Let's discuss the "trade war", will it impact your biz?

[Walter Hay]

That wouldn't solve any problems. That'd be called transhipping since the country of origin is still China.

That'd open up biophase to jailtime and fines at 3x his profits.

You are right.

If anyone does that, the goods will still be subject to duty when they cross the border to the USA.

I see no gain in shipping via Canada because the country of origin of the goods must be declared, and this means the higher US tariffs will still apply.

Walter

 

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[Walter Hay]

HOW TO BEAT THE NEW TARIFFS ON CHINA MADE GOODS.

The answer is simple, and I have already provided it numerous times. Simply buy from manufacturers in a country that is not on the hit list.

There are a few enterprising members that have already done this, but it does involve more work. But then ….. isn’t this a forum for those willing to dig a bit harder to find that gold? See Post #5 on Page 1. Also for more detailed reasoning see: Manufacturing in Mexico - Pros/Cons

I'm actually working with my first non-Chinese manufacturer right now, and I've been pleasantly surprised:
2X the product strength/quality and 1/2 the price of any Chinese quotes I received.

Better quality and better prices! Why not take advantage of the possibilities?

@AgainstAllOdds gives a good answer to that question:

The reason everyone imports from China is the ease of doing business with China.
It doesn't take a genius to go on Alibaba, type in a random product, and find a supplier.
The biggest money comes from what's hard. Going the China route isn't hard.
The future's exciting.

He also sees the opportunity for what it is. The current doom and gloom should be replaced by an air of excitement. Be a maverick and escape now from the herd that can only go in one direction - China.

My 2018 book revision already widens the scope substantially for those willing to make the effort, and I am working on greatly increasing the sourcing options. The results will go out to all those who have already bought a copy of the book, regardless of how long ago they bought it.

I think there is huge opportunity sourcing products from other countries that aren't the norm.
While the majority of small-time importers be whining and crying because it isn't "easy," the ones that go out and make the connections with these other countries and potentially source products for other businesses/consumers will make a killing.
It's economic shifts like these where multimillionaires are made.

It's good to see someone thinking this through beyond the news headlines.

The big money to be made importing starts now.

I couldn't have said it better myself.

Walter

 

[mtnman]

That wouldn't solve any problems. That'd be called transhipping since the country of origin is still China.

That'd open up biophase to jailtime and fines at 3x his profits.

This is pretty limited thinking.

I'm not the expert on this, but I'm fairly certain you're giving bad advice here.

What will ultimately matter, is if the province tax where you choose to operate is less than the alternative. There are legal ways around everything else.

 

[Thoelt53]

This is pretty limited thinking.

I'm not the expert on this, but I'm fairly certain you're giving bad advice here.

What will ultimately matter, is if the province tax where you choose to operate is less than the alternative. There are legal ways around everything else.

Sure you can work around it. Plenty of people have.

But is it worth the risk?

Why risk your entire business when the more sensible (and probably more profitable) solution was put right in front of you?

 

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[Longinus]

This is pretty limited thinking.

I'm not the expert on this, but I'm fairly certain you're giving bad advice here.

What will ultimately matter, is if the province tax where you choose to operate is less than the alternative. There are legal ways around everything else.

If you're not an expert, why do you even argue with the experts here.

I hope everybody here is smart enough to not take this advice.

 

[AgainstAllOdds]

This is pretty limited thinking.

I'm not the expert on this, but I'm fairly certain you're giving bad advice here.

What will ultimately matter, is if the province tax where you choose to operate is less than the alternative. There are legal ways around everything else.

That's not limited thinking. It's simply following the law.

What you're advocating is tax evasion/transshipping/smuggling.

If you want to make money breaking the law, then there's thousands of ways easier than tax evasion.

And for anyone else reading, @mtnman is completely wrong on the topic and lacks even a basic knowledge of how importing works. Shipping through Canada does absolutely nothing other than increase your import time, costs, and if you get away with it - jailtime risk.

If you're going to break the law like @mtnman advocates, then you're a lot better off sending your container to Singapore, and changing the documents to a factory from another country. A lot less costly upfront, with the same jailtime and fines later on.

