Posted on 06/15/2018 6:08:41 AM PDT by GonzoII
US President Donald Trump has imposed 25% tariffs on $50bn worth of Chinese goods, accusing Beijing of intellectual copyright theft.
The US will impose further tariffs if China retaliates, the White House said.
The tariffs affect more than 800 types of products and are due to come into effect on 6 July.
China has already vowed to retaliate, raising fears of a trade war between the world's two largest economies.
Mr Trump said the tariffs were "essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs."
(Excerpt) Read more at bbc.com ...
I think this is a good move. That being said, here comes price inflation.
Haha China! Good luck. It’ll be 200 bln by next Friday.
China cannot afford to lose America as a trade partner, so their ‘retaliation’ will not be much to consider. It is only to save face.
All I can say is the global economy and the flow of merchandise, money and capital is very complex and the dynamics are changing all the time.
I trust the ‘trio’ of President Trump, Peter Navarro, and Wilbur Ross to navigate their way around it.
25% of $50bn is $12.5bn. When compared to a trade deficit of $400bn (3% of the overall deficit)it is only a small dent. But a good start.
We gotta...
US retailers may try to take a bite by upping prices but China will lower prices to adjust because otherwise they lose market share.
The desired outcome is the PRC government’s profits take a hit, prices in the US remain stable, PRC is poorer; why am I am not having a broken heart for the poor PRC Chinese?
China has 6% of the arable land of the US. They have no oil, no natural gas, no water.
So we have to pay more for transformer toys. Watch how they fold because they have to.
This is bad news, the price of my rat poison filled tooth paste is going to go through the roof
If they retaliate? You mean when they retaliate.
“That being said, here comes price inflation.”
Is this truly a given?
It seems given the extremely low production costs in China, they could afford to take a hit on their profit margins and still come out ahead.
Just saying.
It seems given the extremely low production costs in China, they could afford to take a hit on their profit margins and still come out ahead.
I think a lot of Chinese companies already save a ton by eliminating post production QA. They try to get the process as reliable as possible and, hey, if it’s defective, you can return it.
25% is big.
I believe they will reduce the wholesale price, but not the full 25%. I think all parties will absorb a part of it, including the consumer. I don’t expect a 25% price increase. Maybe 5% or 10%.
I think this is a good move. That being said, here come imports from Indonesia, Malaysia, Viet Nam, India ... and maybe some increased USA production.
I’m not saying that this is a bad move, but in the end, isn’t it the American consumer that pays that tariff? The result may be that we buy less of the Chinese product, decreasing the trade deficit (this assumes only China makes the product), or we could buy the same amount from China with an increase of domestic inflation, or we could substitute with the product of another foreign manufacturer (e.g. Vietnam) with no effect on the overall trade deficit.
If Trump’s moves result in a more open Chinese market for our goods, great, it will be good for our economy and for domestic jobs. But in the short run, the tariff has been imposed on us.
The Dollar Store’s now the Buck ‘n Quarter Store.
Dang.
If this continues it will soon be cheaper to make things in the US.
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