A new article, from the Railway Interchange show: http://trn.trains.com/news/news-wire/2019/09/25-rail-supplier-ceos-decry-chinese-business-practices
Steve SweeneyDigital Editor, Hobby
It seems to me the question is who should pay the subsidy -- the public in this country or the Chinese. Is it better to have public transport benefit in this country by having the Chinese offering low prices or is it better to subidize manufacturers in this country through high prices? Talk of economic warfare is a smokescreen. Talk of how much this country will benefit if the Chinese can't sell low priced equipment is overdone. Talk of the Chinese spying through using transit equipment is hard to believe. Fairness is in the eye of the beholder but free trade makes sense. Why force the public to pay high prices to provide higher, undeserved profits and to win the so called economic war? Since when have businessmen in this country developed a desire to help the public -- they would say what is good for business is good for the country but I'm not sure about that. Who is going to benefit from higher business profits deriving from charging high prices? Are we really talking about higher wages? Tell me about the job creators -- I can't recall them being mentioned in a while. If people in this country would spend more time studying economics we would be better off.
+1
If China becomes the sole supply source for all your railroad part needs for things such as brake parts signals trucks and other parts guess what will happen. They be able to say that unless you allow us to have control over your railroad we will cut off the supply of spare parts for the railroad.
China plays the long game they think decades ahead not the next quarter ahead. We either need to stop them now or it's going to be a lot harder to in the future.
Over the last 30 years railroads have become a conduit for imported goods. Replacing those long hauls from the coast to the American heartland with Peoria to Chicago type moves would be detrimental to railroads and perhaps a boon to the trucking industry. Railroad fortunes are now tied to Asian manufacturing..a hit to imports from Asia would have serious negative consequences for our railroads.
Shadow the Cats ownerChina plays the long game they think decades ahead not the next quarter ahead. We either need to stop them now or it's going to be a lot harder to in the future.
nhrandTalk of how much this country will benefit if the Chinese can't sell low priced equipment is overdone. Talk of the Chinese spying through using transit equipment is hard to believe. Fairness is in the eye of the beholder but free trade makes sense. Why force the public to pay high prices to provide higher, undeserved profits and to win the so called economic war?
There's more to the trade war than higher prices or subsidies.
The Chinese have made a practice of stealing and using intellectual properties, ignoring internationally agreed upon patent rights. (They are not the only Asian company doing this.)
York1 John
York1 nhrand Talk of how much this country will benefit if the Chinese can't sell low priced equipment is overdone. Talk of the Chinese spying through using transit equipment is hard to believe. Fairness is in the eye of the beholder but free trade makes sense. Why force the public to pay high prices to provide higher, undeserved profits and to win the so called economic war? There's more to the trade war than higher prices or subsidies. The Chinese have made a practice of stealing and using intellectual properties, ignoring internationally agreed upon patent rights. (They are not the only Asian company doing this.)
nhrand Talk of how much this country will benefit if the Chinese can't sell low priced equipment is overdone. Talk of the Chinese spying through using transit equipment is hard to believe. Fairness is in the eye of the beholder but free trade makes sense. Why force the public to pay high prices to provide higher, undeserved profits and to win the so called economic war?
I don't know if that is true or not. But it is something that everyone who has an axe to grind with China says that about China. And everyone with patent thinks everyone else is trying to steal it. The problem with China infringing on your patent is that you cannot take them to court. Most companies manufacturing in China recognize the problem and regard it as a cost of doing business in China. And they deem that cost to be worth the benefits of low cost manufactuing in China.
The US has been out sourcing basic industry and manufacturing to other countries for five decades or more - all in the name of bigger profits and bigger returns to the shareholders - while all the Billionaires laugh at how gullible the general population is in their desires for lower prices. Several decades ago Japan was the boogie man, now it is China. All countries are using every form of industrial espinogue to secure the secrets from the competition - USA, Japan, Germany, China and any other country that is trying to make products.