 

[amp0193]

If you're going to break the law like @mtnman advocates, then you're a lot better off sending your container to Singapore, and changing the documents to a factory from another country. A lot less costly upfront, with the same jailtime and fines later on.

Where I think there's some gray area here is if the product has many components, which are sourced from different locations.

If it has to be assembled somewhere, you could have all parts and components shipped elsewhere and get it assembled in a tariff-free country.

Even if most of the components are Chinese, when they all come together with everything else in Vietnam, the country of origin is going to be Vietnam.


Depends on the product. Depend on the percentages. But something I've been thinking about.

 

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[Walter Hay]

Where I think there's some gray area here is if the product has many components, which are sourced from different locations.

If it has to be assembled somewhere, you could have all parts and components shipped elsewhere and get it assembled in a tariff-free country.

Even if most of the components are Chinese, when they all come together with everything else in Vietnam, the country of origin is going to be Vietnam.


Depends on the product. Depend on the percentages. But something I've been thinking about.

Good thinking and worth exploring, but take care.
Walter

 

[WJK]

China has been riding on our back for their development. Yes, they are aggressive. Their weakness and is also their strength -- it's their central planning. Without a free market, they can't pivot with the markets as we do. Our successes and failures tend to organic. Our markets are a natural sorting progress. Their top-down planning can be more focused. This focus only counts when they make the right decisions.

In the short-term, China can manipulate their currency. The effects will only stave off the results of the tariffs. These thread replies tell me that the tariffs and bad press are already working in the USA's favor. People are taking their manufacturing business elsewhere.

China's soft underbelly is the short-sighted central planning that has depressed their domestic markets while creating the huge trade imbalances. They seem surprised that we are pushing back.

But, they didn't take corrective measures for their banking system during the international recession in 2008. They pumped money into public works program during that time to prop up their economy. They have a high percentage of public debt. Again, central planning has hogtied their future.

 

[mtnman]

Just wanted to come back and note that I was wrong above, and what I said is incorrect.

My intention was to not immediately shut the idea down like you guys were doing, and explore legit options, as there are legal ways around it.

The mistake I made was two fold: 1) being uninformed, 2) being way to general.

The proposed additional 15% hike in January, coupled with the existing 12%, will likely alter all of our opinions going forward at 27%.

Probably not the best topic of conversation on an open forum... If a mod can edit my comments so someone super green doesn't come along and take it as gospel, that would be wise. (I don't know how to do it, there is no edit button like there used to be)

 

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[Walter Hay]

Just wanted to come back and note that I was wrong above, and what I said is incorrect.

My intention was to not immediately shut the idea down like you guys were doing, and explore legit options, as there are legal ways around it.

The mistake I made was two fold: 1) being uninformed, 2) being way to general.

The proposed additional 15% hike in January, coupled with the existing 12%, will likely alter all of our opinions going forward at 27%.

Probably not the best topic of conversation on an open forum... If a mod can edit my comments so someone super green doesn't come along and take it as gospel, that would be wise. (I don't know how to do it, there is no edit button like there used to be)

The only legal way around it that I know of is to buy the products from a country that is not affected by the increased tariffs.

Walter

 

[Walter Hay]

In the short-term, China can manipulate their currency. The effects will only stave off the results of the tariffs. These thread replies tell me that the tariffs and bad press are already working in the USA's favor. People are taking their manufacturing business elsewhere.

On the subject of manufacturing elsewhere, there is an interesting article in Bloomberg today with the title:
Companies Say They're Ready to Move Supply Chains From China
Here's a brief extract from the article:
"Earnings reporting season is underway, and analysts are eager to hear from executives about how an escalating trade war between the U.S. and China is impacting their businesses. A common theme is that they are ready to relocate supply chains if the cost of importing Chinese goods becomes prohibitive."

They go on to report interviews with heads of a number of large corporations, and the overall impression I get is that at least some have been making contingency plans for quite a while.

You don't have to be a giant multinational to source from other parts of the world.

Many members will know that I have been advocating that for several years and it appears that some are now taking my advice seriously.

Walter

 

[Thomas Baptiste]

It's certainly a very interesting turn of events. An executive order has been signed that has some major repercussions in this trade war with China. The huge tech giant Huawei has been blacklisted, and thus banned from conducting business with US companies. If you're unaware at the time of this post, Huawei is the 2nd largest smartphone company globally. Recently, they have had some fantastic and competitive Android smartphones & windows laptops, however with this bill companies like Google (Android) & Microsoft (Windows) have had to pull their licenses from Huawei.

