News Trump Delays Tech Tariffs to August 2020

Tariffs on again off again. 10%, 50%, 20%...We appear schizophrenic with all these changes. This plays havoc with businesses including US ones even if they source 100% from the USA.

I would prefer we keep the tariffs to level the playing field. But this on again and off again BS is just no good all around for stocks, companies pricing, US workers, or our perception around the globe.

Every few weeks we have to adjust prices on thousands of parts that comprise our products, even though we source 100% from the USA. It creates a lot of stress and uncertainty.
 

ssdpro

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So will prices come down? Or were these temporarily put in place to raise prices, adjust the market, and now the margin for the mfg will just be higher? I mean seriously, a 2070 for 499? 5700 for $369?
 

blppt

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I would prefer we keep the tariffs to level the playing field. But this on again and off again BS is just no good all around for stocks, companies pricing, US workers, or our perception around the globe.
The problem is that you don't realize that Trump doesn't really care about "leveling the playing" field---or if he does, it is far less important to him than looking good.

Since China has yet to cave on his tariff threat (as expected by most people not named Trump), the fiscal hurt on this country keeping these tariffs all up will likely cause his rich and blue-collar supporters to turn on him. Not to mention the hurt extended to his OWN businesses.

The President has that pesky 2020 election to worry about after all--and since Trump runs on his delusion of being a "great businessman", it would not look good to have the economy stagnant or in recession by next fall.

Trump is always about Trump. You can apply this to anything he ever does. Watch whenever we have a couple of days of bad Dow performance---Trump will either himself or one of his administration say they expect a deal with China to be 'imminent' or 'looking good'---and Wall Street falls for it over and over again.
 

jasonelmore

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If Trump really wanted to hurt China, he'd put capital outflow restrictions on any funding going to China. (from America only) China does this to its citizens, preventing its rich billionaires from investing in America, or from moving their money out of the country in general. Most of the major hedge fund management groups in America are funding China's economic growth. In other words, it's the American capitalist that are weakening national security by investing in the Chinese tech sector instead of the US. (because they can get better returns)
 

bit_user

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If Trump really wanted to hurt China, he'd put capital outflow restrictions on any funding going to China. (from America only) China does this to its citizens, preventing its rich billionaires from investing in America, or from moving their money out of the country in general.
I heard the US is actually working on restrictions to limit inward investments from China, to match restrictions they currently place on US investors wanting to invest in China.


Most of the major hedge fund management groups in America are funding China's economic growth.
Maybe 10-20 years ago, but not any more. And a lot of those early investors got burned.

Chinese business law is very different than in western countries - for instance, you could own a controlling stake and still have no say in corporate governance if you didn't have the company's official stamp. It's things like that which a lot of outside investors didn't know.

By now, I'm sure big investors have learned to navigate the Chinese system, but China is also much more careful about ceding control or profits to outsiders and doesn't really even need outside investment, anyway.
 

bit_user

Splendid
Ambassador
Thanks for posting.

The closing paragraph is most telling:
Inward FDI recovered to an estimated US$234 billion in 2018, 34 per cent higher than 2016, bringing net FDI back to US$123 billion, close to the average level in 2006-07, Xing said.
So, you see that they did clamp down on FDI, as it's only now returning to the 2006-2007 levels.

They also caution against reading too much into these monthly numbers:
Frances Cheung ,... warned market observers should wait until first quarter FDI is released in mid-April to obtain a clearer reading of underlying trends because monthly figures can be volatile due to “one-off, big ticket items”.
So, when they say the US-based investment is up
So, if US-based investment is currently relatively low, then a large % increase for one month (which might be heavily-skewed by one-time purchase, etc.) does not necessarily contradict what I said.

AFAICT, the article doesn't list any numbers that reflect what the total US-based investment is. I'd suggest finding those numbers, for multiple quarters or an entire fiscal year.

BTW, you should also keep in mind that there's a lot of money sloshing around that's looking for returns wherever they can be found. You'll probably find a lot of money going into other developing countries, as well, mostly because those are where the opportunities and bigger growth reside.
 

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