Never too old to have a happy childhood!
EuclidThe problem with China infringing on your patent is that you cannot take them to court.
Which is exactly why tariffs were proposed.
The United Nations World Intellectual Property Organization does quite a bit of work in this area, and is critical of the Chinese record, but does acknowledge that China is making efforts to curb the thefts since the tariffs were threatened.
And there's this: In 2011, the U.S. International Trade Commission estimated that IP-intensive companies lost $48 billion in 2009 alone because of Chinese infringements. Part of the problem is that China has very light penalties for companies that steal the information.
There is a lot of information about this problem.
https://www.usitc.gov/publications/332/pub4226.pdf
China ripping off USA many years unfair trade and stealing military secrets and do much more. Some companies moving back thank God.
York1 Euclid The problem with China infringing on your patent is that you cannot take them to court. Which is exactly why tariffs were proposed. The United Nations World Intellectual Property Organization does quite a bit of work in this area, and is critical of the Chinese record, but does acknowledge that China is making efforts to curb the thefts since the tariffs were threatened. And there's this: In 2011, the U.S. International Trade Commission estimated that IP-intensive companies lost $48 billion in 2009 alone because of Chinese infringements. Part of the problem is that China has very light penalties for companies that steal the information. There is a lot of information about this problem. https://www.usitc.gov/publications/332/pub4226.pdf
Euclid The problem with China infringing on your patent is that you cannot take them to court.
I don't doubt that it happens, and I agree that the world would be better it did not happen. But I think the damage suffered from this problem is nothing as severe as the damage that these tariffs and trade war are likely to do to our economy, to China's economy, and to the rest of the world economy.
Of course, nobody is worried about that damage because it will arrive as a delayed effect, and that has not yet begun. Also, nobody is worried because Peter Navarro, the architect of this tariff campaign to punish China is telling everyone that our tariffs will only impose economic damage on China and nobody else. That is pure lunacy.
These are not just mild tariffs. They are steep and as extreme as Navarro. When their effect kicks in we could be shocked at the speed and depth of the resulting economic downturn.
Most economically wise people oppose tariffs and protectionism because they always lead to a trade war. Then both sides suffer more pain than would have been the case if no tariffs were imposed. There are no winners. Both sides lose.
Seems to me that it's more than just a little late to be recognizing this problem.
25-30 years ago when we decided the best course of action would be to spend taxpayer money raising bridges, dredging harbors and expanding container ports to "cash in on the wave of the future" just to create a few handfuls of good paying port jobs, anyone with at least half a watt of brainpower should have recognized that we were trading manufacturing jobs for port jobs. Same with the "Heartland corridor" type subsidies given to the railroads.
We spent money making it more profitable to off shore, now we get what we paid for.
Genie is too far out of the bottle for a painless fix.
Near me is a company called Vactor. They're one of the larger sewer vacuum truck makers in the world. We deliver to them now and then with brokerage loads. I asked them why they are still in the states last time I ran into the plant manager he's a neighbor of mine. He went well if we had a plant in China they'd require all our blueprints and patents be given to them before we could even turn a dang screw. Then they'll take the plans reverse engineer them and come out with a product that they'll undercut us in price that's a piece of garbage in quality but they will get the business on price alone. Then they'll throw us out of China and come back to the States and take us on here. He goes that's why my company refuses to sell anything to China. They're wanting to buy from them but the bosses keep slamming the Door in their face.
This is a tough one.
I’m a free market guy from the word go, but we don’t exist in a free market. I believe govt. should be a referee, and not a player. But it’s a player. I hear the frustration of the CEO’s, but if the advantage were theirs, what would be their demeanor?
I think that we and other nations are in a cold war with the People’s Republic of China. A republic it is not.
I don’t like to say that because there is so much I admire about the Chinese.
I now only buy their products when I have no other choice. We have to wake up. Trump woke me up. When they change, I will change.
