Trump's trade war with China

[bitwelder]

I was reading an article about the new 25% tariffs that Trumps wants to put on 1300+ products/items from China, and luckily there was a link to the document.
Included in the list, apart of industrial equipments, steel/iron/aluminum there is also a lot of electronic testing gear and also components like:

85322100 ........... Tantalum fixed capacitors
85322200 ........... Aluminum electrolytic fixed capacitors
85322300 ........... Ceramic dielectric fixed capacitors, single layer
85322400 ........... Ceramic dielectric fixed capacitors, multilayer
85322500 ........... Dielectric fixed capacitors of paper or plastics
85322900 ........... Fixed electrical capacitors, nesi
85323000 ........... Variable or adjustable (pre-set) electrical capacitors
85329000 ........... Parts of electrical capacitors, fixed, variable or adjustable (pre-set)
85331000 ........... Electrical fixed carbon resistors, composition or film types
85332100 ........... Electrical fixed resistors, other than composition or film type carbon resistors, for a power handling capacity not exceeding 20 W
85332900 ........... Electrical fixed resistors, other than composition or film type carbon resistors, for a power handling capacity exceeding 20 W
85333100 ........... Electrical wirewound variable resistors, including rheostats and potentiometers, for a power handling capacity not exceeding 20 W
85334040 ........... Metal oxide resistors
...
85412100 ........... Transistors, other than photosensitive transistors, with a dissipation rating of less than 1 W
85412900 ........... Transistors, other than photosensitive transistors, with a dissipation rating of 1 W or more
85413000 ........... Thyristors, diacs and triacs, other than photosensitive devices
85414020 ........... Light-emitting diodes (LED's)
85414070 ........... Photosensitive transistors
85414080 ........... Photosensitive semiconductor devices nesi, optical coupled isolators
85414095 ........... Photosensitive semiconductor devices nesi, other
85415000 ........... Semiconductor devices other than photosensitive semiconductor devices, nesi
85416000 ........... Mounted piezoelectric crystals

https://ustr.gov/sites/default/files/files/Press/Releases/301FRN.pdf

[PChi]

It's nothing new. Clive Sinclair complained  that the import duties on components were higher than those for completed products penalising home manufactured 'computers' like the Spectrum. I don't know what the duties are for importing into the EU these days.

[CJay]

The original Raspberry Pi was claimed to have been made outside the UK because import duties on the components needed made it uneconomical to assemble in the UK, utter insanity because the government often complains about the lack of hi tech manufacturing in the country but stifle it with tariffs.

https://www.forbes.com/sites/timworstall/2012/03/01/raspberry-pi-and-insane-trade-rules/#2dfd55721c2e

[Ampera]

Perhaps a better idea, since this is I am assuming a ham-fisted attempt to bring industry back to the US, is to have no tariffs on imported components, but to have these high tariffs on completed items. That way China's industry would be more economically likely to make individual components at their cheap prices, while the US works on final assembly. If a tariff has to be put in place on anything, that should be it.

I'm not a republican nor a conservative, but I do believe that large imports of manufactured and completed goods from China is a dual edged sword. On one hand it means cheap stuff for us, but it also means that companies are less likely to set up shop here.

Economics is a tricky business. Working on a macro-economical scale in my view is like Jenga. If you play your cards right, you may end up building a large tower, but make a bad move, and everything collapses.

[all_repair]

I have a huge trade deficit with my supermarket, with digikey, and with those that I buy their stuff.   What I am going to do?
No double edge sword.  I am not stupid, they gave me the best deal in town, and as Iong as I don't spend beyond my means, they are giving me what I do not have and helping me.   If I am spending more than I make then the problem is with me, not digikey.  Taxing digikey more at my doorstep, just make me buy from mouser.

[BrianHG]

The original Raspberry Pi was claimed to have been made outside the UK because import duties on the components needed made it uneconomical to assemble in the UK, utter insanity because the government often complains about the lack of hi tech manufacturing in the country but stifle it with tariffs.

https://www.forbes.com/sites/timworstall/2012/03/01/raspberry-pi-and-insane-trade-rules/#2dfd55721c2e

After reading that, it like the government has taxed everything backwards.  They tax the imported components, so small business cant by components and have a local jobs manufacturing and assembling a final product for sale.  Yet, they don't tax finished consumer products giving an unfair advantage to all foreign manufacturers.

