The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

If you import from China, this may be relevant.

Become a Fastlane INSIDER to view the forum ad free.

Frank H.

Contributor
Read Millionaire Fastlane
Dec 22, 2018
69
70
115
This is another policy that makes my blood boil! I know that there are more important issues, however, this one is painful for my business. A friend and I did a lot of research on a niche and found ten products that we took risks on and made a lot of innovations on. We ordered many samples and it took us a lot of time and energy to innovate the products. Now we have to import from other countries because the labor costs are too expensive in North America.
 

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
This is raising taxes. Pure and simple.

Not sure why Republicans cheer him on and Democrats get mad. I am never in favor of the government seizing money out of the economy.

And for what? What is that money going to go to? Not American manufacturing jobs. Just the black hole.
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
This is raising taxes. Pure and simple.

Not sure why Republicans cheer him on and Democrats get mad. I am never in favor of the government seizing money out of the economy.

And for what? What is that money going to go to? Not American manufacturing jobs. Just the black hole.
It's negotiation and game theory at its finest.

China wants to wait off closer to the election to figure out whether or not Trump is getting re-elected. Meanwhile Trump is forcing them to make a decision now. Either they take the deal that he's offering, or they risk being screwed for 5 more years assuming he wins in 2020.

Personally, I'm 100% behind the tariffs. China will cave before the U.S. (Trump) does.


An individual whose opinion I admire on the topic is Marty Davis from Cambria. Essentially, his main point is like all economists, that economics supports free trade. However, you cannot have free trade without fair trade (lack of subsidies, excess of government loans, free electricity, currency manipulation, etc.).

What Trump is doing is enforcing fair trade in order to allow for free trade. Tariffs are an enforcement tool, and Trump is using it as such.

These tariffs are really low risk, really high reward in terms of getting China to do what the U.S. wants.
 
Last edited:

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
This is another policy that makes my blood boil! I know that there are more important issues, however, this one is painful for my business. A friend and I did a lot of research on a niche and found ten products that we took risks on and made a lot of innovations on. We ordered many samples and it took us a lot of time and energy to innovate the products. Now we have to import from other countries because the labor costs are too expensive in North America.
You've positioned yourself wrong.

In my business, the Trump tariffs are going to add around $100,000 in tariffs to machinery we want to import, and affect 15% of the products we're selling.

For the other 85%, we're going to kill it. Why? Because we built a business that's not reliant on China - especially when the president has week after week said that he's going to put tariffs on China. There's individuals that source solely from China... and now they're F*cked. Meanwhile we're going to bite away at their market share bit by bit until Trump takes away the tariffs.

Note: My take is that this is a phantom trade war. The 25% tariffs won't go into effect for long.

For your business: Ask yourself where everyone is buying from. If it's China, then your innovations will allow for a 25% revenue increase. If it's not China, then you better start searching for another supplier - and quick.
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Speedway Pass
Sep 13, 2014
2,131
8,668
1,953
80
World citizen
www.provenchinasourcing.com
You've positioned yourself wrong.

In my business, the Trump tariffs are going to add around $100,000 in tariffs to machinery we want to import, and affect 15% of the products we're selling.

For the other 85%, we're going to kill it. Why? Because we built a business that's not reliant on China - especially when the president has week after week said that he's going to put tariffs on China. There's individuals that source solely from China... and now they're F*cked. Meanwhile we're going to bite away at their market share bit by bit until Trump takes away the tariffs.

Note: My take is that this is a phantom trade war. The 25% tariffs won't go into effect for long.

For your business: Ask yourself where everyone is buying from. If it's China, then your innovations will allow for a 25% revenue increase. If it's not China, then you better start searching for another supplier - and quick.
@AgainstAllOdds I couldn't have said it better myself.

If I may be permitted to boast a little, I have been several years ahead of the game. My sourcing and importing book editions 2017, 2018 and 2019 have all promoted the desirability of sourcing from countries other than China, and provided genuine B2B links to many exporting countries.

Unfortunately, complacency and laziness have kept thousands wedded to China suppliers, and they are now paying the price.

