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Also impacts anyone anywhere who has a drop shipping service in China or Hong Kong (for US customers).
https://www.smartcompany.com.au/retail/us800-shipping-loophole-aussie-brands-china-de-minimis-exemption/
Does the tariff rate go by the country that ships to the US or by the country where the product was manufacturer?
I presume that the latter. -
Also impacts anyone anywhere who has a drop shipping service in China or Hong Kong (for US customers).
https://www.smartcompany.com.au/retail/us800-shipping-loophole-aussie-brands-china-de-minimis-exemption/
Does the tariff rate go by the country that ships to the US or by the country where the product was manufacturer?
I presume that the latter.
Wouldn't be surprised if Trump makes it either, and worst headline wins. -
The problem is now, the US relies on China for products key to national security. I don't think this is the right way of going about it though.Tariffs can either be a bargaining chip for renegotiating trade partnerships, or tariffs are designed to bring manufacturing back to America.
[emphasis mine]
Designed to bring back manufacturing to America, maybe.
Whether that's even possible remains to be seen.
My guess is not: even if the economic incentives/disincentives actually work, there's the problem that America gave away a lot of its manufacturing base as so much of it was offshored; it'd probably take years, plus a concerted, organized and funded effort, to even start to reverse that.
One thing the China-bashers always seem to miss is this:
It's not as if China came over here with gunboats and missiles and took our manufacturing base away from us, against our will.
We gave it away to them. Quite willingly and consciously. So our bad, I think.
Ideally it should be where the product was manufactured, but in reality, it will be where it was shipped from, because it's impossible to prove where it was manufactured.Also impacts anyone anywhere who has a drop shipping service in China or Hong Kong (for US customers).
https://www.smartcompany.com.au/retail/us800-shipping-loophole-aussie-brands-china-de-minimis-exemption/
Does the tariff rate go by the country that ships to the US or by the country where the product was manufacturer?
I presume that the latter. -
China have just increased their Tariff rate on US products to 125%. The game of chicken continues.
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China have just increased their Tariff rate on US products to 125%. The game of chicken continues.
Does it really impact China as much to do this as it does America? $145bn imports into China from USA, and mostly commodities that can be readily substituted such as grains and oil; vs $462bn imports into USA from China, with electronics, manufactured assemblies, and consumer goods all being hard to substitute. Sure, in the long term, that could move to Vietnam, or Malaysia, or even back to the USA, but that doesn't happen overnight. I predict the USA will blink first. -
every time you raise the tariff god kills an air fryer, please think of the air fryers
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Does it really impact China as much to do this as it does America? $145bn imports into China from USA, and mostly commodities that can be readily substituted such as grains and oil; vs $462bn imports into USA from China, with electronics, manufactured assemblies, and consumer goods all being hard to substitute. Sure, in the long term, that could move to Vietnam, or Malaysia, or even back to the USA, but that doesn't happen overnight. I predict the USA will blink first.
If the very high tariff rate, is deemed to apply to the ESP32, then quite a lot of things (I suspect, as I think it is used, fairly widely) would be hit. Changing the software (especially if it has lots of ESP32 specific I/O), is usually expensive and very time-consuming.
Technically speaking, the ESP32 is from a Chinese company (Espressif), but manufactured in Taiwan. So I'm not sure how the tariffs would work, in that situation, or where they ship from (if bought in bulk). -
Does it really impact China as much to do this as it does America? $145bn imports into China from USA, and mostly commodities that can be readily substituted such as grains and oil; vs $462bn imports into USA from China, with electronics, manufactured assemblies, and consumer goods all being hard to substitute. Sure, in the long term, that could move to Vietnam, or Malaysia, or even back to the USA, but that doesn't happen overnight. I predict the USA will blink first.
If the very high tariff rate, is deemed to apply to the ESP32, then quite a lot of things (I suspect, as I think it is used, fairly widely) would be hit. Changing the software (especially if it has lots of ESP32 specific I/O), is usually expensive and very time-consuming.
Technically speaking, the ESP32 is from a Chinese company (Espressif), but manufactured in Taiwan. So I'm not sure how the tariffs would work, in that situation, or where they ship from (if bought in bulk).
All that matters is the last country of substantial manufacture, so if the module is put on a PCB in China, then China, but if it is assembled in Taiwan, then Taiwan. It doesn't matter who owns the company - that *might* be something Trump targets in the future but who knows really. For now just country of origin matters.
