Discussion U.S. Raising Tariffs for China-Made Electronics to 25%

nicholas70

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Glad someone finally decided to stand up to China to at least some extent. The truth is they have been shafting this country for years, and the rest of the west for that matter. Hell they even shafted Russia by ripping off some of their weapon designs and producing cheap domestic knockoffs. If it was up to me we would also stop allowing them to send their folks over here to get educated only to then turn around and go home and compete against us. Not to mention a number of Chinese students here have been known to be involved in the theft of trade secrets.
 
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This being Tom's Hardware, how soon do you think the 25% tariffs will affect consumer prices on parts? I want to build a computer soon but would rather not pay 25% more.
 
So in order to gain access to the Chinese market, we are forced to give up our know-how, and hacking we seem to not take seriously. Now China produces EVERYTHING and we complaint. Short term benefit, long term damage.
 

nicholas70

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Some of the tariffs cost will be passed on to consumers, but the idea here is to make producing products domestically more appealing. So in the long run if some products impacted by tariffs are produced in the states and not overseas anymore this will effectively tighten the labor market putting pressure on wages to increase. As I said before though the real elephant in the room is higher education in this country educating foreigners who intend to take their education to their home countries and compete against us. This also of course drives up costs for citizens who want to go to school here because well you know supply and demand.
 
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No. Corporations won't raise wages because if this. They will do exactly what they did with the tax cuts, buy back company stock, and buy another boat. Maybe I should start building yachts so that the money will trickle down to me.
 

nicholas70

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I think it is too early to tell if an increase in domestic production of consumer products will subsequently lead to increased wages. It took over 20 years for us to get into the trade mess we are in and it will take more then 4 to get out of it. I do agree though that stock buy backs are a problem which diverts resources from productive investment and I can only hope that at some point it is an issue that will be addressed. I also forgot to point out that the increased costs associated with the tariffs should help bump up inflation which, if you believe modern text book economics and the fed, is a good thing. I will point out I don't think it is a good thing, but just figured it is something worth pointing out in light of the Fed bemoaning stubbornly low inflation.
 
Who is old enough would remember that Japan and Korea went thru same path, remember "Made like Japanese toy?", and look at them now. Few years ago some US general said that USA can't ever go to war against Japan because no US planes could work without Japanese electronic parts.
 

nicholas70

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I don't remember Japan or Korea having such an aggressive foreign policy that China has. China has basically said they intend to become a global super power and are taking actions to achieve that goal at the expense of US interests. True they face some possible demographic problems in the medium to long term, but then again so do many other nations of the world. It is also true they could run into economic problems like Japan did, but as far as economics go they don't look to be in bad shape when compared to some countries in the west atm. I'm not sure what's going to happen when we face our next overdue economic downturn here, and I'm not sure our creditors would accept the massive spending stimulus that helped get us out of previous downturns. This also being a major problem throughout the western world thanks to retirement and pension systems which were never really reformed to reflect the realities of the largely post industrial economic era.
 
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Ugh ok so this is one annoying example of the steel tarrif. My washing machine is on it's way out because the motor bearings are going bad, making a nasty whine. I am hoping it lasts until next pay day, but I starting window shopping today and it's pretty bleak. Prices on these appliances are up about 50-75% higher than about 5 years ago due to the steel tarrifs. Being an ex-steel worker I know Canada and Mexico were killing us on steel, but damn, I already made a very high wage and it wasn't like they were losing money at the plant. They also didn't raise wages at the plant post-tarrif. Why should all of us consumers eat these price hikes imposed by protective tarrifs? The washing machines certainly didn't get 50-75% higher quality from switching to local US steel!
 

nicholas70

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Don't think anyone here said they were feeling optimistic. I merely pointed out how tariffs can encourage more domestic production ultimately leading to a greater demand for labor, more jobs and ultimately higher wages. I expect that if left in effect these things will eventually happen assuming we don't enter a recession in the near term. I also find it a bit hard to believe that a 25% tariff on steel would result in 50-75% higher costs on the end product. Not saying these products aren't that much more expensive, but that factors other then the tariffs are likely at play. I also feel the pain of the tariffs as I had to buy a new refrigerator less then a year ago, and will need to buy a new clothes dryer here in the coming weeks. Needless to say I'll feel some of the sting of those higher prices, but it's something I'm willing to endure if it means there's at least a decent chance we will restore at least some of our lost manufacturing jobs and not get shafted in a trade agreements with other countries.