I posted this in Oct. 22, 2014 in my AMA thread:
I have directed many people to other countries where they have been able to obtain better quality at the same price as in China, or sometimes they have bought similar quality but at a lower price. In some cases they have found unique products not produced in China.

Sourcing from China is easy, although many people get burnt for that very reason. They think it is so easy that they can be careless about sourcing. They treat it as casually as buying from their local store and they blindly accept everything they read on B2B sourcing sites.

Sourcing from other countries will require greater expertise, but I have taught many people how to do it. Those who do begin sourcing in other countries may well be one step ahead of the competition in a few years’ time.

Walter
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
@AgainstAllOdds I couldn't have said it better myself.

If I may be permitted to boast a little, I have been several years ahead of the game. My sourcing and importing book editions 2017, 2018 and 2019 have all promoted the desirability of sourcing from countries other than China, and provided genuine B2B links to many exporting countries.

Unfortunately, complacency and laziness have kept thousands wedded to China suppliers, and they are now paying the price.

I posted this in Oct. 22, 2014 in my AMA thread:
I have directed many people to other countries where they have been able to obtain better quality at the same price as in China, or sometimes they have bought similar quality but at a lower price. In some cases they have found unique products not produced in China.

Sourcing from China is easy, although many people get burnt for that very reason. They think it is so easy that they can be careless about sourcing. They treat it as casually as buying from their local store and they blindly accept everything they read on B2B sourcing sites.

Sourcing from other countries will require greater expertise, but I have taught many people how to do it. Those who do begin sourcing in other countries may well be one step ahead of the competition in a few years’ time.

Walter
To build on that, sourcing from China is laughable without the tariffs.

The opportunities for most products aren't in China anymore. China's just "easy".

Take the tariffs away, and I can still source non-subsidized goods 20% cheaper outside of China.
 

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
It's negotiation and game theory at its finest.

China wants to wait off closer to the election to figure out whether or not Trump is getting re-elected. Meanwhile Trump is forcing them to make a decision now. Either they take the deal that he's offering, or they risk being screwed for 5 more years assuming he wins in 2020.

Personally, I'm 100% behind the tariffs. China will cave before the U.S. (Trump) does.


An individual whose opinion I admire on the topic is Marty Davis from Cambria. Essentially, his main point is like all economists, that economics supports free trade. However, you cannot have free trade without fair trade (lack of subsidies, excess of government loans, free electricity, currency manipulation, etc.).

What Trump is doing is enforcing fair trade in order to allow for free trade. Tariffs are an enforcement tool, and Trump is using it as such.

These tariffs are really low risk, really high reward in terms of getting China to do what the U.S. wants.
I understand that a lot of folks think that it is all about negotiation. It very well could be an exercise to make trade more free. If that is the case, ok. I fully agree with making trade more free.

The problem is, he hasn't explicitly said it because it would ruin his negotiating leverage.

Call me old fashioned, but I tend to believe the words that come flying out of a POTUS mouth with no teleprompter against his advisors' strong suggestions to tamp it down...

Trump shooting from the hip "I am a tariff man." Me listening "I guess he likes tariffs." Getting this elaborate negotiation narrative out of what he has said is putting words in his mouth.

Now there is a fork in the road here.

You either trust the government knows what is best for us.
-or-
Question it because they have given us every reason to.

I do know there is nothing as permanent as a temporary government program.

What do tariffs really do? They intentionally add 1:1 inneficencies to the supply chain of importers in order to "make domestic companies more competitive."

What is the ripple effect? They put US companies on the government tit. They aren't built to withstand global competition and they aren't forced to innovate or improve processes. Why? Because they don't have to. It stagnates growth of the very industries it is designed to help letting the rest of the world pull further and further ahead. Isolating us totally backfires.

If it is all a negotiating scheme... I will be happy to see all of this roll back to some very favorable terms of international trade.

In the interim. Tariffs are taxes and I am never going to believe direct government created inefficiencies are pro-business policy. It makes government richer at the direct expense of business.