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it still ends up decentralizing things because most manufacturers have the following thought on expansion
"I made all this money, perhaps we should look into making some of the sub components that we put into this thing ourselves, it seems like a safe investment that I can control". At least for simple stuff. ESP32's I don't think so
Buying a license to manufacture some simpler part is often a great idea if its proprietary. -
But how can anyone prove the country of origin?
If the US can maintain this, then it might pay off in the long run. The problem is, the US can't because a different president will be elected in under 4 years' time and he will probably reverse it. China will be able to maintain it, because they don't have to worry about elections. -
But how can anyone prove the country of origin?
If the US can maintain this, then it might pay off in the long run. The problem is, the US can't because a different president will be elected in under 4 years' time and he will probably reverse it. China will be able to maintain it, because they don't have to worry about elections.
They can't really, it's effectively only something that impacts the big companies that can't afford to get caught - like Apple, for instance. Illegal drugs are actively shipped through the postal system, packages cannot be realistically inspected, and country of origin rules are easy to bend with some creativity. Arguably, repackaging a product that you receive from China and slapping a new logo on it is a "manufacturing" step, so you might even be able to legally claim a new location of manufacture. -
it really is because things like bad ink or stickers that fall off are a huge problem and taken seriously in manufacturing. Nothing pisses a customer off then them not knowing connector labels, module part number, etc
if you get bad labels then you better believe someone is gonna be taking that shit apart and putting new labels on it or making new paint marks etc -
Tariffs are one thing, managing purchases of overseas currency are another when currency can move +5% each day !
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But how can anyone prove the country of origin?
Policing and deterrence.
For tariffs according to the formula it doesn't really matter much though. The new originating country will get hit with increased tariffs next accounting period, so the tariffs still get paid. Origin fraud only matters for selective punative tariffs, not non selective tariffs for the entire world designed to bring trade balance. -
Excellent articles from Nate Silver (former FiveThirtyEight statistician & writer) on the tariff situation. These are free, you don't need his subscription.
...
https://www.natesilver.net/p/we-shouldnt-rely-on-markets-to-tame
That's looking at the wrong market; the stock market indicates what people think of (the future of) companies.
The 10year Treasury bond market indicates what investors think of the government, especially the risk of lending money to the government. That's become 10% worse (4.0%->4.4%) in the past week, an enormous shift.
What killed the UK's idiotic Liz Truss "reforms" was that they spooked the bond market; we are still feeling the bad effect in the form of increased debt repayment. -
Today the news is that Apple used six airplanes these days to ship 1.5 Mio iphones from
ChinaIndia to USA.
The US administration is cutting their country from an important supplier of cheap goods. Some called it slavery. Due to strange communication the US administration is also losing cheap international money and investors. The rates may rise to 10 % or more like we saw for other countries in a similar debt situation. Kind of a suicide.
Regards, Dieter -
Today the news is that Apple used six airplanes these days to ship 1.5 Mio iphones from China to USA.
The US administration is cutting their country from an important supplier of cheap goods. Some called it slavery. Due to strange communication the US administration is also losing cheap international money and investors. The rates may rise to 10 % or more like we saw for other countries in a similar debt situation. Kind of a suicide.
Regards, Dieter
As I understand it, Electronics (and many other things, but let's concentrate on electronics here), has historically, often been manufactured, in the cheapest possible country.
Trying to fight that fact, just leads to all sorts of (sometimes complicated) problems, such as the ones you detail.
Many things (in the past), coming into the UK, were made in Hong Kong (Electronics). Then later, places (not necessarily electronic, and I may not be 100% correct here, but certainly China did not use to be the main source of so many things, many decades ago) such as Thailand, India, Bangladesh, Japan and so on.
It is just that China have taken over, most or much of the low end (and increasingly higher end), of the market.
If China was to disappear from the globe. I'm sure other countries, such as India etc, would start similar low cost production. Which some sources, say has already begun.
Even when things are actually made in the UK, they tend to be made in the cheapest (for businesses), places, in the UK.
In summary, I think they (the current US administration), are trying to fight a losing battle. There are ways of tackling economic issues, such as trade balances. But sensible, strategies should be used, which may not be what appears to be taking place (opinions can vary, I think some/many in the US, still think the current administration, is doing a great job). -
No it's lockdown we're currently feeling the effect of. Truss' lunacy was quickly reversed. Boris's is still casting a long shadow.Excellent articles from Nate Silver (former FiveThirtyEight statistician & writer) on the tariff situation. These are free, you don't need his subscription.
