Wires, chips, and LEDs: US trade bigwigs detail Chinese kit that's going to cost a lot more The Trump administration is moving forward with its plans to implement tariffs on Chinese goods coming into America. On Friday, it published a list of products totaling $34bn that will be subjected to a 25 per cent charge to importers, and another $16bn worth of goods that could be added to the list. The US Trade …
"individually shielded optical wireless cables"
For optimum digital audio video clarity, the shielding should be 24carat gold plated and the wireless cables oxygen free. They cost an arm and a leg already without these tariffs. It's a good thing I don't have any children, else they'll have to go without essentials as I am saving up for a set of these
>> "individually shielded optical wireless cables"
> Could you fit any more oxymorons into a single phrase?
Optical cables do not use wire, they use glass fibres, therefore 'wireless'.
Of course optical cable could also have [metal] wires included, for example: to carry power*, but they wouldn't be 'wireless'.
* a wire could be added simply to defeat the tariff.
You actually couldn't add a wire to defeat the tariff. It's quite a comprehensive list.
Incidentally, did anyone actually see "individually shielded optical wireless cables" in either list? I didn't. The lists are timestamped 12 hours before this article was posted. I guess you've all been trolled.
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Perhaps the third one is that you can't run trade surpluses if you are the global reserve currency.
That would be my biggest overall concern for the US. These isolationist practices have long term consequences that go deeper than "I only read comic books' Trump can fathom, the most important one being that it teaches trade partners that they're not partners and can no longer trust the US not to screw them over for a quick buck.
Trump seems to forget that the money supply isn't endless when you start to borrow, and at some point the interest is due (something that Jared will be facing in September for 666 Fifth Avenue, which will be entertaining IMHO). By isolating the US in many ways, he encourages other nations to remove their dependency on the US economy, which in turns removes the "too big to fail" leverage the US has over others to force a continuation of its horrific borrowing. China has been playing the long game for decades, and they now have their currency up as reserve currency too, and they have already been doing a Saddam in that they have traded energy without involving the dollar (they bought gas from Russia in renminbi).
The whole house of cards will collapse if they go on like this, and none of the idiots surrounding Trump seems to know or care.
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We're also making electronics (music gear). These tariffs will impact our components, circuit boards assembled in China, and Chinese-made assembly equipment. Judging by the tariff list, I think every major manufacturing industry is similarly affected.
That's not as bad as it sounds. A 25% tariff on dirt-cheap components is still cheap. Our more expensive components come from Taiwan and other countries anyway. I wish we could get more US-made components. US assembly, at least, is an option, which we're considering due to overseas shipping costs and hassles. We may have to increase prices a tad, but so will our competitors, and all the jobs coming back to the US will help our customers absorb the increase.
I worry more about the effect on China. The tariffs will put downward pressure on their prices, contrary to our interests. The disparity could spiral out of control unless their government does something (which they may not want to) to counteract it. But as others have said, this action is long overdue. Whatever the consequences, I blame the Chinese, and the past three US administrations for their inaction.
"Putting all your eggs in one basket is a bad idea - so, moving functions such as fabrication plants, steel production, etc., back to your own country will mitigate the risk."
That might be what governments want to do, but in practice what happens is that businesses move their outsourced manufacturing to the next cheap labour market rather than bring them "home" where cost will rise too much in the longer term, even if there are short term incentives.
but in practice what happens is that businesses move their outsourced manufacturing to the next cheap labour market rather than bring them "home"
From what I recall, the PRC were eager to move the lower-class manufacturing jobs to various stable African states for that very reason; only the Global War Of Terror aka the Gumbo War of Terror destabilized a good many of those previously stable African states and now they can't.
It's beginning to look a lot like ... well, this is a first! Words fail me.
Or perhaps they've invested bigly in China?
