What Impact will the Trade Wars have on Reefing Gear

[Want2BS8ed]

You guys fail to realize tariffs won’t bring manufacturing back to the US.

The average salary in China is under $5,000, it’s $32,000 in the US.

Manufacturing is incredibly cheap. What the US needs to do is subsidize industries we want to boost. Instead we gave tax cuts financed on debt.

Things are going to really, really hurt when this gets into full swing. I work in probiotic manufacturing

Factory Man: How One Furniture Maker Battled Offshoring, Stayed Local - and Helped Save an American Town by Beth Macy should be required reading today.

It's a fascinating history of how we sold our souls to China chasing cheap labor (quite literally giving the keys to the kingdom away in the process) and how one man fought to stop the injustice and saved a dieing town - in small part to getting tariffs put in place.

Look I have spent a career in international business and the world is far to intermeshed for "isolationism". That being said, why must western countries, and the US in particular, always receive short shrift?

I have been fortunate professionally to negotiate transactions on every continent with the exception of Antarctica (and an ATM machine at a research facility there might even qualify Antarctica). I have been witness to acts of institutional protectionism, government subsidization and outright state sponsored bigotry that would make most people's hair catch on fire. What we are seeing in the open now is tame compared to what happens behind the closed doors of bureaucracy.

I have to ask though, who pays for the subsidies you suggest? Money has to come from somewhere, no?

You are right on one count; there is some short term pain headed our way, but long term benefit in my opinion. So in the meantime take advantage of the silver lining: drink lots of cheap bourbon and eat lots of inexpensive cherries and cheese while you can...

 

[danoo]

@mcwhng ,Now back to picking on China lol.

Look I have spent a career in international business and the world is far to intermeshed for "isolationism". That being said, why must western countries, and the US in particular, always receive short shrift?

The short shrift in this case is getting consumer goods for way cheaper than they would be otherwise, which has obvious benefits. For example, in the past 10 years my life and the life of everybody I know has changed due to having a tiny and powerful computer in their pockets. Would that technology have progressed as quickly, and would smartphones be as ubiquitous if they had to be manufactured in America? Certainly not.

Still, there is a very valid argument the benefits of free trade are very spread out among the population, while the negatives are very concentrated. If a town is built around a factory and that factory goes out of business... that is a disaster for that town. But that doesn't mean America as a whole is getting screwed. And it certainly is a matter of policy where the trade-offs are made, and I'm not suggesting there is a right answer, but you can't ignore the benefits and only focus on the negatives.

 

[blanc88]

You guys fail to realize tariffs won’t bring manufacturing back to the US.

The average salary in China is under $5,000, it’s $32,000 in the US.

Manufacturing is incredibly cheap. What the US needs to do is subsidize industries we want to boost. Instead we gave tax cuts financed on debt.

Things are going to really, really hurt when this gets into full swing. I work in probiotic manufacturing

I'm glad somebody pointed this out.

You cannot have the competitive edge, when competing with a workforce that will accept near enough 10x less in salary. Typically, labor cost percentages average 20 to 35 percent of gross sales. Therefore a significant proportion of the end price consumers will pay.

You can try and reject globalisation, but you cannot deny some regions/countries are better equipped to produce than others. Whether this be down to labour, running cost, skill set, barriers to entry etc.

I say focus on what your good at, rather than competing against what you ain't.

Tariffs are not the root cause of the issue, they merely further perpetuate an issue that already existed.

 

[Want2BS8ed]

If small business owners are the fabric of America, why are we so obsessed with giving corporations more power to destroy them? I'm not expecting an answer. I'm just thinking out loud. I have friends on the right and left.

That’s easy to answer. Take the common nail. Where are you going to purchase it today? The big box’s retail price is likely less than the wholesale price your locally owned hardware store used to pay before they went out of business...

And let’s talk for a moment about intellectual property. China, India, Russia... there really is no legal concept of proprietary information or non-competes. You don’t buy a company (even in the good old days) in Russia. You buy a Dutch subsidiary that owns the assets in Russia so you “might” have a chance of recovery.