Not original to me, but the US reached its zenith when men walked on the Moon. Then on, we’ve ceded. China will have superseded us when they walk on the Moon. The dark side of the Moon (Where they’re going).
My 2 cents. One for the postcard, one for the stamp.
I can't help but think the Russians from the old Soviet days are kicking themselves. They tried for over 40 years to dominate the world through military means and might. Destroyed their economy and lost their empire and failed. The Chinese come along, and using capitalism against the capitalists will succeed.
The Chinese remembered what the Russians forgot about what Lenin said. "The capitalists will sell us the rope with which we will hang them."
Jeff
People are overlooking that the 3 US companies quoted are primarily freight car manufactures. There is nothing to be gained by allowing the chinese to take control of US freight car production.
Convicted One Seems to me that it's more than just a little late to be recognizing this problem. 25-30 years ago when we decided the best course of action would be to spend taxpayer money raising bridges, dredging harbors and expanding container ports to "cash in on the wave of the future" just to create a few handfuls of good paying port jobs, anyone with at least half a watt of brainpower should have recognized that we were trading manufacturing jobs for port jobs. Same with the "Heartland corridor" type subsidies given to the railroads. We spent money making it more profitable to off shore, now we get what we paid for. Genie is too far out of the bottle for a painless fix.
It's been recognised as a problem for a long time. Trouble is, the ones recognizing it were those who were powerless to stop it but paid the biggest price for it. Those with power - a few who also were ones calling for action - had and have their reasons not to act and try to change things.
Someone finally tries to do something, and gets villified for it. Not surprising from the business interests who reap the benefit of cheap production costs. What is surprising to me is the other side that always called for action, doesn't really want action. I guess the political benefits of a shrinking working middle class are just to good to pass up.
alphas People are overlooking that the 3 US companies quoted are primarily freight car manufactures. There is nothing to be gained by allowing the chinese to take control of US freight car production.
The cover story in the November TRAINS is "Vanishing Freight". It reports that a new boxcar costs $140,000, interest on a loan to purchase it costs $600 a month but a fully-utilized box car pays its owner only $124 a month. Maybe we should let the Chinese take control of freight car production. Buying a box car seems to be a loosing proposition -- the story reads "building a new box car makes no financial sense".
I haven’t read the TRAINS article yet but; I suspect economics is why you are seeing more and more TTX and GATX boxcars in trains now. In some NS trains; I’m also seeing a respectable number of short line reporting marks. Someone appears to have figured out how to make money soliciting boxcar traffic.
I have no desire to defend Chinese trade practices but I doubt protectionism is the best answer. The interest Congress may have in protecting transit car manufacturing in this country is suspect -- does anyone really think the interest is prompted by public need. Congress might better help the public by supporting public transit rather than raising the cost of new equipment. Bashing the Chinese might gain votes and campaign contributions but doing something about more pressing needs doesn't offer enough payback.
People seek the mythical level playing field. Is the playing field in the transportation arena level ? You can't blame the Chinese for that. And regarding protecting your own turf, I just read that New Jersey has recently spent someting like a $100 million in give-aways to keep businesses from moving to New York. Maybe New York should be applying tariffs to products made in New Jesey to punish them for unfair economic warfare. Economic warfare within the U. S. seems acceptable but if a foreign country plays the same game, watch out.
Juniata Man I haven’t read the TRAINS article yet but; I suspect economics is why you are seeing more and more TTX and GATX boxcars in trains now. In some NS trains; I’m also seeing a respectable number of short line reporting marks. Someone appears to have figured out how to make money soliciting boxcar traffic.