After all, who wouldn't want their stuff to sell for even more after they've still manufactured it for less than in the U.S.? *
* The Chinese aren't stupid and won't make their stuff so expensive that it isn't still cheaper to get it manufactured there - it just won't be as cheap as before.
This is part of the Trump/Bannon/Putin agenda. I don't know if OPOTUS really understands the ramifications of his actions, but the other two certainly do.
I hate to appear to agree with Trump and his cohort in any way but, the developed economies do need to adjust trade deficiencies with the developing economies caused by the intense greed of the wealthy in the moving of jobs (factories) overseas. That should be a better planned objective. Developed nations should be trading with nations that have similar wages, healthcare, and vacation time for the employees. A side effect of that would be that few would be able to trade with the US because of the direction that it is moving.
As to IP theft by foreign Governments when production of high tech. products is moved overseas; especially, to underdeveloped economies. Did anyone really expect that to be otherwise? I've always found this to be amusing.
We live in interesting times.
Perhaps the third one is that you can't run trade surpluses if you are the global reserve currency.
On the other hand, you can run trade deficits almost indefinitely - until people find a different reserve currency. The US government should study history a bit more, and they might see some parallels in how the dollar supplanted the pound as the global reserve.
Then they need to additionally consider that although there's an assumption that there has to be a single alternative (and thus that unless there's a better candidate, the existing reserve remains strong) with the evolution of technology that may not hold true. Which really ought to worry the US government.
"The most famous is don't fight a land war in Asia"
That's the second :) first is "don't march on Moscow"
Although "don't fight a trade war with Asia" is a pretty good modern take :)
As mentioned elsewhere, does anyone know how you can have both the world reserve currency and maintain a trade surplus at the same time?
My company resold $750 million of products manufactured in the US last year. Already, these products are at a high premium compared to French and Chinese products. They are a tough sell and it’s almost entirely based on price.
Those items are built mostly from steal, chips, LEDs and wires.
Unless those US companies move their manufacturing outside of the US, we’ll be forced to switch vendors, otherwise the price hikes will be a problem for us. I know that the exported products will have refunds on the duties leaving the US, but the vendors cannot legally charge foreigners less than they charge Americans for these products. So, we’ll have to feel the penalty.
So, I expect to see an email from leadership this coming week telling us to propose alternatives to American products.
"Next week he will probably leave NATO"
That was actually the biggest WTF moment for me at the G7. The Russia stuff has some basis in realpolitik, since they are a world power, so ignoring them doesn't make their nukes and armed forces go away.
But when the US president says "I don't see the point in NATO" and "why would we defend another NATO member" to the heads of the state of other nations it indicates that either he really has no fucking idea of how the world works (which is pretty scary) or that he genuinely believes that the US interests are not served by promoting freedom and democracy or supporting like minded allies.
"why would we defend another NATO member" .....
It really means "why would we defend another NATO member, that isn't spending any money on defense, and is just expecting the benefit of NATO membership without the cost. "
To put that in context, according to the German news outlet Spiegel, all but four of Germany's 128 Eurofighter Typhoon fighter jets are unavailable for combat missions.
The statement is basically a warning that countries which don't spend the Nato required minimum on defence could find themselves effectively no longer part of the club.
The statement is basically a warning that countries which don't spend the Nato required minimum on defence could find themselves effectively no longer part of the club.
Or following what happened to Ukraine they could decide that it's much cheaper to just build nukes.
Japan and Korea obviously need them to protect against N. Korea if the USA is no longer going to be a player in the area. Japan has lots of plutonium producing reactors, if only they had the advanced machining technology, supercomputer simulation and lots of nuclear physicists. ditto S. Korea, ditto Germany.
That shouldn't worry China or Russia.
Of course with Samsung, Toshiba and Seimens all mass producing low cost high quality nukes there will soon be a market for all Nato countries to buy them for a fraction of the 2% of GDP the USA wants them to spend on F35s
or that he genuinely believes that the US interests are not served by promoting freedom and democracy or supporting like minded allies.