Now if it was up to me I'd just assume do what many other countries have done which is use a VAT to cheat at trade instead of tarrifs given the income tax system we have in this country is a mess. Sadly, I don't think that's going to happen, but at least we aren't stuck with the status quo we had for over 20 years that hollowed out manufacturing and part of the American middle class with it. Don't get me wrong, I'm not saying the tariffs will work, but at least someone is finally trying to address the fact we were getting screwed.
 
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bmacsys

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This will be passed directly onto consumers who certainly haven't seen meaningful wage increases in decades. So much for small government not meddling in my life.

Not really. Most of the earlier tariffs were eaten by the Chinese manufacturers. I disagree with Trump on a lot of things but he is doing the right thing here. The Chinese, lie, steal, cheat, manipulate their currency, practice "dumping", steal intellectual property, have forced intellectual property "transfers" and the government subsidizes businesses which in reality are just an arm of the Communist party.
 

bmacsys

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Don't think anyone here said they were feeling optimistic. I merely pointed out how tariffs can encourage more domestic production ultimately leading to a greater demand for labor, more jobs and ultimately higher wages. I expect that if left in effect these things will eventually happen assuming we don't enter a recession in the near term. I also find it a bit hard to believe that a 25% tariff on steel would result in 50-75% higher costs on the end product. Not saying these products aren't that much more expensive, but that factors other then the tariffs are likely at play. I also feel the pain of the tariffs as I had to buy a new refrigerator less then a year ago, and will need to buy a new clothes dryer here in the coming weeks. Needless to say I'll feel some of the sting of those higher prices, but it's something I'm willing to endure if it means there's at least a decent chance we will restore at least some of our lost manufacturing jobs and not get shafted in a trade agreements with other countries.

Now if it was up to me I'd just assume do what many other countries have done which is use a VAT to cheat at trade instead of tarrifs given the income tax system we have in this country is a mess. Sadly, I don't think that's going to happen, but at least we aren't stuck with the status quo we had for over 20 years that hollowed out manufacturing and part of the American middle class with it. Don't get me wrong, I'm not saying the tariffs will work, but at least someone is finally trying to address the fact we were getting screwed.

When the tariffs start to bite the Chinese will be ready with some serious concessions.
 

nicholas70

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I wouldn't count on China making any serious concessions in this trade war unless we get a bunch of other countries to join in on the effort, and as much as I like some of the stuff Trump has done, we aren't likely to get many countries to join us in a trade war against China with Trump at the helm. The truth is China has the edge in this trade fight for a number of reasons and they know it. The biggest edge they have is they know that for the most part tariffs are unpopular among the majority of the political class and policy elites in this country, and so will likely wager they can just ride out the trade war until the next election. Even if Trump is re-elected China is playing the long game and knows that time is on its side.
 
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If you had to choose between two washing machines, one foreign-made and one made in the U.S., at the same price, but the foreign-made one had more reviews and 4.5 stars out of 5 vs. the U.S. one with less reviews, 3 stars, and broke down more often, which one would you buy? Next, what if the foreign-made one cost 20% more?
 

Karadjgne

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Too many what-ifs.

For that foreign washing machine to cost 20% more, it'd have a seriously larger selection of bells and whistles.

Most Americans enjoy a certain standard of living. To get that, they need to be paid decent. To get that, products need to be sold at a profit large enough to keep them employed. Which is why many companies outsource products, like cars and trucks, to Mexico and Canada. Even with shipping, the profit is somewhat larger per item than can be manufactured in the US.

The Chinese are not stupid ppl, not with internal competition so cut-throat. They'll take a 10% loss on profit per item to outsource final shipping from Korea and claim 'its Korean, so no 25% tax on me!' Trump won't be able to stand on that, and then turn around and promote all those American made Ford cars and trucks.

There is no easy answer, all I can say is at least he's trying something, not just sitting back and maintaining the status quo. Whether it works out or not won't be seen tomorrow, it'll be something the next President will have to deal with
 
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