But don’t worry, you are not likely to get anymore than a minority ownership share to start in India or China.

The height of hypocrisy was Narendra Modi (PM of India) in Davos wagging is finger at the US about protectionist policies and the rule of law when his own country denies foreign ownership on just about every industry of consequence. Literally, if you choose to operate a retail store in India, at least 30% of your inventory must be made in India. Ask Apple. But that’s fair right? It’s not protectionism...

And Lassie, let’s not be silly. Where is all that capacity going to go? When the Aluminum tariffs were announced, what was the immediate reaction globally - other than everyone’s favorite sport of beating up on the US? It wasn’t retaliatory tariffs. No it was their own aluminum tariffs to prevent China from dumping all of that excess aluminum on the global market.

Love the US or Loath the US, without the American economy, there is no place of size, substance or capacity to sell.

Look at the global petroleum industry. Just a few short years ago, the largest trading partner deficit for the US wasn’t China for consumer goods, but Saudi Arabia for oil. Today, the US is a net exporter of petroleum and natural gas.

For all the naysayers, keep the faith. Balance will return.

 

[Want2BS8ed]

Hahahahahahah,...I know its not funny... the food co's are hot that the gov made them Post on the packages from china (fall out for the rat)...... I think this was recent....Anyone know those details ?????

I know Greg and you Do bring another angle that I had not considered...It is all good.....except the rat meat;Vomit

Did that actually get passed? It’s been a while since I’ve looked into it, but I thought Canada and Mexico were successful in getting country of origin labeling on meat shot down.

 

[Want2BS8ed]

I guess things change, but that's what Tarriff's were created for – to create powerful incentives for people to risk their capital and innovate.

Free markets = the most capable wins.

The US would never have had an economy worth mentioning without tariffs as the money would have continued to be spent in Europe and elsewhere.

A view of history can be interesting:






I'd like to know how we think we're counting.

Population?

Urban population?

Average salary?

Average disposable income?

I haven't seen us at the top of any list I've seen so far. We were "lucky 13" on one disposable income list...

Time for my all time favorite quote: “In this world there are liars, their are d@#$ liars and then there are statisticians. What do you want the numbers to say?”

The only meaningful number if we are discussing market size is total spending.

 

[Dancingmad]

I'm in the industry, and I can tell y'all to put it simply this is highly complex stuff -- especially when we get into the business of making predictions for the future. It gets really messy really quick, and people in the business of proclaiming "winners" and "losers" can manipulate the data in a variety of ways to support their beliefs or arguments. There's plenty of data to work with..

That being said, the real trade problem facing North America right now as it pertains to the cost of goods isn't even close to these Tariffs. Its truck drivers.

We are so short right now in the labor force for truck drivers due to fear of automation, which, in reality is going to come much slower than what is being put out there. Do you want a computer flying down the interstate carrying 50,000lbs of steel coils unassisted? Absolutely not. Its going to be driver-assisted and there will be regulation.

This country needs drivers and we needed them 5 years ago. Inland rates have gone up by double digit percent this year so far. Hopefully this will start to attract some folks to drive.

Please, folks, all my hair is falling out. We need drivers.

 

[Want2BS8ed]

The list of consumer markets is 5 year old (2013). Its not the same now. EU is one common market and it is nearly as large as the US market.

Sincerely Lasse

Hmm... you really think so? Is that before or after BREXIT? At a time when anti-EU sentiment was running higher in France than Britain? What about Poland, Hungry, Austria, Italy and the Netherlands?

Even Germany is getting frustrated with bolstering the EU economically.

 

[Want2BS8ed]

I'm in the industry, and I can tell y'all to put it simply this is highly complex stuff -- especially when we get into the business of making predictions for the future. It gets really messy really quick, and people in the business of proclaiming "winners" and "losers" can manipulate the data in a variety of ways to support their beliefs or arguments. There's plenty of data to work with..