...
https://www.natesilver.net/p/we-shouldnt-rely-on-markets-to-tame
That's looking at the wrong market; the stock market indicates what people think of (the future of) companies.
The 10year Treasury bond market indicates what investors think of the government, especially the risk of lending money to the government. That's become 10% worse (4.0%->4.4%) in the past week, an enormous shift.
What killed the UK's idiotic Liz Truss "reforms" was that they spooked the bond market; we are still feeling the bad effect in the form of increased debt repayment.
For things which can be sent by the post and are difficult to inspect, perhaps they should set a minimum tariff based on the weight of the goods from China. That would be much more difficult to circumvent.But how can anyone prove the country of origin?
Policing and deterrence.
For tariffs according to the formula it doesn't really matter much though. The new originating country will get hit with increased tariffs next accounting period, so the tariffs still get paid. Origin fraud only matters for selective punative tariffs, not non selective tariffs for the entire world designed to bring trade balance. -
No it's lockdown we're currently feeling the effect of. Truss' lunacy was quickly reversed. Boris's is still casting a long shadow.Excellent articles from Nate Silver (former FiveThirtyEight statistician & writer) on the tariff situation. These are free, you don't need his subscription.
...
https://www.natesilver.net/p/we-shouldnt-rely-on-markets-to-tame
That's looking at the wrong market; the stock market indicates what people think of (the future of) companies.
The 10year Treasury bond market indicates what investors think of the government, especially the risk of lending money to the government. That's become 10% worse (4.0%->4.4%) in the past week, an enormous shift.
What killed the UK's idiotic Liz Truss "reforms" was that they spooked the bond market; we are still feeling the bad effect in the form of increased debt repayment.
The consequences of Truss' idiotic reforms hit the bond market long after Johnson's idiocies - and continue to affect the bond market. The point is simple: our governance system was so dimwitted that Truss could make idiotic changes, hence our governance system is not as reliable and trustworthy as previously believed.
I would not bet against the same happening with the perception of President Chamberlain's "reforms". Compounded, of course, by his remarkable gutting of US science and hence the ability of the country to continue to be at the forefront.
China is more than willing to step up, and many Chinese people call Trump "the nation builder". Not the US nation, of course.
N.B. that has been happening since last year, e.g. https://timesofindia.indiatimes.com/world/us/chuan-jianguo-why-chinese-nationalists-are-cheering-for-donald-trump/articleshow/116293695.cms -
No.47's destruction of the US economy continues to give Europe and the UK a major advantage in the technology sector. If he does not back down soon, America will look less appealing to start ups and investors, especially VCs... Frankly, it's high time the investment world wasn't so US-heavy, so I welcome it. I'm just not so sure the voters will like it in the end, but it was their choice, he was very clear about his intentions.
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No.47's destruction of the US economy continues to give Europe and the UK a major advantage in the technology sector. If he does not back down soon, America will look less appealing to start ups and investors, especially VCs... Frankly, it's high time the investment world wasn't so US-heavy, so I welcome it. I'm just not so sure the voters will like it in the end, but it was their choice, he was very clear about his intentions.
Not really.
If someone, has a suitable budget available, perhaps $100,000,000,000. Found a suitable CEO to run it all. Then says to the new CEO, please go away and start up a brand new business, which I want, to be the biggest CPU/GPU/AI and other stuff, in the world, in ten years time.
The US, may well still be the best place (or at least on the short-list) to start it up and run it from.
Because Silicon Valley, or the current best place for stuff like this, in the US. Can have a wide range of engineers, with just the right sorts of experience. With further ones,poachablepossibly available from existing companies near and far, in the US, and ones who are happy to come and work in the US.
Just like Intel has done at various times. The best countries, for decent/quick/quality research and development, may not actually be situated in the US (the main research centres can be in the US, but extra world-wide ones may be needed, for bigger/massive teams), e.g. Ireland/UK/Israel/etc, the best/cheapest production sites, may not be the US, e.g. Mexico/Thailand/etc.
Along with some or a chunk of the markets, to be countries, other than (as well as), the US.
Yes, the new CEO could try and start it up, in the Falkland Islands or other places. But how many suitably capable/experienced engineers (and other specialties), would currently reside there, and/or work there and/or be willing to move to that country, without it costing an extortionate amount in salary, just to get them to move there.
In summary. It would be, being able to obtain the necessary (large) number of suitably experienced/capable people, in a relatively short space of time. in order to rapidly grow such a business. Many alternatives, have too few suitable engineers and might be less popular, for engineers (the right ones), to want to move there, such as if that country is not an English speaking country etc.
