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Topic: China tariff hikes from 10% to 25%
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IgorFrankensteen's photo

IgorFrankensteen

Sun 05/19/19 08:43 AM



I think China will win this trade 'war' because their leader, unlike Trump, does not have to stand again for election. All they have to do is wait for the next US government which will, of course, be democrat, who will no doubt have different policies on trade.


PBS Frontline did a show "Trumps trade war" the other day if anyone has interest in nonbias reporting. Their thought is China is looking to be a world super power like the USA, and like USSR or Russia used to be and if the "trade war" continues it will turn into a "cold war" that could last for years. Yes tariffs hurt the US economy and bussiness's short term, but long term it could possible lower the US debt by keeping more money inside the US and if tariffs are used to pay down debt (highly unlikely) it would do good for both the US and China. Another thing people don't look at is the tariff is on wholesale price, not retail. So lets say there is a 25% tariff on a washing machine. That is 25% that the seller pays on the $120 they paid for the machine, not the $1200 retail that you pay as a consumer, so an extra $30 on a $1200 purchase probably isn't going to make or break anyone. If you think about the tariffs as a "Sin Tax" like you would pay on cigarettes or alcohol or gambling you can just pay it and get over it, or you can look else where for other options.


Well, your math is wrong, but I don't disagree with most of your reasoning.

Retail prices are calculated using a TOTAL COST to the seller, not on a base cost, with all additional costs passed on as is. So a thirty dollar cost rise wont be passed on as a thirty dollar retail rise, in most cases.

In addition, there is a difference between a tariff on specific final products, and the kind of across the board tariffs being applied in this case. The AGGREGATE cost to domestic consumers when tariffs are applied to a wide swath of products, means that the overall cost of living for anyone who requires those products will take place.

I see that Trump backed off for now, on the tariff affecting automobile parts manufactured overseas, so that's one industry here that wont be AS damaged as others will be.

Again, I come back to the main thing, which is that these tariffs are not supposed to be permanent, they are supposed to cause China to change their trading ways. If China DOES change as desired, these tariffs will go away, and that's why no large businesses are moving to rebuild American industries here because of them.

It's not clear yet what changes Trump and the GOP want China to make, and it is especially unclear whether those changes would make American industrial jobs again pay in the middle class range, as Trump seems to imply he favors.
Seakolony's photo

Seakolony

Sun 05/19/19 10:54 AM




I think China will win this trade 'war' because their leader, unlike Trump, does not have to stand again for election. All they have to do is wait for the next US government which will, of course, be democrat, who will no doubt have different policies on trade.


PBS Frontline did a show "Trumps trade war" the other day if anyone has interest in nonbias reporting. Their thought is China is looking to be a world super power like the USA, and like USSR or Russia used to be and if the "trade war" continues it will turn into a "cold war" that could last for years. Yes tariffs hurt the US economy and bussiness's short term, but long term it could possible lower the US debt by keeping more money inside the US and if tariffs are used to pay down debt (highly unlikely) it would do good for both the US and China. Another thing people don't look at is the tariff is on wholesale price, not retail. So lets say there is a 25% tariff on a washing machine. That is 25% that the seller pays on the $120 they paid for the machine, not the $1200 retail that you pay as a consumer, so an extra $30 on a $1200 purchase probably isn't going to make or break anyone. If you think about the tariffs as a "Sin Tax" like you would pay on cigarettes or alcohol or gambling you can just pay it and get over it, or you can look else where for other options.


Well, your math is wrong, but I don't disagree with most of your reasoning.

Retail prices are calculated using a TOTAL COST to the seller, not on a base cost, with all additional costs passed on as is. So a thirty dollar cost rise wont be passed on as a thirty dollar retail rise, in most cases.

In addition, there is a difference between a tariff on specific final products, and the kind of across the board tariffs being applied in this case. The AGGREGATE cost to domestic consumers when tariffs are applied to a wide swath of products, means that the overall cost of living for anyone who requires those products will take place.

I see that Trump backed off for now, on the tariff affecting automobile parts manufactured overseas, so that's one industry here that wont be AS damaged as others will be.

Again, I come back to the main thing, which is that these tariffs are not supposed to be permanent, they are supposed to cause China to change their trading ways. If China DOES change as desired, these tariffs will go away, and that's why no large businesses are moving to rebuild American industries here because of them.

It's not clear yet what changes Trump and the GOP want China to make, and it is especially unclear whether those changes would make American industrial jobs again pay in the middle class range, as Trump seems to imply he favors.


Okay so do actually think people will buy Chinese products with a 30 increase. I doubt it. Causing Chinese finance disruption.
dust4fun's photo

dust4fun

Tue 05/21/19 08:29 PM





Okay so do actually think people will buy Chinese products with a 30 increase. I doubt it. Causing Chinese finance disruption.

---------------------------------------------------------


There is a HUGE difference on what it cost to produce something in China compared to the USA. Maybe somethings could be made in some 3rd world country for similar prices, but that's about it. So lets say the gas tax went up 50cents a gallon, almost everybody would pay that and all the increases that go along with it, however a few people may buy more fuel efficient, or electric cars. But for the most part people will just pay it and learn to adjust. The US has created a very high cost of living, and many don't realize how spoiled and lazy many people are in the US. The only leveling in the playing field is technology. Robots do not take breaks, make excuses not to show up to work, or expect a raise on a regular basis. However sooner or later they do need maintenance, but for the majority of things they are way cheaper than employing people and they get more advanced and cheaper all the time. What do people consider "middle class"? Compared to much of the world everybody in the US is At least "middle class", and the majority are "rich".
Edited by dust4fun on Tue 05/21/19 08:31 PM
indianadave4's photo

indianadave4

Tue 05/21/19 10:43 PM

The stock market tumbled hundreds of points following the threat of new tariffs.

This is why President Trump tweeted the threats:

China reneged on all of its trade commitments with the United States.

Reuters reported on that China backtracked on almost all aspects of the US trade deal.

This is when Trump acted. China still wants to rape the American marketplace. They want the unfair trade agreements implemented by the Obama administration.

What is odd is that the news media and most democrat's are blaming the President instead of addressing China.