That being said, the real trade problem facing North America right now as it pertains to the cost of goods isn't even close to these Tariffs. Its truck drivers.

We are so short right now in the labor force for truck drivers due to fear of automation, which, in reality is going to come much slower than what is being put out there. Do you want a computer flying down the interstate carrying 50,000lbs of steel coils unassisted? Absolutely not. Its going to be driver-assisted and there will be regulation.

This country needs drivers and we needed them 5 years ago. Inland rates have gone up by double digit percent this year so far. Hopefully this will start to attract some folks to drive.

Please, folks, all my hair is falling out. We need drivers.

...and plumbers, electricians, carpenters, welders, etc.

 

[Dancingmad]

...and plumbers, electricians, carpenters, welders, etc.

Oh yeah, I agree there too, but we're talking about tariffs, trade, and cost of our imported gear. I'm of the opinion that the driver shortage is a more pressing and more costly situation than these tariffs as it pertains to the cost of our reefing gear (and all consumer goods generally).

Everything, whether domestically produced or internationally produced is going to get to you on a truck. We need drivers. We need drivers so bad Amazon is trying to convince entrepreneurs to start trucking companies !

 

[danoo]

Look at the global petroleum industry. Just a few short years ago, the largest trading partner deficit for the US wasn’t China for consumer goods, but Saudi Arabia for oil. Today, the US is a net exporter of petroleum and natural gas.

Based on the US Energy Information Administration, the US has imported more crude oil and petroleum products from Canada than Saudi Arabia since 1995. And speaking of 1995, back then trade deficit from China was 33 billion dollars while the deficit with Saudi Arabia was 2 billion. The worst trade deficit between the US and Saudi Arabia between 1995-now was 42 billion in 2008 when the price of oil spiked, which at the time our trade deficit with China was 268 billion. Also according to the EIA we are still a net importer of crude oil and petroleum products, though we a slight exporter of natural gas.

It is possible I'm looking at the wrong data based on your statements, if so please show your sources.

 

[Pat Clark]

Have you looked at what corporate America is doing with these tax cuts?? There is no reinvestment in expanding US based production or jobs- corporate tax cuts are being used to buy back stock shares at a record rate. The factories and jobs remain overseas because of significantly lower costs in labor, materials, and liability. BMW builds most of their products in South Carolina to avoid tariffs and higher costs in Germany. Their is no significant industrial manufacturing done in the US by US corporations for obvious reasons. And for people who claim to be fiscally “conservative” it’s hypocrisy given how much our national debt has expanded with decreased tax revenue and increased spending. Explain that one to me!!

It hasn’t even been in effect for a year. It takes time to build factory’s, buildings. Plus a lot are probably waiting to see if it sticks because of being screwed for so long. Dam man can’t just snap your fingers and poof new building. Permits can take months

 

[Pat Clark]

I know. It's a combination of all of the above. Some made here, some assembled here, some designed here. But if the profits stay here because it is an American company, should that not mean something?

No because it means because it leaves out the blue collar working man who could also be a customer. See Henry Ford. I’ll buy a foreign car that was manufacture here before a American car made across the border. I’m a blue collar working stiff and would rather see people like me getting paid then some American company sell my services to foreign nation.

 

[MyReefRobbedMe]

I'm glad somebody pointed this out.

You cannot have the competitive edge, when competing with a workforce that will accept near enough 10x less in salary. Typically, labor cost percentages average 20 to 35 percent of gross sales. Therefore a significant proportion of the end price consumers will pay.

You can try and reject globalisation, but you cannot deny some regions/countries are better equipped to produce than others. Whether this be down to labour, running cost, skill set, barriers to entry etc.

I say focus on what your good at, rather than competing against what you ain't.

Tariffs are not the root cause of the issue, they merely further perpetuate an issue that already existed.

What you are FAILING to see out of the situation is How CHINA is stealing tech . With that said something HAS to Be done . Who cares if they have slaves working for grains . It’s about stealing tech . And once Everyone opens their eyes and sees that than it may make sense for the Trade war .