This is big news in the tech world as Huawei is a much needed vessel in the sea of overpriced tech. They are a healthy competitor in a market where the trends steer towards paying $1000+ for a new smartphone.

This just goes to show how the element of control is so fundamental to a business structure. They had no control over this turn of events and will now have to invest millions to avoid crashing completely.

How do you think this trade war will affect you/ your business?

 

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[MJ DeMarco]

It's certainly a very interesting turn of events. An executive order has been signed that has some major repercussions in this trade war with China. The huge tech giant Huawei has been blacklisted, and thus banned from conducting business with US companies. If you're unaware at the time of this post, Huawei is the 2nd largest smartphone company globally. Recently, they have had some fantastic and competitive Android smartphones & windows laptops, however with this bill companies like Google (Android) & Microsoft (Windows) have had to pull their licenses from Huawei.

This is big news in the tech world as Huawei is a much needed vessel in the sea of overpriced tech. They are a healthy competitor in a market where the trends steer towards paying $1000+ for a new smartphone.

This just goes to show how the element of control is so fundamental to a business structure. They had no control over this turn of events and will now have to invest millions to avoid crashing completely.

How do you think this trade war will affect you/ your business?

Thread moved, we have a topic on this already.

 

[Walter Hay]

My 2018 book revision already widens the scope substantially for those willing to make the effort, and I am working on greatly increasing the sourcing options. The results will go out to all those who have already bought a copy of the book, regardless of how long ago they bought it.

I should have updated this quite a while ago, but for the benefit of new readers on this thread, I am adding that my 2019 book revision now provides sourcing options in 41 countries, including China.

It is worth noting that countries embedded in the Asian supply chain providing components for Chinese manufacturers will be desperately looking for new customers. Those most affected are South Korea, Malaysia, and Taiwan.

Manufacturers in those countries should be sharpening their pencils when quoting, so my advice would be to do some gentle bargaining as per the method in my book.

Users of my book will find B2B sites for those countries there.

Walter

 

[Monica Rose]

Where I think there's some gray area here is if the product has many components, which are sourced from different locations.

If it has to be assembled somewhere, you could have all parts and components shipped elsewhere and get it assembled in a tariff-free country.

Even if most of the components are Chinese, when they all come together with everything else in Vietnam, the country of origin is going to be Vietnam.


Depends on the product. Depend on the percentages. But something I've been thinking about.

Our supplier of bed sheets has done this as the import duties from Chinese goods to Canada was roughly 20% so they had the sheets made in China and finished (hemmed) in Cambodia where there are no tariffs

 

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[Walter Hay]

Our supplier of bed sheets has done this as the import duties from Chinese goods to Canada was roughly 20% so they had the sheets made in China and finished (hemmed) in Cambodia where there are no tariffs

This works legally provided the required minimum input into the manufacture of the finished product reaches the prescribed %.

Walter

 

[Walter Hay]

With the announcement of the unpopular tariffs now being imposed on a range of consumer goods, margins for importers in the US will be tightened further.

I suggest that it is more urgent than ever for people wanting to import for profit to seriously explore the possibilities open to them in a large number of other manufacturing countries.

The advantages of doing so are much more than just avoiding high tariffs on imports. For an example see the post by @Valor.

I'm actually working with my first non-Chinese manufacturer right now, and I've been pleasantly surprised:

2X the product strength/quality and 1/2 the price of any Chinese quotes I received.

Other benefits can be:

• Locating products that have never been seen before in the USA.
• Dealing with suppliers much more fluent in English.
• Having your own designs made with far less risk of IP theft.
• Buying from manufacturers who don't cut corners. E.g., Using plated mild steel and calling it stainless steel.
• Buying from manufacturers who haven't been forced to adopt poor quality standards just to satisfy the demands of big stores.
• Minimizing risks of buying products that don't comply with standards.
• Locating products that are original designs rather than copies.

You can search for country specific B2B sites, but beware! Many that purport to be government sites or government sponsored sites are havens for scammers. Most sites that are easy to find are commodity exchanges with wheeler dealers posting their buy/sell offers.