As for the 1998 loophole, they made it impossible, or more costly to achieve than just buying foreign finished manufactured products, or, you must be large enough to have ins in the government.

[Mr. Scram]

Perhaps a better idea, since this is I am assuming a ham-fisted attempt to bring industry back to the US, is to have no tariffs on imported components, but to have these high tariffs on completed items. That way China's industry would be more economically likely to make individual components at their cheap prices, while the US works on final assembly. If a tariff has to be put in place on anything, that should be it.

I'm not a republican nor a conservative, but I do believe that large imports of manufactured and completed goods from China is a dual edged sword. On one hand it means cheap stuff for us, but it also means that companies are less likely to set up shop here.

Economics is a tricky business. Working on a macro-economical scale in my view is like Jenga. If you play your cards right, you may end up building a large tower, but make a bad move, and everything collapses.

You can steer economy, but not work against it. If setting up shop locally isn't viable due to wages being too high, no importing tariffs are going to change that. At best you give yourself a disadvantage, because what costs your neighbours x to do costs your citizens x + y due to the tariffs or higher wages needing to be compensated.

[Ampera]

You can steer economy, but not work against it. If setting up shop locally isn't viable due to wages being too high, no importing tariffs are going to change that. At best you give yourself a disadvantage, because what costs your neighbours x to do costs your citizens x + y due to the tariffs or higher wages needing to be compensated.

Which is why I suggested only taxing finished products. What costs your neighbors x + y to do, only costs your citizens within a small distance of x to do.

[jpanhalt]

Basically, I like and agree with your idea.  Remember first, that President Trump doesn't handle the details of the tariffs, nor would any President.

Second, taxing "finished" product only presents a problem: How do you define in a legally solid sense a finished product?  You and I know what that means in our gut, but what if the product is shipped without a UL tag and the finishing is simply attaching that tag (an exaggeration, but hopefully you see the point).  Both sides have clever lawyers.  It has been done in the past.

[Mr. Scram]

Which is why I suggested only taxing finished products. What costs your neighbors x + y to do, only costs your citizens within a small distance of x to do.

How would that work? Your neighbours can buy a product for x from China, while your citizens have to pay x + y for import tariffs or x + z to compensate for higher wages. However it pans out, your citizens are at a disadvantage compared to citizens of your neighbours. If you do it across the range, your citizens will have less purchasing power and companies depending on these products will be less competitive. Trying to compete by disadvantaging yourself isn't very viable. Any tariff you levy will be paid for by your citizens and none other.

Besides, industries that only exist by virtue of being protected haven't been very successful in the long run in the past.

[tautech]

2 threads on the same subject ? 
https://www.eevblog.com/forum/manufacture/trade-wars-china-vs-us-leads-to-a-price-hike-for-ee-related-staff!/

[Mr. Scram]

2 threads on the same subject ? 
https://www.eevblog.com/forum/manufacture/trade-wars-china-vs-us-leads-to-a-price-hike-for-ee-related-staff!/

That one's about staff.

[coppice]

The original Raspberry Pi was claimed to have been made outside the UK because import duties on the components needed made it uneconomical to assemble in the UK, utter insanity because the government often complains about the lack of hi tech manufacturing in the country but stifle it with tariffs.

You've got to protect that local component industry that went away long ago. 

[edy]

Economics is a complex system and trying to control it using tariffs not only stifles innovation but also competition and ultimately results in consumers paying the price. Now, that does not mean China or anyone else gets to play by their own rules and dumps cheap garbage on the world markets using state-controlled currencies and controlling their own markets and keeping internal goods cheap enough to allow Chinese labor to survive on pennies per day while labor around the rest of the world finds their standard of living dropping due to inflation. Like I said, economics is a complicated game. Trump has to start somewhere... I'm sure it is not the best approach but he is not listening to the experts around him.

Let us already keep in mind that the relative stability of our standard of living and cost of a "basket of goods" and salaries, with control of inflation, has been also helped by continuing to purchase cheap Chinese (and other foreign) goods. You want to buy running shoes 3x per year? At $25 a pair... Then it will be made in China. That means your dollars go further, you get you "stuff" and live "big" and don't need a raise in your salary, your dollar continues to go the distance. What happens when you cannot buy cheap stuff...

