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HOT TOPIC If you import from China, this may be relevant.

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Kak

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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

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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

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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

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@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

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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

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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

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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 China 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
 
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Ernman

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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

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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?
 

StartupsRFun

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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?
The problem is DJT is an idiot
 

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ZF Lee

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It won't, even he's not that mad.



:rofl::rofl::rofl:
Now tariffs have popped in for Mexico and India...

Why??? I just can't compute.
 

Seamster

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I'm a buyer for a tier one auto manufacturer. With the 25% China tariff we will eat $1.2 million per year that the auto-makers refuse to pay (luckily we only buy a few products from China or it'd be a lot more). Soon we will be forced to hold shipments until they pay up.

I can say with 100% certainty that some products are simply not available any cheaper than China. It's my job to find them (at this point China is still cheaper even with the tariff, because the 25% isn't on the import and shipping, so the actual increase is under 20%). We've found other suppliers that can't meet the specs; and American suppliers (who aren't even up and running yet) can't meet this price.

I'm not a fan of Trump, but I'm also not one of those democrats who thinks that 100% of what Trump does is bad. There ARE companies scrambling to raise factories in the States to compensate for the higher priced Chinese goods. Question is, will this help the US economy, or not?
 

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