Those who have my 2019 book will benefit from the fact that I have done the hard yards, and found the genuine, trustworthy sites. BUT ..... Don't just file it away. At least go to a country of interest and BROWSE categories of interest. Profitable discoveries await.

Walter
P.S. This not a long thread. I think it is worth reading right through.

 

[WJK]

With the announcement of the unpopular tariffs now being imposed on a range of consumer goods, margins for importers in the US will be tightened further.

You have inserted your opinions as universal truths. Are you sure about the "unpopular' part -- or that they will "tighten" the US margins? I'm going to hide and watch where the market goes in response.

 

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[Roli]

You guys are going to have to do what the Chinese will, and that's wait 4.5 years till he's gone.

 

[WJK]

Polls have consistently indicated that about 50% of American think tariffs will hurt the economy. I don't know if that qualifies as "unpopular" or not -- you guys can debate that if you want.



If you believe economists, then yes, they will tighten US margins...or at very least, reduce profits...

Tariffs on all Chinese goods could cut corporate profits by 6%, Goldman forecasts

Should President Trump follow through on threats to put tariffs on virtually all Chinese imports, it could have a significant impact on the bottom line for American companies.

www.cnbc.com

If nothing else, tariffs have already led to a major decline in manufacturing demand, which has crippled US manufacturing and led to slowing GDP growth.

U.S. manufacturing ‘is in recession,’ Fed’s data show

Manufacturing slumped in the three months ended in June for the second straight quarterly decline, the Federal Reserve said Tuesday.

www.marketwatch.com

Yes, agree that there will some short term pain from the tariffs. But, I'm seeing the stats indicating that it's hurting the Chinese a lot more than it's hurting us. I tend to take the long view on things. I've seen what moving our manufacturing to China and off-shore has done to the US. When I was a kid, there was a lot of people who made things. Yes, a lot of the jobs coming back to the States are different since there are robots to do a lot of the repetitive work. Over my lifetime, I've seen so many changes -- Civil Rights -- Women's Movement -- The Fair Credit Act -- computers and all the stuff that comes with them -- monetizing the real estate market through the international markets -- the globalization of corporations and manufacturing -- etc. The pace of change is head spinning.

 

[Longinus]

Yes, agree that there will some short term pain from the tariffs. But, I'm seeing the stats indicating that it's hurting the Chinese a lot more than it's hurting us. I tend to take the long view on things. I've seen what moving our manufacturing to China and off-shore has done to the US. When I was a kid, there was a lot of people who made things. Yes, a lot of the jobs coming back to the States are different since there are robots to do a lot of the repetitive work. Over my lifetime, I've seen so many changes -- Civil Rights -- Women's Movement -- The Fair Credit Act -- computers and all the stuff that comes with them -- monetizing the real estate market through the international markets -- the globalization of corporations and manufacturing -- etc. The pace of change is head spinning.

So what's your point now? Want to make Murica great again by going 50 years back in time? Quit the nostalgia, people were complaining back then as well about how everything was better in the early days.

Besides, a lot the offshore manufacturing has turned a lot of American companies into world players in a very short time.

 

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[G-Man]

To answer the original question: The tariffs seem to have driven up the prices of the refurbished electronics I sell in my day job, but the quality has also gone consistently up over the same time span, so it's hard to really know causality. I've had an almost impossible time finding some parts, but other than that, things are better.

I have nothing to say about the macroeconomic implications of large scale game changers like this, and TBH, no one else does either. Why we have to give economists and market analysts more respect than palm readers and televangelists I'll never understand. They're right about as often, and their motives are often just as spurious.

That said, I have fundamental faith in the innovative capacity of the American entrepreneur. I think that the long game of this is people will figure out better ways to do things.

Example: It used to be a lot cheaper to send units to China and India to have LCDs replaced, or to import replacement LCDs and have techs put them on here. Someone in Texas created a new process for refinishing existing LCDs without taking them off of the units, as most LCD replacement is because of scratches instead of function. The result: the consumer gets a bright and shiny scratch free LCD without anyone having to manufacture a new one, or ship anything back and forth half way across the world.

