Trump Tariff Basics

Discussion in 'Politics, Religion, Social Issues' started by Huntn, Jun 7, 2019.

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  1. Huntn macrumors P6

    Huntn

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    #1
    I want to be sure I understand how tariffs work and how Trump is employing his strategy. Back in the old days when a country say China wanted to sell us their product, the key word, THEIR, say steel by undercutting US steel prices, a tariff might be used to protect the domestic product. This would prevent the price from falling, but would protect domestic manufacturing.

    But today, you could ask what domestic manufacturing? We have handed much of our manufacturing to China on a silver platter, so when Mastermind Trump decides to use tariffs, most of the impact is now placed on US companies who have contracted with Asia to make products for them and US consumers who will be buying those products. How is China hurt? US consumers are paying for this.

    Then in retaliation, China imposes their own tariffs on US agricultural goods now hurting our farmers. This seems like lose, lose to me.

    So, what am I not understanding, or is Trump just incompetent or is he trying to please some of his base? And if it is as I’ve described it, why are we not collectively screaming about this?
     
  2. jkcerda macrumors 6502a

    jkcerda

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    #2
    Amada, Bystronic & Trumpf all are bringing in manufacturing to the U.S.
    you are correct stating that China plays pretty loose with their steel prices and it's hard to beat, the price WE pay for material ALONE is higher than China's end product :(
    everything we manufacture is things that take too long for China to bring in and custom production of less than 1000 units.
     
  3. MacAndMic macrumors 6502

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    #3
    Any time someone uses descriptors in front of a name, I can only take the post partially serious because your confusion on the subject is clouded by your hatred of the person. Remove the person described and look at the history of the US economy, past trade deals, companies outsourcing or moving out of the US, tariffs and then think of how it would be today if those past things did not happen. Yes, Trump is trying to reverse that history because he and his "base" know that the US gave away the farm.
     
  4. statik13 macrumors regular

    statik13

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    #4
    I don't get why people are surprised when manufacturing moved away from more expensive locations to cheaper sources. This is exactly how the free market system is designed to work.

    The difference is 50 years ago, America stood alone, so the movement was within the country. Today we have a global system so the shift is around the world.

    Tariffs are just a poor attempt at a stop gap that will end up hurting the US economy long term.
     
  5. Huntn thread starter macrumors P6

    Huntn

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    #5
    I asked about tariff mechanics as conducted by Trump (you know our President) and asked if today they work the same way when companies tried to flood our markets with their products versus us sending a huge chunk of our manufacturing over there and they are building our products on request.

    So you have nothing to offer in regards to what I asked except your observance that I don’t like Trump. How inciteful. :rolleyes:
    --- Post Merged, Jun 7, 2019 ---
    Yes, but do you understand what I am asking?
     
  6. statik13 macrumors regular

    statik13

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    #6
    Oh? Sounds like you have something interesting... yes, please share.
     
  7. stylinexpat macrumors 65816

    stylinexpat

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    #7
    Del Mar County Fair just kicked off. First week I heard was slow for sales. From what people say there is a noticeable drop in consumer spending compared to the first week from last year and year before. Let’s see what second week turns out like. This one is Long, I believe 3-4 weeks Long.

    https://sdfair.com/
     
  8. MacAndMic macrumors 6502

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    #8
    Maybe you should have made your post more clear and not sound like a Trump bash.
    --- Post Merged, Jun 7, 2019 ---
    This is where America got greedy. We tried to compete with each other within our borders and the winner was determined by the cheap labor sourced elsewhere. Consumers followed the cheap dollar. As far as the US was concerned, we owned the world and nobody was a threat, without us realizing we were our own threat. Short sighted of course, we have learned. Correction time.
    --- Post Merged, Jun 7, 2019 ---
    Revisionist history has taken over our country. The every day american has no idea of real American history and the great success we have created. They only know the modern day negatives. Ironic, isn't it.
     
  9. stylinexpat macrumors 65816

    stylinexpat

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    #9
  10. Huntn thread starter macrumors P6

    Huntn

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    #10
    Post No.1.
     
  11. Zenithal macrumors 604

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    #11
    There is no long term incentive for manufacturers to bring back factories to the US. You could remove every green policy there is and eliminate taxes for plants, and they still wouldn't come back. China's getting expensive. India is the next big third world country that's ripe for manufacturing facilities, with no shortage of able bodied workers who'll work for less than the Chinese, and their money goes further in India.


    But to answer OP's question: Basically, imports get tarrifed. The company eats the loss and increases the prices of end goods which consumers make up for. America, Britain, whatever, it's the consumers who take on the brunt of the tariffs.

    Except the Chinese turned towards other countries for meat and grain imports and left US farmers with surplus.
     
  12. Huntn thread starter macrumors P6

    Huntn

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    #12
    What is not clear? Can you speak to what I’m asking about or just continue to complain how I worded this post? If the latter and you have no constructive input, thanks for explaining why you don’t like my post.

    For anyone who is familiar with tariff mechanics, I’m interested in how this helps the US economy? Until corporations decide to bring manufacturing back, I don’t see Trump’s strategy as making much difference. In the mean time, China is not paying, it is US consumers are now paying President Trump’s tariffs.
     
  13. statik13 macrumors regular

    statik13

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    #13
    Ahh, well in that case, you asked four questions... I think you already knew the answers before asking, but this is my take:

    How is China Hurt?
    Short term? They may see their economy take a slow down, but just a few years ago, China was purposely attempting to slow down their economy, so probably not much of a hurt. Long term? Likely China builds new trade relationships that exclude the US. Just the same as Australia, Canada, Japan, Mexico and others created a new Trans Pacific Agreement without the US. (CPTPP).

