Tariffs and Lakes Region Business/Costs
 

Does anyone have any knowledge about how the increased China tariffs are affecting/will affect the Lakes Region? NPR had a piece on this morning saying this latest round will target more common consumer goods, but other than the garden flag I just bought for $25--which seems excessive--I'm not sure I've noticed much change.

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Buy American and there is no tariff change unless on raw materials, plus it helps put our people to work. As long as it doesn't say "Made in China", you should see little impact.

The tariffs impact the supply chains so have the potential to affect the cost of goods Made in the USA. I wish more people understood that the tariffs are not paid by the Chinese but instead by us. I know all of us on the forum get it!

Correct but the point of increased tariffs is to increase the price of foreign products and making them more expensive than products that are 100% made in the USA

Best part is it will hurt China more than us! Their economy depends on us buying the junk they make!

The owners of Wal-Mart must be pulling their hair out.

Focusing on the economics rather than the politics, this is very unlikely to be the case. If Chinese goods see a 25% bump in price at retail, you can be sure that will put upward pressure on prices from profit-maximizing domestic suppliers.

In general, suppliers increase price whenever they can get away with it. You may remember that during the last round of tariffs, manufacturers increased the prices of clothes dryers that were not taxed along with the prices of clothes dryers which were taxed.

Did those prices ever come down afterward?

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Price gouging
 

I could see some price gouging at the retail level. Or, at least some price instability as retailers mark up, then mark down when sales slow, until consumers get used to the new (Inflation) prices. By that time, we will have worked out a trade deal. In the meantime, Thomas Friedman, economist/author, will have lots of material for a new book.
Who has the most Chinese stuff on the shelf? Amazon, Walmart or Party City?

When the cost of a washing machine from China increased $100 what effect did that have on US consumers. Result was that US manufacturers also raised their price by $100. Greed??

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I am a retired workaholic and continuing aquaholic

The biggest problem is there aren't a lot of products that are 100% American anymore, esp anything that is high tech. .

Oops, bit of a typo in my first post--I understated the problem. To clarify--when Chinese washers were tariffed, not only did the price of imported washers go up, but the prices of imported dryers, and the prices of domestic washers and dryers all went up. Maybe this was greed, as Woody suggests, or maybe just capitalism, or maybe there's not much of a difference. But the clear result was a giant hit for consumers.

Here's more interesting detail--prices still up on both, for both imported and domestic. (For the politically minded--this is a liberal paper writing about a study done at one of the most conservative economics departments, so I hope we can all accept the information/analysis)

https://www.washingtonpost.com/us-po...=.1303286804cf

What bugs me is that a lot of the food we eat comes from China. I don’t want to eat Chinese tuna or put my face on a Chinese made pillow or mattress. I don’t think they have the same protections in place and I don’t trust that we’re getting safe products. We bought our new Whirlpool refrigerator because it was made in the US. Same with our family room furniture. We didn’t buy from Ippolito’s (didn’t find what we were looking for) but they’re advertising their furniture is made in America.

We bought furniture from Ippolito's and it was made in America. Really good solid furniture.

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I am a retired workaholic and continuing aquaholic

If it is sold in the USA, it needs to conform to US laws and code.

As for some electronics(Cable Modems for example), US companies are moving production out of China to places like Vietnam or Indonesia to avoid the tariff. Until the move is complete, the tariff is passed directly to the consumer. Not 100% sure, but I believe the next round will include iPhones. Could give Samsung and other non Chinese manufactured products a big advantage.

The Tariffs will certainly hurt the China economy, but it does not mean all products will be made in the USA nor do we want to have that happen. It is good for Americans to be able to buy goods from around the world.

I noticed the price of a McDonald's Egg McMuffin seems to have increased as I went through the drive thru yesterday.

Even if tariffs go on all chinese imports 500b at 25% is a small piece of our total gdp and much falls on non necessity items. If walmart raises prices on chinese goods people wont buy . And you are correct manufacturers are moving suppliers to places like Viet Nam the problem is logistics . What they move will unlikely ever go back . Chine will not change practices because they want to be nice. This has gone on for 30 years . We export 100b to them and import 500b from them. They have an incentive to settle but time will tell

Most of McDonalds food tastes like it was made in China.