By the way... For those of you wondering, yes I am a Trump supporter. My wife and I go to an event at his home once a year... This isn't coming from a "Never Trumper" or a Democrat.

I totally agree with @Walter Hay about how China is maturing and there is opportunity elsewhere. When I was primarily importing, it was out of Mexico.
 
Last edited:

MJ DeMarco

Administrator
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 23, 2007
28,359
95,081
3,751
Fountain Hills, AZ
getUnscripted.com
I don't think China will cave.

The beauty of communism is all they have to do is be patient and wait for a new president, either D or R. That will be in 20 months or in 4 years. If they watch American news, they probably think the chances of DJT being reelected is slim and none. So why bother when they can just delay, delay, delay...
 

The-J

Legendary Contributor
EPIC CONTRIBUTOR
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Aug 28, 2011
3,467
7,771
1,736
Ontario
Call me old fashioned, but I tend to believe the words that come flying out of a POTUS mouth with no teleprompter against his advisors' strong suggestions to tamp it down.

Trump shooting from the hip "I am a tariff man." Me listening "I guess he likes tariffs." Getting this elaborate negotiation narrative out of what he has said is putting words in his mouth.

Now there is a fork in the road here.

You either trust the government knows what is best for us.
-or-
Question it because they have given us every reason to.

I do know there is nothing as permanent as a temporary government program.

What do tariffs really do? They literally add 1:1 inneficencies to the supply chain of importers in order to "make domestic companies more competitive."

What is the ripple effect? They put US companies on the government tit. They aren't built to withstand global competition and they aren't forced to innovate or improve processes. Why? Because they dont have to. It stagnates growth of the very industries it is designed to help letting the rest of the world pull further and further ahead. Isolating us totally backfires.

If it is all a negotiating scheme... I will be happy to see all of this roll back to some very favorable terms of international trade.

In the interim. Tariffs are taxes and I am never going to believe direct government created inefficiencies are pro-business policy.

By the way... For those of you wondering, yes I am a Trump supporter. My wife and I go to an event at his home once a year... This isn't coming from a "Never Trumper" or a Democrat.
Rep+++ for being willing to say when the president/party you support is doing things that you disagree with and thus being consistent with what you actually believe.

Tariffs hurt businesses by raising costs, plain and simple. The proper response by US businesses is to find another place to source from, and the proper response by Chinese businesses is to find ways around the tariffs. They will, and they will.

Not saying that paying the 25% tariff is bad if you're unable to source from elsewhere and you can still make it work. If you can't, though, you're going to either find another sourcing country or you're going to have a bad time.
 

Become a Fastlane INSIDER to view the forum ad free.

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
I filmed this video for the forum because I wanted to show an example of where value goes to die. What starts as a pretty lucrative deal becomes....


This is close in numbers to a deal was recently considering. The one thing I have made in China. The tariffs would have popped up during the production process. It would have already been in motion. I would have also had to carry nearly 50 grand of this gross deal for 120 days if everything went smoothly. For 6 grand that I would get to keep. This deal died on timing, the client drug feet on a down payment to the point where I wasn't comfortable with their delivery schedule... I am sure glad that happened.

That 25% doesn't sound like much, but it is HUGE when it is slapped right in the middle of a supply chain. My effective tax rate on this deal would have been 70%.

You get 6 thousand dollars for your hard work and risk.

The government gets 14 thousand because you'll go to jail if you don't.
 
Last edited:

404profound

Platinum Contributor
I've Read UNSCRIPTED
Speedway Pass
Aug 27, 2017
1,268
2,597
658
Desert of Desertion
I filmed this video for the forum because I wanted to show an example of where value goes to die. What starts as a pretty lucrative deal becomes....


This is close in numbers to a deal was recently considering. The one thing I have made in China. The tarrifs would have popped up during the production process. It would have already been in motion. I would have also had to carry nearly 50 grand of this gross deal for 120 days if everything went smoothly. For 6 grand that I would get to keep. This deal died on timing, the client drug feet on a down payment to the point where I wasn't comfortable with their delivery schedule... I am sure glad that happened.