Edit: Made more generic + extra details. -
But it's all about the perception of stability. This is the real damage No.47 has caused. America no longer looks as stable and reliable for investors.
Look at it this way. He has said he'll raise tariffs if he doesn't get what he wants, and has demonstrated that he is willing to do so even in the face of economic consequences. He is actively involved in a trade war with a country which will not result in the stated desired outcomes.
He has also said that he is wanting to remain for a third term, and he wants to force all sorts of actions through executive order rather than congress and will disobey courts and judges.
-Even if- you politically agree these are the right things to do, that manufacturing has to return, the fact that he's disrupting the status quo of how things are done, that there is a process of consultation and discussion and debate before actions occur, and policy and strategy can be seen and predicted months ahead of time, means that there will be much less confidence in the reliability of the US as a future safe haven for investment.
This is reflected in US bond markets with yields soaring, the fall in the S&P500 (and the lack of a return to previous highs, despite the reversal of most tariffs), and the increase in investor uncertainty indices, like VIX. -
Nobody invests in a country at war. The US federal government appears broken. Just try to understand what DOGE is doing to the social security system. Other government agencies already disappeared.
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Because Silicon Valley, or the current best place for stuff like this, in the US. Can have a wide range of engineers, with just the right sorts of experience. With further ones,
poachablepossibly available from existing companies near and far, in the US, and ones who are happy to come and work in the US.
Currently the best place, maybe. In 10 years time when the effects of the gutting of US science are felt, not so much.
And, of course, add in all the incarcerations of tourists and (illegal) deportations of people with valid visas, and who would want to go there.
I worked happily for (decent) US companies for 20 years. Nowadays I would look elsewhere. -
But it's all about the perception of stability. This is the real damage No.47 has caused. America no longer looks as stable and reliable for investors.
Look at it this way. He has said he'll raise tariffs if he doesn't get what he wants, and has demonstrated that he is willing to do so even in the face of economic consequences. He is actively involved in a trade war with a country which will not result in the stated desired outcomes.
He has also said that he is wanting to remain for a third term, and he wants to force all sorts of actions through executive order rather than congress and will disobey courts and judges.
-Even if- you politically agree these are the right things to do, that manufacturing has to return, the fact that he's disrupting the status quo of how things are done, that there is a process of consultation and discussion and debate before actions occur, and policy and strategy can be seen and predicted months ahead of time, means that there will be much less confidence in the reliability of the US as a future safe haven for investment.
This is reflected in US bond markets with yields soaring, the fall in the S&P500 (and the lack of a return to previous highs, despite the reversal of most tariffs), and the increase in investor uncertainty indices, like VIX.
On reflection, I need to stoparm-chair drivingarm-chair, (thinking I'm a) top ranking economist etc, and admit.
Economics seems to be a very complicated subject area, and without revealing personal information, let's just say, I'm NOT an economist (unless arm-chair, back-seat self-appointed, ones count).
I still think the US has got a lot going for it, for businesses, big (especially) and small.
But the current climate (tariffs), seems to be (just as you are saying, if I understand things correctly), is not good for businesses, or (very likely), almost all of the population.
Except perhaps the super-rich, of the US.
But you are right, the US, is not looking good, on many fronts, at the moment. Hitting the news headlines, for bad, rather than good reasons.
On the one hand, the tariffs make some sense, to attempt to bring the US's balance of payments, down to sustainable levels. But on the other hand, the way the current US administration seems to have been handling the current tariffs, seems to be more of a wild circus, rather than a carefully controlled and planned, roll-out, of sensible tariffs.
China is going up and up in the world (it seems), and increasingly, some suspect (I think), may be the source of good/valuable things, in the future (and now, of course). Such as decent electric-cars, at good/decent prices.
So to alienate ones country (US) from it, and put up a significant wedge, may not be the best course of action.
Electronics is very important, to many industries. So an upcoming source of lots of electronics stuff, from components, to sub-assemblies, to oscilloscopes and electric vehicles, just to name a few. Often at very keen prices, and great availability. Should not necessarily be dismissed, and harmed by sky-high tariffs.
On the other hand, maybe some kind of restraint, on China, may be necessary.
So it is a tricky, double-edged sword, kind of situation, perhaps.
Also, the US want to succeed, in many or all of those (Electronics) industries, itself.
Further complicating things.
Edit: Typos