My best friend is an executive at Samsung and their fear is the tariff will be extended to South Korea.


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I look at this as a quasi gamble on the part of the US negotiators which is quite simple, if the China will not play ball make it financially toxic to manufacture things there and thus that manufacturing goes elsewhere, ideally back to the US. If China starts to shed copious amounts of manufacturing capacity that *may* get their attention. This will take time and the groundwork being put in place to put pressure on them needs to remain in place. Does no good if after Trump leaves office the next president doesn't keep the pressure on. The years and years of finger wagging, soap box lamenting and all talk no action has gotten us nowhere. It's about time something is being attempted, even if it's not perfect in every aspect.

Overall this is long overdue. Consumers may complain that prices may go up a bit as a result, but ideally if the US can recover some of this capacity that's not a bad thing. I never quite understood the concept of relinquishing the ability to manufacture things to an adversary. That puts us in a really difficult position if or when that relationship sours, considering they are not exactly friendly in the first place. The theft of IP is also a huge deal and anyone who doesn't think that they are using this to their advantage for nefarious purposes is simply naïve.

You are 100% correct. Check out this article from Motorola Solutions CEO - https://www.foxbusiness.com/business...s-huawei-theft

And in case you are wondering, Motorola Mobility, the other half of what was Motorola, is now a Chinese company. Sold off after Google purchased it, stripped out the pattens and spit the mobile phone and the Cable group out. Do not blame the Chinese for this. Motorola lost its way when Carl Icahn raided the company and they lost focus when Apple came in and ate their lunch.

The Motorola Solutions story is a much better story. this article shows China is not needed for US companies to be successful. In fact, it shows that US companies that Chase the China dream is very risky.

If products from China become too expensive manufacturing will just move somewhere cheaper and I doubt that will be back to the US.
As someone else pointed out a lot of manufacturing is moving to Vietnam and India. They will go anywhere there is cheap labor. There is no cheap labor in the US.

Well, I only had three of them and used to have four so I actually feel like I am saving money with this tariff stuff!

It’s supposed to be that way but I’m not so sure. Chinese made McDonalds happy meal toys contained lead paint. A friend built a retirement home in Florida only to find after the last finish work was done that their A/c failed because the copper had corroded. Every bit of copper pipe and wiring had to be replaced because Chinese sheet rock contained high levels of sulphur which reacted with the copper. The house had to be gutted.

What Do You Call This?
 

Interesting that an administration official retired recently, and advised China to wait on any tariff agreements. :confused:

Susan Thornton has advised a China think-tank that, 'seems the next election is nigh, and the tariffs may disappear as a result. :eek2:

To put it another way:

Appealing to the "Long View"... :rolleye1:

Most people don't understand the actual problem. It's not that we buy more goods and services from China than they buy from us. The problem is what they do with the "left-over" money. They don't use it for origami. [Yes, I do know that "origami" is Japanese.] First of all, they buy US debt. They currently hold a trillion dollars of our national debt for which we pay them an additional $25 billion per year in interest --that's taxpayer dollars. The rest is used to purchase US companies (and move additional manufacturing to China), stocks, bonds, and real estate. That's a lot of rent being thrown into the pot to buy more real estate and companies.

Here's a link to a PBS Frontline program that addresses the issues:

https://www.pbs.org/wgbh/frontline/film/showswalmart/

The first round of the Trump tariffs had an immediate negative effect on the solar industry. Most of the modules used in large utility scale projects such as the Co-op's on Moultonboro Neck had come from China (an example, I don't know where they sourced their modules). When the first round of tariffs went into effect last year it had two very unfortunate consequences; a shortage of solar modules in the industry, and the cancellation of a great many industrial solar projects. One of the industry blogs I follow stated that the cancelled projects lead to 88,000 American workers in the solar field losing their jobs after the tariffs hit. This may not have been noticeable in most of New England because there aren't that many utility scale installations, but it certainly had to be felt in the sunbelt states.
We won't use Chinese products in our installations, mainly because of lesser quality and warranty issues, but we felt the cost through the increase in demand and eventually pricing because of the increased demand. We absorbed the additional costs on all the systems we already had contracted. That however isn't a sustainable long term business practice if political whims are going to continually destabilize competitively balanced price structure.
So far this year we are busier than ever with our residential and small business contracts and have needed to add four more electricians :-). Sourcing the exact modules we want at the time when we want them is a little more challenging but we have been able to get what we need and the prices seemed to have stabilized. The effect of the tariff has proved to be just a ripple in the water for us but I have to wonder if all of the utility scale installers have found work yet? With the ever increasing demand for residential solar, at least in New England I would hope that they have.
The real question in my mind is had the first round of tariffs gone into effect a year or two earlier, would there be a 6,000 module array on Moultonboro Neck producing power right now? ...probably not, and how many local workers wouldn't have been paid for that project? Protectionism has a price and it shouldn't be instituted without carefully considering all of the costs and consequences.