That 25% doesn't sound like much, but it is HUGE when it is slapped right in the middle of a supply chain. My effective tax rate on this deal would have been 70%.
Holy shit, that's worse than the mob.
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
Getting this elaborate negotiation narrative out of what he has said is putting words in his mouth.
For me, one of the easiest ways to understand Trump was reading his books - especially The Art of the Deal.

He lays out exactly how he negotiates and thinks page by page. The negotiation narrative is aligned with his books, so I wouldn't call it "putting words in his mouth". He simply acts how he historically said he would act.
 

Ocean Man

How may I provide value?
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Sep 26, 2018
122
140
130
I filmed this video for the forum because I wanted to show an example of where value goes to die. What starts as a pretty lucrative deal becomes....


This is close in numbers to a deal was recently considering. The one thing I have made in China. The tariffs would have popped up during the production process. It would have already been in motion. I would have also had to carry nearly 50 grand of this gross deal for 120 days if everything went smoothly. For 6 grand that I would get to keep. This deal died on timing, the client drug feet on a down payment to the point where I wasn't comfortable with their delivery schedule... I am sure glad that happened.

That 25% doesn't sound like much, but it is HUGE when it is slapped right in the middle of a supply chain. My effective tax rate on this deal would have been 70%.
Wow... Thanks for breaking it down @Kak. That's outrageous. $60,000 of value, what's your return? $6,000...
 

socaldude

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Jan 10, 2012
1,290
2,938
681
Mexico
The optimal strategy in game theory is always tit-for-tat.

At this point we are heading for a trade war.

Remember China is communist, I'm not entirely familiar with china but based off my experience the politics there are very machiavellian.
 

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
Wow... Thanks for breaking it down @Kak. That's outrageous. $60,000 of value, what's your return? $6,000...
Not only that... The big issue is that we started with a 20k spread! That is actually pretty great on a 60k order.

It really just shows how ugly tariffs are relative to other taxes. They are arbitrarily slapped on a number in the middle of a supply chain.

Had the landed cost been 50k and expected profits had been 10k... Our effective tax rate would have been 125%... What does that mean for the bigger picture? A voluntary, capitalistic, exchange of value couldn't take place... Only because of the government.

I can show this on video too if it will help understanding.

Holy shit, that's worse than the mob.
When you really think about it... What is the difference?
 
Last edited:

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Speedway Pass
Sep 13, 2014
2,131
8,668
1,953
80
World citizen
www.provenchinasourcing.com
@Kak, it's a pity you don't write for CNN. You made it all much clearer than the rather amateurish article linked by the OP. It was obvious that she knew practically nothing about importing.

Walter
 

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
@Kak, it's a pity you don't write for CNN. You made it all much clearer than the rather amateurish article linked by the OP. It was obvious that she knew practically nothing about importing.

Walter
I'd love for CNN to call and give me a show.
 

Vigilante

Legendary Contributor
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Oct 31, 2011
9,821
56,955
4,655
Gulf Coast

Become a Fastlane INSIDER to view the forum ad free.

Frank H.

Contributor
Read Millionaire Fastlane
Dec 22, 2018
69
70
115
Good posts! I strongly disagree with this policy because North American Manufacturing died 35 years ago, the big companies will still source from their pals in other countries, and the tariffs disproportionally hurt entrepreneurs and small businesses. The first point has been said a billion times, however, I could find sources if needed. Secondly, the big companies will simply network with other countries (Philippines, India, Taiwan) and source from there. Also, there should be a progressive tax on the tariffs, so goods that are worth 25k should have a tariff of 5%, 50k, 10%, 100k, 15% 250k, 25%.

Furthermore, we should put more effort into having stronger bonds with China. We all know they are mediocre with human rights, however, they outnumber us 4-1 and will be an economic powerhouse in 10 - 15 years. My brand makes a lot of risky innovations that the big companies are afraid to make and it is difficult to find manufacturers in North America that will make these risky innovations for a reasonable price. I am looking forward to original and creative counterpoints. If it has been said before, please do not say it.
 