1. Get used to buying less and fixing it/repairing it when it breaks
2. Start asking your boss for a raise because everything costs more and you can't afford the standard of living you were used to
3. The value of that dollar doesn't go as far every month and together with #2 results in inflationary pressure
4. You get less choice and have to buy more costly domestic products that may not be that good
5. Local manufacturers may have trouble with meeting production levels
6. Environmental and energy costs also will factor in to more expensive goods

I don't know what the answer is, but slapping tariffs on things will possibly marginally improve a few specific US industries, decimate others (that rely on exports), and overall disadvantage the working-class consumer public who just wants to eat, watch sports, BBQ, drive their big cars and has relied on cheap Chinese goods from Wal-Mart for keeping themselves satisfied since they can remember.

[tautech]

2 threads on the same subject ? 
https://www.eevblog.com/forum/manufacture/trade-wars-china-vs-us-leads-to-a-price-hike-for-ee-related-staff!/

That one's about staff.

Really ?
So you just read the subject line ? 

[Ampera]

I would define an unfinished product as an item unusable as a home, commercial, or industrial appliance without combination of other parts in a factory environment to produce a finished product.

Catch clauses like requiring operational components to be added, instead of just a superficial change could be another idea.

As for other nations not having similar tariffs, I believe that is the greatest flaw of imposing one as well, however the US is China's largest importer of manufactured goods, so the US's sheer size compared to it's neighbors might be enough to save us from that. Keep in mind the US has the population of around 5 United Kingdoms. Other ideas could include tariff partnerships, so the big boy is kicked over, leaving Europe, and the US to compete on their own for industry.

Western trade IS China's economic lifeline. If it is removed, there is little to nothing they do besides potential threats or diplomatic actions to prevent an industry-crushing tariff to be imposed. Not to mention, we're still only talking about finished products, so China would still have a massive component industry.

@edy

I believe these products can still be made cheaply, as I do not believe slapping some components together to make a hair dryer is as expensive as the cost of harvesting the raw materials, engaging in specialized processes to manufacture them.

I do also believe in a repair society over a throw-away society. It's just a better concept, so if that's one thing that might be gained by having more expensive products, I consider that a bonus.

Ultimately, we're weathermen trying to predict the future, and while we can see which way the winds are blowing, a butterfly in Brazil may set off a tornado in Texas.

[Mr. Scram]

So you just read the subject line ? 

Initial filtering is done based on subject, yes. I presume most people on the forums do this.

[edy]

@edy

I believe these products can still be made cheaply, as I do not believe slapping some components together to make a hair dryer is as expensive as the cost of harvesting the raw materials, engaging in specialized processes to manufacture them.

I do also believe in a repair society over a throw-away society. It's just a better concept, so if that's one thing that might be gained by having more expensive products, I consider that a bonus.

Ultimately, we're weathermen trying to predict the future, and while we can see which way the winds are blowing, a butterfly in Brazil may set off a tornado in Texas.

I too would prefer a repair society but I think we need a fundamental change in the consumerist mentality of the population. Let's look at what I think would be a more ideal situation:

1. locally designed and manufactured goods that are QUALITY
2. design allowing for repair and upgrades
3. reduced "product cycling" and longer functional lifetimes for products
4. less waste as a result, less impact on the environment, more recycling
5. higher cost for goods but a concomitant increase in lifespan (lifetime/cost ratio some or increases... i.e. 2x cost but 3x product life)
6. better care for your devices/products, less "hording" and less accumulating for the sake of "sales"

That would require a paradigm-shift of the consumerist mentality that the modern capitalist economy functions on. We have a population and marketplace that is good at selling cheap products that break easily that cannot be repaired, that need to be trashed, sent back to China for recycling or landfill and then sold again and again. We buy the same $25 toaster every year when a $50 toaster built better could last 5 years, or $25 shoes that get holes in them in 1 year when $75 ones made better could last 5 years. Or $600 TV that lasts 5 years versus $1000 TV that lasts 15 years. There is a different issue altogether on whether we should be using the same running shoes for 5 years, or expect TV's to be functionally useful after 15 years... but that is another story. The point is that some products CAN be made to last a long time and still be relevant many more years than their current "expiry" dates from China due to inferior design or quality materials/components.