The TRAINS article reports that box car usage can be profitable but warns against the sharp decline of existing box cars and the probability that as a very large amount continue to be retired because of age there will be no finacial incentive to replace them. Earnings are positive but low relative to cost of replacement.
jeffhergert I guess the political benefits of a shrinking working middle class are just to good to pass up. Jeff
Almost 40 years of huge, deficit-accumulating tax cuts for big corporations and the ultra-rich (read: wealth and income transfers and concentration) are the biggest factors to blame in that decline.
jeffhergert Not surprising from the business interests who reap the benefit of cheap production costs. What is surprising to me is the other side that always called for action, doesn't really want action
Well, like I said, it's too late for a "painless" fix, and any truly effective reforms will be derided as "protectionism" by the vested interests who stand to lose the most......so why not a little "carrot vs stick" tax incentive game? They have manipulated taxes for years as a tool to steer policy.....they support the banking and housing industries with generous mortgage interest writeoffs , or look at the number of ways income taxes "reward" families for creating new taxpayers....
If we are really serious about doing something constructive about repatriating jobs, why not give tax disincentives on income for companies that promote job drain, and at the same time offer tax credits that will offset those disincentives to reward companies that support American jobs.
Just think of how thrilled all the "protectionism" naysayers will be after we point out that we are not proposing tariffs of any form.
If this motivates stockholders to jettison their holding in companies that promote job drain, in favor of companies that do not, then I believe the pendulum will start to swing back.
That's all way too crude to ever fly as-is,.... I'll admit. And it would require beaucoup fine tuning to get off the ground. But something along those lines I believe has a greater chance of succeeding than targeted trade sanctions.
There never has been a level international economic playing field. In the post WW II world it was tilted toward the USA as most other countries were in shambles as a reqult of the war. Since then the tilt has changed - for a wide variety of reasons - some controlable and some not.
Balt,
Xi Jinping is in it for world dominance.
Joyous “Re-education camps“ and 200 million plus observation cameras to “help” those who don’t understand.
Free market competition under a capitalist system does not expect someone to step in and level the playing field. Who is going to make a playing field level? Only government regulation can do that. Level playing fields, equal outcomes, and imposed fairness are the stuff of socialism, not capitalism.
These CEOs of rail supply firms cannot face the fact that they were being beaten in a fair competition. The consumer benefits from the lowest price. These U.S. supply firms can’t provide that, but China can. That is the competition of “free trade” at work.
The CEOs of these competition losers cannot admit their failure, so the gin up an excuse that China is cheating and that’s not fair. Trade war, General, Peter Navarro, has amplified this loser grievance into a doctrine that he calls, “The Seven Deadly Sins of China.” And unless China repents, Navarro will destroy them. With this moral crusading lunatic running our trade policy, these competition losers should be celebrating that such an extreme policy is coming to their rescue. Instead they beg for more help from government.
EuclidThe CEOs of these competition losers cannot admit their failure, so the gin up an excuse that China is cheating and that’s not fair.
While global demand for steel dropped, and demand for steel inside China dropped, Chinese steel companies expanded. The expansion was funded by huge infusions of Chinese government money to cover operating losses. This low-priced steel was dumped onto the world market, undercutting North American, South American, and European steel companies, basically driving them out of business.
EuclidThat is the competition of “free trade” at work.
Fair?
We are allowing a communist government aiming for world domination to drive our steel industry into the ground. Someday, our military might need that steel to defend ourselves and we are at the mercy of an enemy.
Blame this all on Navarro? This was going on during President Obama's term, also. We were already raising duties on Chinese steel then.
https://www.cnbc.com/2016/05/20/china-steel-overcapacity-war.html
All this has trickled down to ground level. Bleak times ahead. Industry already has an alarming number of condrs OIFR (over 100 @ Amaril). Bleeding into othe crafts as well. BNSF has announced that at least 625 engs going in storage and the projections for upcoming peak season could be lowest since 2008. That, of course, could swing and go the other way. This from a company that about six yrs ago projected a huge increase in coal shipping which in turn created about 600(?) condrs being hired and only for the coal not to return and the workers hired were not needed either
And how many countries has China invaded since action in Korea? Maybe one, if you count a border skirmish with Vietnam (both communist nations). On the other hand, how many countries have we invaded, occupied, bombed, etc.? I lost count but more than a few.
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