"Promoting freedom and democracy" - as in Vietnam, Iraq, Afghanistan, Libya, Syria, Palestine...? That was just newspeak bullshit.
The point of NATO is to sell more F-35's.
Trumps tantrum in response to the Canadian Prime Minister saying he would look after Canadians and there interest show him for the bully he is (I do not think the explanation for Kim's benefit are true). The warning of an extra $16 billions in tarifs of as Trump sees it, they (the Chinese) stand up for themselves smacks of a bully saying stop hitting yourself as they grab your fists and start hitting you. What is galling is that Trump is right on IP theft, protectionist barriers and such, I just wish that he was equal to the task.
Yeah, remind me... Didn't my iPad Mini say on the back or the box something like: Proudly designed in California. Made in China ?
There's your problem right there.
It's really hard to have any sympathy with Trump's point of view when you realise that it would have been pretty easy to have American stuff made in America and the IP would never have to have left the country (and would have to have been actually stolen), but no, the shareholders wanted more money and the management never gave a shit about such things as employee rights and child workers, so all this important IP was willingly dumped in the hands of the Chinese in return for making stuff at Chinese prices (to be sold at American prices, kerching!).
And now the guy in charge is crying?
Actually however much I dislike trump... this is actually well overdue
The state owns the companies in china and refuse to allow access to the Chinese domestic market without at least 50% share in a "joint venture" which makes the profits.
Alternatively Chinese take over companies then shift manufacture to their home (fair enough), whats unfair is they deploy capital lent from the state at 0% interest rate to do this.
since there is a trade imbalance then actually I don't see what the Chinese are going to do...
target farmers it seems... which quite frankly is simple to counter, like the EU you give the farmers subsidies...
https://qz.com/1242652/china-tariffs-the-complete-list-of-128-affected-good-class-of-goods/
this is not a bad thing as long as the U.S.A. does a good job protecting ALL its markets...
Trump's accusations might be more credible if the sanctions operated less of a scattergun approach.
China? Well also the rest of the world. EU, Canada, and Mexico lumped together: do we really all do those Evil Things? Trump must be the only one marching in step.
Mind you, the rest of the world does itself no favours by failing to work together on this. EU/Canada/Mexico lumped together because they thought they could be exempted as Good Guys.
Divided we fall.
Speaking facetiously, as is my wont, I get the feeling that the US is running scared. This is a list of areas where they can't compete with the PRC on the open market, so they run and dig themselves a little hole and plonk their head in it.
It's also a milestone, informing the PRC that they've succeeded in spooking the US. And so the US isn't going to compete any longer. Pity that. I like a good competition.
It is not even the beginning of the end. but it is, perhaps, the end of the beginning
Well, the current goal is mid-term elections. Give his voters as much Feelgood as possible ahead of them, readjust afterwards. The Great Success with Kim Jong Trump was probably the biggest such stunt.
If any of this nonsense goes on longer than that, the world has a much more serious problem.
Here is the thing - China is, by far, the largest buyer of American debt. The interest of which is tightly coupled to price, which can be manipulated by someone with a sufficiently large long position - like China for example. If things go much further, Chinese could imaginably ruin American economy by flooding the interest rates market with Treasury notes, which would push the yields up. It would cost them an arm and leg, but who knows - for a centrally managed economy it might be just doable, especially if aimed only at the weeks where the impact would be the biggest i.e. re-issuance of more Treasury debt. With the interest rates adjusted to match the inflated yields.
"Chinese could imaginably ruin American economy by flooding the interest rates market with Treasury notes, which would push the yields up. It would cost them an arm and leg"
And America could simply say devalue the US Dollar by a factor of ten making that that debt worth much less.
The trade situation is complicated.
What isn't complicated is the selection of goods that are subject to a tariff. It reads like a gift list for the politically powerful and savvy. "Sentator, remember that campaign contribution? Here is the list of very specific items we would like on the tariff schedule."