Given a free economy, the mass consumerist public and corporations who want to maximize profits have chosen the Chinese route.... Let's face it. Wall-street doesn't like this (tarrifs) one bit. They are not about local employment, they are about maximum profit and that means making stuff as cheap as possible, selling as much of it as possible and churning the wheel of economy as fast as possible, increasing waste and killing the planet in the process.

[Mr. Scram]

I would define an unfinished product as an item unusable as a home, commercial, or industrial appliance without combination of other parts in a factory environment to produce a finished product.

Catch clauses like requiring operational components to be added, instead of just a superficial change could be another idea.

As for other nations not having similar tariffs, I believe that is the greatest flaw of imposing one as well, however the US is China's largest importer of manufactured goods, so the US's sheer size compared to it's neighbors might be enough to save us from that. Keep in mind the US has the population of around 5 United Kingdoms. Other ideas could include tariff partnerships, so the big boy is kicked over, leaving Europe, and the US to compete on their own for industry.

Western trade IS China's economic lifeline. If it is removed, there is little to nothing they do besides potential threats or diplomatic actions to prevent an industry-crushing tariff to be imposed. Not to mention, we're still only talking about finished products, so China would still have a massive component industry.

@edy

I believe these products can still be made cheaply, as I do not believe slapping some components together to make a hair dryer is as expensive as the cost of harvesting the raw materials, engaging in specialized processes to manufacture them.

I do also believe in a repair society over a throw-away society. It's just a better concept, so if that's one thing that might be gained by having more expensive products, I consider that a bonus.

Ultimately, we're weathermen trying to predict the future, and while we can see which way the winds are blowing, a butterfly in Brazil may set off a tornado in Texas.

A creative interpretation of what finished product entails has been used for years. You finish a product but ship it in two completely inoperable parts. You have people combine the two parts and suddenly the part is manufactured in the country of choice. The net contribution to the economy and work force is negligible, yet you circumvent all the artificial limitations imposed.

[coppice]

You want to buy running shoes 3x per year? At $25 a pair... Then it will be made in China.

Get with the times. When did you last see a pair of $25 running shoes made in China? That work moved to Vietnam and Indonesia long ago, at about the same time most of the clothing production moved to places like Bangladesh.

[VK3DRB]

Pooh Bear better stay out of the bee hive, or he will get stung badly.

Trump has done the right thing. This isn't about the trade imbalance. This is about punishing China for shamelessly stealing US intellectual property on a massive scale. Unfortunately with such punishments, innocent people get caught up in the crossfire. A targeted attack on the criminals in the answer.... like seizing all their foreign owned property and bank balances, starting at the top.

[CJay]

A creative interpretation of what finished product entails has been used for years. You finish a product but ship it in two completely inoperable parts. You have people combine the two parts and suddenly the part is manufactured in the country of choice. The net contribution to the economy and work force is negligible, yet you circumvent all the artificial limitations imposed.

Sony Factory in south Wales, they imported assembled PCBs, tubes and cabinets which were put together and marked 'Made in the UK' for years to get around tariffs.

Simple fact of life is that when tariffs are imposed the countries targeted will retaliate and also find ways round them. It's a game you can never win because even if the tariffs can't be circumvented, all it does is make the goods your population want to buy more expensive so it pushes up wages, triggering inflation, repeat ad-nauseum.

It's a stupid idea that will have severe knock on effects but it'll make Trumplethinskin look like he's doing something worthwhile for the people who can't connect the dots between the price of their next TV, car, laptop, iPad etc. etc. and the tariffs.

[Galenbo]

... I don't know what the duties are for importing into the EU these days.

EU and/or their Vassal States steals about 26% to 64% from me when I import something significant.
"The Formula"
The same criminal organisation(s) now make propaganda about some USA-trade-war.

[ogden]

EU and/or their Vassal States steals about 26% to 64% from me when I import something significant.

Very interesting. Please tell how you came-up with such numbers, preferably by example. Also name product(s) which have 26% to 64% EU import duties.

Hint: http://madb.europa.eu/madb/euTariffs.htm

[edit] Just checked with purchase dept: electronic components import tax from China = 0%   

[Mr. Scram]

EU and/or their Vassal States steals about 26% to 64% from me when I import something significant.
"The Formula"
The same criminal organisation(s) now make propaganda about some USA-trade-war.

How terrible it must be to live in a top 20 nation in regards to living standard, wealth, safety and freedom.