Semiconductor Market Caught In Middle of US-China Trade War

Status
Not open for further replies.
So far the stock market doesn't seem to care about the Tariffs. Once the back pressure from all the companies using the tax code savings to do buybacks stops I have a feeling we will see a huge downward trend. Those buybacks are putting a floor on the market but that will eventually stop and when it does it's going to hurt. I meaniton all of that because until the market gets nailed Trump isn't going to budge.
 

venym

Honorable
Feb 5, 2014
14
0
10,510
0
FYI - This trade war has been going on for years, Trump is just the first President to fight back. Is it fair that goods we send to China are subject to tariffs, however those they send here are not? This only promotes US companies to build plants in China to produce goods; creating jobs in China, not the US.
 


Your Trump is the first one statement and there has always been a trade war are contradictory statements and you know it. There has been no trade war until now.

We have used China for cheap goods and as a dumping ground for spent electronics for decades now. They have used the US to take manufacturing jobs away and to steal intellectual property. The manufacturing is not coming back until the average household incomes in the US and China are remotely close which is not happening anytime soon(so goods from said manufacturing is close in cost). The jobs that are being lost now are knowledge jobs like IT, that really should be the focus not the contrived Trade war that the US has no hope of winning.

We import $478 billion vs exporting $115 billion to China. Every percent China taxes via tariffs on exports is over 4 to 1 to the US due to this discrepancy, that is if they do across the board tariffs. A compromise is needed or China will down our economy and since the Chinese economy is a command economy they will be just fine as the trade war continues. We are three decade late to this war and since we sent a vast majority of our manufacturing to China over those years really need to think twice.
 


Yeah :( I get this feeling my 1070 is going to be longest lasting GPU ever and that is going back 20 years.
 

stdragon

Commendable
Apr 5, 2018
1,551
4
1,660
196


The insourcing (H1B, H2Bs) and outsourcing of labor has eviscerated the middle-class, BY DESIGN. In fact, throughout all of human history, the mere concept of a "middle-class" is new. For the rest of the world, it's a have/have-not society. A near feudal system, and America is headed towards a neo-feudal (globalists) system as well. What better way to control the populous than to have people vote for you out of fear of "benefits" being taken away than out of feeling empowered to control said government?

The End-Game in this is China devaluing the Yuan in order to keep jobs in China. The last thing the CCP wants is civil unrest from massive unemployment. So, most likely, the devaluation of the Yuan will be countered by the tariffs China imposes on the US. Meaning, a near draw.

My personal theory is that Trump is engaging China like Reagan did to collapse the Soviet Union - via causing their economies to implode. It's a factual statement to say the US economy is in a far better shape than China's. It's well known they've cooked the books for a very long time now, and their debt to GDP ratio is "very bad".
 
Aug 1, 2018
11
0
10
0


Actually, no... It has benefited both the US and China greatly. China has gotten the capital to build an industry and associated infrastructure, whereas the US has gotten cheap tech, enabling her to focus on more fruitful endeavors.

Exports aren't inherently good and imports aren't inherently bad.

That's not to say the US doesn't have it's problems, but to focus on the US-China trade relationship is counterproductive.
 

mlee 2500

Honorable
Oct 20, 2014
298
6
10,785
0
I'm not sure how I feel about paying more for electronics just because slave labor or environmental exploitation wasn't involved in its creation.
 
Aug 1, 2018
11
0
10
0



China has it's problems, but they are more related to political economy than state finances as such. Their state finances are actually great, when you look at all factors. The actual problems they have are related to the fact that their middle class has grown rapidly.

And while US is still a very important economy, the world is different today than it was during the Reagan years. I fear entering a trade war like this will weaken the US and strengthen China.
 

stdragon

Commendable
Apr 5, 2018
1,551
4
1,660
196


The Chinese economic reform of 1978 was lead by reformist Deng Xiaoping. It was the first major liberalization from its prior command and control Communist ideology. It paid off in spades!

The new president is a Maoist, and in fact limitations on how long he can remain in office has been lifted. Practically, a dictator by any other definition.

Their economy is not that solid as you might think. They've got major corruption based issues, as do all authoritarian nations have relative to the degree found in Western democracies. If you want an example of wasteful spending, look up Chinese Ghost Cities.