 

[WJK]

So what's your point now? Want to make Murica great again by going 50 years back in time? Quit the nostalgia, people were complaining back then as well about how everything was better in the early days.

Besides, a lot the offshore manufacturing has turned a lot of American companies into world players in a very short time.

No, I don't want to go back 50 years. I want a level playing field. We have been stupid as a country with the way we've been trading with others. The game of war has changed from the World Wars with boots on the ground to a daily grind of "who is the better businessman." The US has always been good at business -- and then we got fat and lazy. We were too big to fail? Now we really need to pay attention to what we're doing and how we're doing it. And that was my point. We must be long-term smarter in our decisions.

 

[G-Man]

Probably one of the more ridiculous things I've read on this forum.

Economics is like any other scientific field, though less mature than many fields as it's been around for a much shorter duration and is much more difficult to test hypotheses.

The principles of modern medicine go back millenia. Likewise with astronomy, physics, math, biology, etc. Economics -- while there were some writings as far back as ancient Greece -- wasn't seriously embraced as a field of study until the middle ages, and the bulk of economic writing is from just the past few centuries. And the number of test cases for other fields measure in the millions, while economics can't easily be modeled/tested on a large scale outside of real world implementation.

Economists are continually gathering data, testing hypotheses, modeling and making predictions. When those predictions pan out, they are given more weight and continued to be tested. When they don't, they're thrown out and we start over. No different than any scientific endeavor.

To compare that to palm readers is simply ludicrous.

That said, I guess I can understand how a lack of education in the field can lead someone to that belief.

It's sarcasm @JScott

I'm not a PhD, but I'm not uneducated in it either. My undergrad was International Finance from the most competitive program in the country, and I read more actual books (not articles or blog posts) on economics than about anyone. My sarcasm comes from the fact that the more I learn, the more convinced I am that nobody can predict or design anything. Go read some Hayek and tell me how uneducated I am.

Sometimes ridiculousness is intentional

EDIT: I'm sorry if this comes of an confrontational, because you're probably one of the most measured posters on here, but I'm not a fan of the passive aggression at the end. I'll admit when I have no idea what people are talking about, like when you talk about bitcoin, or @lowtek is perpetually talking about science that's way over my head. Perhaps when I'm being sarcastic it doesn't always come across clearly to strangers on an internet forum, which is probably something I can be more cognizant of.

 

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[Walter Hay]

This thread has taken a turn well away from the question that started it.

I am not interested in the economics, although as an international businessman I have a good understanding of the subject.

I am not interested in the politics or the strategic implications.

The major issue as far as I am concerned is that yes, it will, and already has impacted many businesses, notably those that import.

My message is that problems are opportunities waiting to be solved, and for those who import the solution is simple: Buy from countries other than China (or the others whose exports are now affected.)

Unless this situation is recognized as the great opportunity that it is, many will be left behind.

Walter

 

[Champion]

Thanks for posting, extremely useful and concise information in one place! Time to brainstorm how this can be taken advantage of now

 

[elijahfry]

Thus far, here is a list of effected industries.

Trade war tracker:
Trade-war tracker: Here are the new levies, imposed and threatened

View attachment 20126

And this afternoon, more tariffs potentially planned ($200B worth), not yet known where.

U.S. Poised to Publish $200 Billion China Tariff List

If you're an importer, are you worried?

Feel free to discuss.

PLEASE KEEP POLITICS OUT.

This will not be a discussion on the trade policy itself and whether it a bad idea, good idea, or somewhere in between.

Maybe I’m off, but wouldn’t a thing like this be good long in the long term in the sense that it would help prevent a total crash? The economy is likely not going to totally collapse if some strain is put on it like this. Yes it sucks but it’s better than Wall Street collapsing.

 

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[AgainstAllOdds]

This thread has taken a turn well away from the question that started it.

I am not interested in the economics, although as an international businessman I have a good understanding of the subject.

I am not interested in the politics or the strategic implications.

The major issue as far as I am concerned is that yes, it will, and already has impacted many businesses, notably those that import.

My message is that problems are opportunities waiting to be solved, and for those who import the solution is simple: Buy from countries other than China (or the others whose exports are now affected.)

Unless this situation is recognized as the great opportunity that it is, many will be left behind.

Walter

I couldn't have said it better.