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
Screenshot_20190512-081229_Messages.jpg

Should I assume he likes tariffs yet?
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
I filmed this video for the forum because I wanted to show an example of where value goes to die. What starts as a pretty lucrative deal becomes....


This is close in numbers to a deal was recently considering. The one thing I have made in China. The tariffs would have popped up during the production process. It would have already been in motion. I would have also had to carry nearly 50 grand of this gross deal for 120 days if everything went smoothly. For 6 grand that I would get to keep. This deal died on timing, the client drug feet on a down payment to the point where I wasn't comfortable with their delivery schedule... I am sure glad that happened.

That 25% doesn't sound like much, but it is HUGE when it is slapped right in the middle of a supply chain. My effective tax rate on this deal would have been 70%.

You get 6 thousand dollars for your hard work and risk.

The government gets 14 thousand because you'll go to jail if you don't.
I just watched your video and had to create my own response.


What your video is missing is the opportunity that was created by these tariffs. Companies that have been better prepared will gain more market share and knockout the competition. This is every entrepreneur's wet dream. The entrepreneurs that know how to source, and are willing to put the work in to create a new supply, are the ones that are going to dominate the market.

The ones that are going to lose are the ones that are scared of change, ignorant, lazy or busy, and stuck in their ways.

On top of that, this tariff is something that everyone could've prepared for. It wasn't out of the blue. Trump has been saying that he'll put taxes on China for at least 8 years now. Here's a video of him from 2011:


These tariffs are a matter of perspective. The perspective I choose is that they're an opportunity. Whether you consider this an opportunity or "extra tax" is up to you.
 

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
I just watched your video and had to create my own response.


What your video is missing is the opportunity that was created by these tariffs. Companies that have been better prepared will gain more market share and knockout the competition. This is every entrepreneur's wet dream. The entrepreneurs that know how to source, and are willing to put the work in to create a new supply, are the ones that are going to dominate the market.

The ones that are going to lose are the ones that are scared of change, ignorant, lazy or busy, and stuck in their ways.

On top of that, this tariff is something that everyone could've prepared for. It wasn't out of the blue. Trump has been saying that he'll put taxes on China for at least 8 years now. Here's a video of him from 2011:


These tariffs are a matter of perspective. The perspective I choose is that they're an opportunity. Whether you consider this an opportunity or "extra tax" is up to you.
You are absolutely 100% correct. They are a matter of perspective. We both have a different angle we are viewing it from, but when I stand by you, I agree 100%.

From a managerial side... Yes, this is a massive opportunity. Yes, our response to tariffs needs to be quick and unfettered. Yes, that is what can shift things up and put different firms in different places.

The smart entrepreneur needs to navigate shit like this, and often times this can be very good for the people that do.

Now, stand over here by me. I have been looking at the policy perspective.

I am NOT a big importer, but I do import from time to time and it sits as a tool in my tool box. I can easily look in other countries. Not a big deal for me, but I would have been pretty pissed off to be caught in a deal like the one in my video, and it could have been worse.

My issue is that not all bigger stable companies have the option to switch crap around. They might have a really great supply chain, a value forward business and are now bending over for this. It may take months for a medium sized company to heal or learn to like the way it feels. That may be fun for the little guy to watch, but we all hope to be the big guy some day. Government punishing business makes me ill.

What is this from my policy sided view? A destruction of value, a very high tax, and a strongly anti-business policy.

We are both right. You are glass half full and I am glass half empty. The opportunity this brings is subsidy so I’m not going to cheer it on.
 
Last edited:

ZF Lee

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jul 27, 2016
1,905
3,351
771
20
Malaysia
I don't think China will cave.

The beauty of communism is all they have to do is be patient and wait for a new president, either D or R. That will be in 20 months or in 4 years. If they watch American news, they probably think the chances of DJT being reelected is slim and none. So why bother when they can just delay, delay, delay...
They don't really practice Communism, with its open market policy at all.

A bit of history...