A trade war won't strengthen China. It will bruise America while breaking China. Command and control based authoritarian regimes seem like a good idea, so polished, smooth, well organized and ran. But, it's also extremely fragile to external events. Chaos is the enemy of autocratic regimes. The US economy by contrast, for all its problems, is well forged and prepared to weather practically any economic storm.
 

therickmu25

Honorable
Aug 7, 2013
44
0
10,540
1
I completely understand forecasting possible outcomes but I think it's foolish to come to any conclusions or stir up fear until we see how this plays out. Us threatening the EU just a few weeks ago was supposed to be the end of our economy as we know it and now we've agreed to work to zero tariffs.

It's shocking now since we've been trained to bend over backwards to whatever the rest of the world expected we give them for the last 16 years, but this is nothing more than a standard ongoing business negotiation, made by a businessman.
 

AlistairAB

Honorable
May 21, 2014
227
59
10,760
0
HUGE PROBLEM WITH THIS ARTICLE: No discussion about Taiwan? You know, where the "chinese" products people really want come from?

Is Taiwan affected by the tariffs? This article doesn't say anything useful at all. Is Asus or TSMC affected?
 
"However, many companies rely on the low cost of Chinese labor to manage their supply chains, so it's reasonable to expect tariffs to cut into those margins."

And therein is the major problem. Companies have exploited cheap chinese labor for decades and the U.S. has been hemorrhaging some of our best jobs. If china doesn't want their economy to collapse, they will need to play ball. Companies will go wherever they can make the greatest profit, so leaving china for anywhere else is just a matter of time. Will the jobs necessarily come back here, we don't know. It depends on where the best profit lies, which is increasingly turning against china. China's GDP for the last quarter is already being affected, as was ours, except ours we up.

And yes, we have been in a trade war for decades, it's just the U.S. never fought back and was in a steady economic decline, until the crash in 2008, led by the housing market.
 


LOL, you pay more because of taxes, like VAT. You have to pay for your socialism somehow...though it's drowning you.
 

TheOtherOne

Distinguished
Oct 19, 2013
72
7
18,535
0


You really have no clue how much price difference is between American market and Australian for the SAME products even when you account for 10% GST. As I said, people there will finally start to understand there's more to this than just "taxes" which I am pretty sure are part of American market too.
 
Aug 8, 2018
1
0
10
0
It wouldn't have been caught in any battle if we didn't give it over to the Chinese to begin with. Now we have to fight to bring back what we invented and labored for which was given away for free. Talk about the worst US deal in history!!
 
Sounds like a good argument to invest heavily in GlobalFoundries. Lets not forget about Wisconsin’s Foxconn facility so we can produce these. There is method to Trumps waiting year an half in to start the tariffs. There is also the Intel Factory in Arizona slated to be the most advanced in the world. Not everything is rosy but there are work around under way.
 
Jul 29, 2018
6
0
10
0
Tariff's are just taxes that will be paid for by ordinary Americans. Just another money grab from people like you.

The cheap crap you buy from Walmart will never be made cheap enough in the US to be competitive. Even with a 50% Tariff/Tax. Trump and the Republicans just want your money to make themselves and there corporate mates richer.

All you Trump supporters are living in la la land.
 


Wow, do you need an economics class...

Know what happens when companies raise prices to recoup the cost of tariffs? Sales drop, meaning production and profit drops. It then gets to a point where production might be a little cheaper, but the shipping costs + tariffs make it a bad deal to produce things in china. When demand drops and production outstrips demand, factories close and china loses thousands of jobs. Yes, we will pay a little extra, but it will be short term, china can not handle a prolonged fight.

Trump is trying to force china to come to the negotiating table to balance out the trade inequities and undo the damage incompetent politicians have done over the years. Why people that have never held real jobs in their lives were permitted to make trade deals I will never understand.

We finally got a real person in the White House, not another politician. The businessman is taking care of business.
 


You are way more optimistic than I am, I hope things go as you believe they will. I just got this bad feeling playing chicken with the economy against China is going to to end up crashing the market not unlike 2008.
 

kenjitamura

Distinguished
Jan 3, 2012
195
3
18,695
1

I'm not sure where your optimism that we can outlast China in a trade war comes from. For starters the United States is not the only foreign entity that does business in China; pretty much the entire rest of the world does as well.

They also don't have to worry about the negative political climate so the politicians there most likely won't reverse course. Over here in the US we vote people in and out of our most powerful legislative body every two years and the representation of politicians is completely at the mercy of whatever the mood at the time happens to be.


I don't think politicians caused this problem; the businessmen opted for themselves to invest in China's economy to reap larger profits. You can make the argument that the government should have had more regulations in place all you want but to accuse them of having caused a problem by businesses taking action in the absence of these regulations is to lay the blame at the feet of the wrong people.
 
Status
Not open for further replies.

ASK THE COMMUNITY