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If you import from China, this may be relevant.

Discussion in 'General Entrepreneur Discussion' started by 404profound, May 7, 2019.

  1. ZF Lee
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    ZF Lee Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    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...

    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.


    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! :(
     
  2. AgainstAllOdds
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    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    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.
     
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  3. ZF Lee
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    ZF Lee Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    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.
     
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  4. James Fend
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    James Fend Gold Contributor FASTLANE INSIDER Speedway Pass

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    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: May 13, 2019 at 2:22 AM
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  5. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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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.

    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.
     
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  6. 404profound
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    404profound Gold Contributor I've Read UNSCRIPTED Speedway Pass

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  7. Kak
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    Kak Capitalist Swine Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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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.
     
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  8. Antti
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    Antti New Contributor I've Read UNSCRIPTED FASTLANE INSIDER

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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?
     
  9. AgainstAllOdds
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    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    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.

    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.

    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.
     
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  10. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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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
     
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  11. Jake
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    Jake Platinum Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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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
     
  12. AgainstAllOdds
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    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    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.
     
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  13. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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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 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
     
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  14. Ernman
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    Ernman Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    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.
     
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  15. Ernman
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    Ernman Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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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?
     

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