 

[Lasse]

Hmm... you really think so? Is that before or after BREXIT? At a time when anti-EU sentiment was running higher in France than Britain? What about Poland, Hungry, Austria, Italy and the Netherlands?

Even Germany is getting frustrated with bolstering the EU economically.

I use the figures in another post about size of markets - figures from 2013 and 2009 - did a fast calculation. The EU consumption as is today as large as the US. EU is still unite and we have not seen the end of the Brexit yet. A hard Brexit will shout down the British economy rather much and that´s probably the wet dreams of some persons because it will strengthen their own economical power.

Back to the origin question - will a trade war rise the cost for our hobby. Yes - a trade war will rise all costs and you can see it as a sale/trade tax and it will lower the consumption sooner or later. Lowering the consumption - losing jobs in the service sector and you will not have any problems with shortage in truck drivers. In Sweden - the service sector is more important for jobs compared with the manufacturing sector and has been that since many years ago. The slaughter of production jobs started here already during early 70:ties. The service sector had 2009 around 74 % of the jobs in Sweden.

Sincerely Lasse

 

[George Willings]

Umm, hate to break this to you but, there have been trade wars for years. The countries of the world are just now ticked off because we are actually putting tariffs on things, we in the US have seen tariffs put on things we ship to other countries that are rather high. Canada in particular charge the US no less than 25% tariffs on items. Which has actually gone up over the last few years as it used to be 15% about 20 years ago.

 

[siggy]

What you are FAILING to see out of the situation is How CHINA is stealing tech . With that said something HAS to Be done . Who cares if they have slaves working for grains . It’s about stealing tech . And once Everyone opens their eyes and sees that than it may make sense for the Trade war .

A company that chooses to manufacture in china Knows their Tech will be hacked or stolen but continues to do so, other options exist but simply cost more. You cant blame China for that its the Greed of those company's, and China welcomes that greed with open arms....... You can blame china for stealing our Nuclear weapons program to build theirs.

A real-estate agent once told me that he hated BIG BOX hardware, He said the quality of the homes have droped significantly because of the cheap building components and I realized he was correct. When I had a house full of little ones, I was always replacing toilet seats yet when I was a kid we had the same one for years that had ware marks/ dimples from the cover. We all know the saying Cry Once ....Ask a trades person where his tools are made.

 

[George Willings]

Umm, hate to break this to you but, there have been trade wars for years. The countries of the world are just now ****** off because we are actually putting tariffs on things, we in the US have seen tariffs put on things we ship to other countries that are rather high. Canada in particular charge the US no less than 25% tariffs on items. Which has actually gone up over the last few years as it used to be 15% about 20 years ago.

Hell, Harley Davidson is seeing tariffs as high as 45%, which forces them to build a plant in other countries to avoid that tariff. The US has been getting screwed for years. Just like with NATO, the US gets to foot the bill. Chinese manufacturers violate patent policies of their on a daily basis. So what this so-called trade war means is that we might see a slight increase in certain products.

 

[siggy]

forces them to build a plant in other countries to avoid that tariff.

Thats the whole point build here for Here and Keep the Dollar in the US ....THAT Is Just as Inportant!

 

[Falcon53]

It's amazing that in the age of the internet - with information a click away - that people can be so uninformed. We don't make anything here anymore? The U.S. is the second largest industrial economy in the world, and our industrial sector is nearly 2x larger than Japan's, who is #3:

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

Yeah, we don't make a lot of crappy consumer goods that don't have a lot of value add. What do we make? Planes, cars, agricultural equipment, turbines, capital equipment...stuff that requires actual skill to make, which is where we have an advantage.

Imports as a % of GDP are under 15% and that number has been falling for seven years:

https://www.statista.com/statistics/259096/us-imports-as-a-percentage-of-gdp/

Furthermore, the idea that making physical objects is the only thing that matters is ridiculous. Our economy is ~70% service-based, as are most advanced economies. We have a massive advantage over every other country on the planet in services. Our companies are the envy of the world.