When Deng Xiaoping, the strongman who reversed the past disastrous Mao policies took over, he had to convince the Red folks to begin moving closer to capitalistic routes. So, he titled his new philosophy 'socialism with Chinese characters', which simply means in a nutshell socialism adapted to the Chinese problems with their market value system.

But yes, they can delay.
They've got plenty of Asian countries around them to buy and sell stuff without tariff fears.
It's not as if they'd go hungry and impoverished with more US tariffs...

As for reelection, from an outsider's POV, I don't think global affairs are the only thing to determine voter decisions. There's also local affairs and policies that voters think of.

For some reasons, it reminds me to look back in history at Japan, who used to be in China's shoes as a rising Asian power, what with the Russo-Japanese conflicts, Meiji restoration and all...

The optimal strategy in game theory is always tit-for-tat.

At this point we are heading for a trade war.

Remember China is communist, I'm not entirely familiar with china but based off my experience the politics there are very machiavellian.
Yes, machiavellian.

Consider that 50 years ago, the Chinese were fighting a massive civil war that killed MILLIONS. It's not that long ago. Such an event has put in the people a drive to fight for survival every day, even though China is not as battle-torn as it used to be.

That is why here in Malaysia, mainland investors and girls brings a lot of worries, even over handshakes and drinks. You just don't know whether they are friends or cheaters.

Plus, the power of the law is much more enforced in Chinese culture. We have the Confucius call for moral governance and piety on the 'nicer end' of the paradigm, only to be faced off by the legalism of the Shi-Huang Di time. So laws have become tools to play with.


It's negotiation and game theory at its finest.

China wants to wait off closer to the election to figure out whether or not Trump is getting re-elected. Meanwhile Trump is forcing them to make a decision now. Either they take the deal that he's offering, or they risk being screwed for 5 more years assuming he wins in 2020.

Personally, I'm 100% behind the tariffs. China will cave before the U.S. (Trump) does.


An individual whose opinion I admire on the topic is Marty Davis from Cambria. Essentially, his main point is like all economists, that economics supports free trade. However, you cannot have free trade without fair trade (lack of subsidies, excess of government loans, free electricity, currency manipulation, etc.).

What Trump is doing is enforcing fair trade in order to allow for free trade. Tariffs are an enforcement tool, and Trump is using it as such.

These tariffs are really low risk, really high reward in terms of getting China to do what the U.S. wants.
I really had high hopes that the US-China talks would reach some kind of agreement.

Some of my Chinese relatives have been sounding rather anti-American in the last Chinese New Year reunion, and this makes me ill, considering you guys aren't a bad bunch! :(
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
I really had high hopes that the US-China talks would reach some kind of agreement.

Some of my Chinese relatives have been sounding rather anti-American in the last Chinese New Year reunion, and this makes me ill, considering you guys aren't a bad bunch! :(
You realize this news is amazing for countries like yours (Malaysia), right?

The longer a trade-war goes on between the U.S. and China, the more countries south of China benefit. New Chinese factories, investment, etc. Meanwhile whichever factories you have in the region competing against China can be more competitive.
 

ZF Lee

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jul 27, 2016
1,905
3,351
771
20
Malaysia
You realize this news is amazing for countries like yours (Malaysia), right?

The longer a trade-war goes on between the U.S. and China, the more countries south of China benefit. New Chinese factories, investment, etc. Meanwhile whichever factories you have in the region competing against China can be more competitive.
Yes, of course.

That's why I'm not as worried of doing business locally, as before.
We've been always been on the sidelines, when it comes to choosing which world power to support.

I just hope the US-China conflict doesn't lead up to an actual armed conflict that endangers world peace.
 

James Fend

Gold Contributor
FASTLANE INSIDER
Speedway Pass
May 4, 2009
1,221
1,517
521
Las Vegas, NV
www.feedbackz.com
At the end of the day; no matter what party or perspective.. this hurts everybody.

But most importantly, the brunt of it WILL fall on consumers,.. which is just another small invisible dot that lines up to a bigger picture... a reset.. aka a global recession. Things way out of balance, innovation stalled from reaching the ceiling of current tech infrastructure, etc etc.