    Is Trump pandering (my word) to his base? Absolutely! Here is where the man is smart. He knows how to build up a fake situation into a full blown emergency and market it to the people who are most willing to listen without fact checking. Classic snake-oil salesman. Fuel hatred and rile up your base. Gets votes every time.

    Is Trump incompetent? He's selfish, dishonest, petty, a bully, and puts his own desires in front of the entire country. He doesn't have single bit of empathy outside of his own family. I get the impression that the man honestly believes "If you aren't cheating, you aren't trying hard enough". Does that make him incompetent? For business, debatable, for government? I'd go more with completely unsuitable in any leadership position.

    Why are we not screaming about it? We need to! Sadly, most people don't get involved until it impacts them personally, at which point it is too late. Even then, you can bet Trump will point his finger at China, (or Mexico, Canada or whoever) saying "See! look at how bad they are!", never mind that it was a situation he caused himself...

    The entire situation has America really up **** creek without a paddle. :(
     
  14. Huntn thread starter macrumors P6

    Huntn

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    #14
    I agree with your characterization of Trump, however, I’ll repeat, my motivation for this thread is to ask about the mechanics of how tariffs work or supposed to work. It seems that to hurt China the technique being employed by Trump is to wound ourselves to eventually make China uncomfortable. Is this an accurate characterization? AND YES, why are we not collectively screaming about this? I already think I know why the Right Wing is not screaming. :oops:

    The primary point I’m asking about, is in this situation where we have handed China a huge chunk of our manufacturing, with no equivalent domestic manufacturing on our end to protect, how can tarriffs benefit us if US consumers are paying the rising price tag? It seems ludicrous, hence my question asking about this.

    Anyone who knows, I welcome to be educated on the topic, if I need an education.
     
  15. MacAndMic macrumors 6502

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    #15
    You are correct, consumers ultimately pay the tax but as a consumer you have a choice to buy an alternative domestic product. When that happens, the foreign company suffers. That foreign nation then gets pressured by their companies to even out trade so that they can remain in the game.

    China has enjoyed underselling many of our products. We are to blame for that, we let them produce our products for cheap but then they got greedy and started copying and competing with us. To protect themselves, they placed huge tariffs on our products in their country, ultimately taking us out of the game within their borders all the while, we continued to let them sell in our country cheaply.

    One issue I don't see discussed much is the human factor. In the US, we take great pride in treating our labor fairly. Other countries treat their labor like crap! and they can barely afford to eat but we just turn a blind eye because we like to save money.
     
  16. statik13 macrumors regular

    statik13

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    #16
    Only if an alternative product exists. Not all that many cell phones, televisions or computers made in the USA. Only so many Crayola crayons, Stetson hats and Smith & Wesson guns a person needs.

    What products does America make today that China consumes? With or without tariffs? Soybeans and pork are the example I always hear given.

    Sad but true.
     
  17. Huntn thread starter macrumors P6

    Huntn

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    #17
    Thanks for a meaningful reply.

    You are correct, consumers ultimately pay the tax but as a consumer you have a choice to buy an alternative domestic product.

    This is exactly my point. If our domestic products consist primarily of imports from China, how can a tariff be considered effective in teaching China, or any country a lesson? Our tariff policy is kicking US consumers in the shins.

    Regarding the human factor, I spent the majority of my life working as labor and have debated this issue in the forum on multiple occasions. I am acutely aware of why our jobs and manufacturing have been shipped overseas- $$, savings in labor and lax or non-existent environmental regulations, disenfranchising many of our citizens in that process to boost corporate profits. I have asked, who are they going to sell their products to when a small minority has the discretionary funds to buy them?
     
  18. stylinexpat macrumors 65816

    stylinexpat

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    #18
    This is quite true but one must also remember that the Chinese were producing products for the Americans at prices that they were willing to pay for and were well aware of what quality comes with what price. Over the years Americans have profited hugely as well from this. What is often not mentioned here is that while China may have undercut prices that it costs for Americans to produce in America that may not be the case for all other countries around the world and in international trade along with freedom of trade one must consider all other countries as well and not just the advanced and developed countries forgetting about all the undeveloped countries. Trade is quite complicated
     
  19. VictorTango777, Jun 8, 2019
    Last edited: Jun 8, 2019

    VictorTango777 macrumors 6502

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    #19
    People assume that tariffs are only supposed to affect the price of imported products and products which use imported components. When the administration started putting tariffs on foreign products, did they consider that domestic producers may take advantage of the situation by raising prices on their products in order to be "competitive" with the tariffed products? It's already happening.
     
  20. stylinexpat, Jun 8, 2019
    Last edited: Jun 9, 2019

    stylinexpat macrumors 65816

    stylinexpat

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    #20

    I don't see how this is fair.. Trump passed an anti-dumping tariff on Mattresses which allows up to 1731% duty on a mattress. Imagine a $100 mattress costing $1731 after duties :rolleyes: What do you reckon the local mattress manufacturers will do to mattress prices after :rolleyes:o_O Who will pay the price for the mattress after..? China..? :rolleyes::rolleyes:

    http://www.the-japan-news.com/news/article/0005776493

    https://www.cnbc.com/2019/05/30/us-...g-duties-on-chinese-mattresses-beer-kegs.html

    The U.S. government is imposing duties of up to 79.7% on Chinese-made kegs and up to 1,731% on mattresses. Major U.S. mattress firms had petitioned for relief, including Serta Simmons Bedding, Leggett & Platt and Tempur Sealy International. American Keg had also sought relief.
     

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19 June 7, 2019