Strange definition of steal. Jobs and Cook (for instance) did not exactly watch as their iPhone manufacturing was taken from them and moved to China. No, they enthusiastically got Pegatron and Foxconn to take over the manufacturing, because cheaper.
If there was a theft of US jobs, whatever that means, it was carried out by US capitalists.
China took American jobs and industry, our source of wealth. How is that not theft?
Sure, Steve Jobs took advantage, but he didn't force China to disregard human rights and the environment in order to corner the global market. And it's amusing to see the same people who condemned those actions siding with China now. China sure as hell doesn't give a damn about you.
Western populations have given this to China. Since the late 70s marketing based on price and maximizing shareholder profits became the only game in town.
Stop buying stuff made in China and corporations will soon learn what their customer base values.
> "Sentator, remember that campaign contribution? Here is the list of very specific items we would like on the tariff schedule."
"""Hilton pointed out on his show, "The Next Revolution," that Ross (Wilbur Ross, Commerce Secretary) co-founded a shipping firm, Nautical Bulk Holdings, that ships steel from South Korea, which is one of the countries that has received an exemption from President Trump’s steel tariffs."""
http://thehill.com/homenews/media/391646-fox-news-host-calls-out-wilbur-ross-over-conflicts-of-interest-on-investments
It is all about corruption. Trump is merely the most corrupt.
The US is the biggest hypocrite on this subject.
They steal any technology they can get away with, hide subsidies for favoured industries/companies and, just like now,
During the Reagan era there was COCOM, a coordinating committee on technology export with the idea of making it difficult for foreign manufacturers to get certain parts thus protecting US manufacturers of high tech products.
Except, as usual, someone got clever. I designed a product using 4000 series CMOS and there was a standard shift register and suddenly I couldn't buy the RCA part without filling in piles of forms. Solution - buy the same Toshiba part.
This also meant a number of US equipment manufacturers had problems exporting because straightforward products used COCOM controlled parts.
You should be still able to get a copy of Eduardo Galleano's The Open Veins of Latin America, which contains some interesting historical details about how the US (and before that the UK) destroyed Latin American attempts to set up their own manufacturing sectors.
Very enlightening. Apparently human rights don't apply to Latin America, as far as the US sees it.
Lithium, tantalum and several rare earths are mostly bought from China, iirc.
China cheats. It is destroying UK manufacturing at a rate of knots, as Chinese factories get cheaper electric, and the postage is massively subsidised which is why everything gets free postage, and then, bizarrely, nothing from China gets stopped for taxes and duty!
China cheats. It is destroying UK manufacturing at a rate of knots
Have you thought of joining some sort of unified trading block with some of your other European allies?
Then you could present a single market to China and get much better trade protection and negotiating power.
Just a thought
China does not have a monopoly on rare earths - at least not an EXPLOITABLE monopoly as they discovered a few years ago when they tried to push the prices up. Suddenly all the mothballed Australian mines were now worth starting up again and miraculously* the price fell again!
This was explained in some of the most informative sets of articles Tim Worstell wrote for EL Reg back in the day.
* the miraculous law of supply and demand
TFA talks at length about
> a list of products totaling $34bn
and I'm sure that thirty-four thousand million USD1 is a headline-grabbing amount of money, but it's not clear to me what the number refers to. I speculated that buying 1 unit of everything on the list FOB Shanghai might total to $34E9, but that doesn't seem possible. Does the USA import $34 billion dollars-worth of products on this list over some unspecified time period? If so is it the amount paid to China, or the value of the goods sold and used in the USA?
25% of $34E9 is $8.5E9. Has the US Treasury shared with the US electorate exactly (or even vaguely) what it will do with this extra income?
Perhaps some of it will need to be invested in anti-smuggling operations: some of the list items are clearly high value in units of $/kg, and 25% tariffs are worth avoiding.
1I suppose that they mean USD and not HKD!
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