It's inevitable..
And I'm just sitting here patiently waiting licking my chops!
 
Last edited:

biophase

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 25, 2007
6,364
28,287
5,083
Scottsdale, AZ
I just watched your video and had to create my own response.


What your video is missing is the opportunity that was created by these tariffs. Companies that have been better prepared will gain more market share and knockout the competition. This is every entrepreneur's wet dream. The entrepreneurs that know how to source, and are willing to put the work in to create a new supply, are the ones that are going to dominate the market.

The ones that are going to lose are the ones that are scared of change, ignorant, lazy or busy, and stuck in their ways.

On top of that, this tariff is something that everyone could've prepared for. It wasn't out of the blue. Trump has been saying that he'll put taxes on China for at least 8 years now. Here's a video of him from 2011:


These tariffs are a matter of perspective. The perspective I choose is that they're an opportunity. Whether you consider this an opportunity or "extra tax" is up to you.
Your video doesn’t make any sense to me. Basically you are saying just import from another company that is cheaper. Well you can do this whether or not there is or is not a tariff on China as a competitive advantage.

We can all play the manufacture in a different country game. What if instead of the tariff of being a country specific tariff it becomes a product specific tariff. So you’re specific widget is taxed at 25% no matter what country it is made. Then Kak’s video applies and the product price goes up.

Personally I’m staying with China. I’ve got a good setup there and can wait this out.
 

Kak

Capitalist Swine
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jan 23, 2011
5,165
19,570
4,004
No suprise there either. A micro move on a macro market. It will be back when the dust settles. Still sucks in the interim.

For those of us with decent sized portfolios moving everything fast enough not the get rammed in the a$$ is unrealistic...

But the lite investor will say things like "just buy the dip." Or "trade the vix."

If I could physically buy the dip strong enough to replace the money I lost this morning, I'd have too much cash that isn't working for me.
 

Antti

New Contributor
FASTLANE INSIDER
I've Read UNSCRIPTED
Dec 21, 2017
5
7
19
38
Finland
If I understood correctly these tariffs don't apply to Hong Kong. If a company from mainland China has an office in Hong Kong, can they just ship through Hong Kong and avoid the tariffs?
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
Your video doesn’t make any sense to me. Basically you are saying just import from another company that is cheaper. Well you can do this whether or not there is or is not a tariff on China as a competitive advantage.
No, I'm not saying that there's cheaper countries out there (which there are), I'm just saying that there's countries with the same price and same quality. India, Vietnam, Thailand, Indonesia, Kazakhstan, Turkey, Taiwan, Malaysia, Brazil... these are all countries that in my industry are competitive.

Taiwan for example is known for superior quality, but a little bit more expensive... now if you switch your production to Taiwan, suddenly you're as price competitive as your competition but with a far superior product.

By switching, in most scenarios suddenly you have the same price, but no tax, therefore making the product cheaper and giving you a huge competitive advantage.

The majority of people that import don't know how to import. They use Alibaba, talk to a few suppliers, maybe do Canton Fair, and that's it. They've been doing it that way for 10+ years, and have always done it that way.

The China-wide tariff allows motivated entrepreneurs an opportunity to outcompete their competition.

China isn't the end-all-be-all. Far from it. It's just the easiest.

You can get the same quality at a better price for most products outside of China. For some, you can't, but that's the exception. @Walter Hay can likely shed some more light on that.

What if instead of the tariff of being a country specific tariff it becomes a product specific tariff. So you’re specific widget is taxed at 25% no matter what country it is made. Then Kak’s video applies and the product price goes up.
Then the impact depends on the price elasticity of the given product. I have products that are hit with blanket tariffs. Aluminum (10%) and stainless steel (25%).

And you know what the industry-wide result has been?

Same demand, higher prices, and better margins because when the industry as a whole increases their prices, everyone in the industry starts making more money.

That's probably not true for all industries (quartz is a recent example of one that's completely F*cked ... 300% tariffs), but it is true for a good number of them.