I work in import/export in the electronics field. The 25% tariff came out earlier this year, they are actually expanding the categories/harmonized codes affected. We ran into issues with hard drives that had China as the country of origin and got dinged, although not a lot due to the value of the shipment.

Someone mentioned cable modems above. I have a lot of experience in the manufacturing/supply chain side of them. The OEM/CM's have their ways around this for certain. Raising 25% will certainly price some companies out of the market, so things are definitely being shifted around. The volume is high and the margin is very thin on these on the manufacturing side so any increase can be tough.

Will we see it in the lakes region? Most likely no. If anything, it would be people trying to gouge.

There was a significant increase in the cost of aluminum coming from China. That will certainly affect the Lakes Region. Whether it is as small as higher prices for your favorite beer or as large as the cost of a new pontoon boat or a trailer for your new fiberglass boat, it will affect those in the Lakes Region and across the country.

For the record, I believe this was long overdue.

Following Aluminum Pricing...
 

Especially interesting, as China has been refusing to accept our recyclables.

Rather than our recent dumping of recyclables into landfills, I'd think compressing the aluminum and storing it until prices go up would make more sense. I was offered only 25¢ per pound for a 100-pound billet of aluminum.

The NH town of Franklin is mentioned here:
https://www.theatlantic.com/technolo...-trash/584131/

I believe that China will still accept aluminum for recycling. Their restrictions were more on “mixed” recyclables. Much of the plastic that was being shipped there included associated hazardous and non-recyclable materials (old TVs with lead solder as an example) and they didn’t want to become the hazardous dump for the US. Paper was an issue because we included things like envelopes with plastic windows (not recyclable) in the bales which caused a problem.

I think your issue with the price for recyclable aluminum is supply & demand. There is a s__t ton of aluminum cans being returned now and American companies still haven’t bought into buying recycled raw materials due to quality concerns.


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Seems completely obvious that everybody who buys goods made in China will see it on those and related products.

Also, when you say "gouge", I think you're referring to normal capitalist profit-maximization. That's not to say it's good or bad, just to say that it is typically inescapable. If you were a CEO competing against China today, and all of a sudden your competitors' prices increased by 25%, would you really hold your current prices exactly where they are today? If yes, how long would your shareholders be OK with you running the company?

Check out my link in earlier post for a recent case study

China has always required U.S. companies to turn over IP and even patent information as a cost of doing business in China.They immediately copy or reverse engineer the product and manufacture it themselves using cheap labor thus creating a competitor to the business that they licensed.
No one has stood up to them for decades until Trump came on the scene.
Love him or hate him, he's on the right track and it may be initially painful but should yield good results

trade and lakes region
 

One thing is certain; prices are heading higher if you shop walmart or other bargain like stores. CEO already said this. As a conservative I don't get tariffs. They're a tax on consumers. Period. If China wants to dump low priced stuff on us, let them! If they want to hurt they're consumers by blocking US goods from being imported, let them! Sooner or later Chinese consumers will retaliate and in the meantime the US consumers and economy win.
Furthermore, tariffs smack of picking winners and losers and THAT is not "free markets".

Larry Kudlow, Trump's director of economic advisers USED to say "free markets are the best path to economic prosperity". Not any more...

I called a local dock company and asked them to give me an estimate to repair a 12 X 27 wood dock. They quoted $2,000 for repairs and estimated about $25,000 for an aluminum replacement. The aluminum price was a lot higher than I expected. Based on previous aluminum dock purchases I thought it would come in at about $15,000. They told me the price of aluminum had doubled in the last year.

Easy decision for me. Sorry China!

More like "Sorry America" for those who MUST use aluminum.