of parts of the appliances assembled here.
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