If you're selling something that people NEED, you're good. If you're selling something that people WANT, you're probably going to take a hit. It's all industry specific.

Personally I’m staying with China. I’ve got a good setup there and can wait this out.
And that's for you to decide.

I think these tariffs are going away soon, so I'm with you there, but there's still risk associated with your play. If Trump wins, and the China mess continues, then you're gambling that in 6 years no one's going to find a better supply and outcompete you. That's a long time to gamble.
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Speedway Pass
Sep 13, 2014
2,131
8,668
1,953
80
World citizen
www.provenchinasourcing.com
@AgainstAllOdds, thanks for explaining the reality of sourcing in the world that exists outside of China, and even :eek:outside of Alibaba! :wideyed:

When operating my importing business, I started off before Alibaba existed, and before the internet existed. It is still possible to source products without Alibaba.

I registered as a vendor years ago in order to have access to all the insiders information that their vendors get. I have never sold anything on Alibaba, and I have never sourced a product on Alibaba.

People have come to expect everything to be dished up on a plate, and for some reason they have been fooled into believing that Alibaba is the only service that can dish up all those goodies for the least effort on the part of the buyer.

You are quite right when you say: "You can get the same quality at a better price for most products outside of China.", but you can also get equal quality at a better price for many products if you are willing to untie mummy Alibaba's apron strings.

I also agree that the tariffs will probably not be with us for too long, but meanwhile astute buyers can outsmart and out compete their competitors by taking the initiative NOW.

If the country specific tariffs become product specific tariffs, the astute importer can still win, by buying those products for less outside of China. He/she will be ahead of the others when tariffs change.

Walter
 

Jake

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
May 15, 2011
1,766
2,562
680
36
Bangkok
By switching, in most scenarios suddenly you have the same price, but no tax, therefore making the product cheaper and giving you a huge competitive advantage.
Depending on the item it may also be wise to finish it off in certain countries. I.E build 70% in China, ship to Vietnam, buy some materials and finish assembly. Ship onwards with a Vietnamese Country of Origin
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Dec 26, 2014
1,787
10,430
2,426
27
Chicago, IL
Depending on the item it may also be wise to finish it off in certain countries. I.E build 70% in China, ship to Vietnam, buy some materials and finish assembly. Ship onwards with a Vietnamese Country of Origin
Yeah, but you have to be careful since you'll start getting hit with import tariffs in those respective countries.

I shipped a component that goes into a set from China to another Asian country ... 50% tax. It was cheaper to take care of the packaging and headache in the U.S.
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Speedway Pass
Sep 13, 2014
2,131
8,668
1,953
80
World citizen
www.provenchinasourcing.com
Many of the low labor cost countries have very high tariffs, so once again @AgainstAllOdds has hit the nail on the head.

It is worth noting that a lot of production in CVhina is automated, using robots, or at least using fast moving production lines.

Both of those reduce the amount of labor required. In fact a Chinese friend who employs 6,000 people is trying desperately to reduce that number. This has resulted in him installing new technology that substantially cuts the labor cost.

Chinese low prices are not always due to low labor cost.

Walter
 

Ernman

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Feb 8, 2019
292
515
242
59
Florida, USA
So why bother when they can just delay, delay, delay...
This is especially true when we understand that China tends to take the long view. A few months, even four more years, means nothing to them but time. For most American's that is forever.
 

Ernman

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Feb 8, 2019
292
515
242
59
Florida, USA
Should I assume he likes tariffs yet?
Does DJT not realize, or not care, that the huge taxes/tariffs he's collecting are coming from the tax payers? As has been clearly stated, tariffs are nothing more than a tax. China is not paying the tariff, the consumer is. In some cases the USG offsets the tariffs - farm products - to avoid hurting an industry. But all that does is create more federal debt which is paid by more taxes. In most cases, the consumer must decide - especially with the latest round which will hit mostly consumer goods.

The other question is what is the way out? It appears negotiations aren't exactly going well. Maybe some folks in the US and Chinese governments need to have a chat with Chris Voss?
 

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom