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

Discussion in 'Product Creation, Inventing, Importing, Sourcing' started by MJ DeMarco, Jul 10, 2018.

  1. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Admin Post
    Thus far, here is a list of effected industries.

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

    upload_2018-7-10_17-59-50.png

    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.
     
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  2. minivanman
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    minivanman Gold Contributor Speedway Pass

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    I never thought that a thing like washing machines would be 1st on the list. Even though I only sell used, I think it might come in to play. None of the big stores that sell used will be affected at all because they only sell units made before 2006. I am 1 of only 3 in the entire DFW area that sells top loads made after 2006. Just to be clear, all washers made after 2006 have a computer in them. Even the 2 largest used washer and dryer sales stores in Dallas do not sell the units made after 2006.

    If the big box stores raise the price and people slow on buying new sets, it will make my supply be lower, where as, the older sets are still a plenty but I will not sell those older sets.
     
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  3. AgainstAllOdds
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    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Thanks @MJ DeMarco for making this thread.

    Short-term this can kill many businesses. I just finished writing the government checks on anti-dumping products from 2015 that were affected by increased tariffs. Insanity. 2.5 years later and I'm writing checks.

    Regardless, my take on the whole trade war: if you didn't see this coming, you deserve what you have coming your way. You had a heads up since Trump won in 2016.

    We spent all of last year changing production from China into other countries that the U.S. wouldn't want to fight with.

    It was time consuming and non revenue generating, but now we're in a great position because of it. The competition is about to get screwed on prices. Meanwhile, we source at the same prices and take market share.

    Now just have to pray Mexico is next.

    For younger businesses, disruption is always good.

    Should be fun.
     
  4. jasoncuellar123
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    jasoncuellar123 I’m probably awake. Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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

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    CONGRATULATIONS! It's great to see someone discovering that there are competitive manufacturers outside of China.

    For the past several years I have been a voice crying in the wilderness, posting here on the Fastlane Forum, and publishing in the last several editions of my sourcing and importing book that importers should look outside of China.

    Sadly I think most have been too lazy, or too inclined to follow the crowd.

    They seem to think: "After all, everyone's using Alibaba, buying stuff from China, and making a killing. Why shouldn't I?"

    OK, so I help people buy from China through Alibaba. Should I not take some of the blame? I don't think so. Everyone who buys my book knows where to look for profitable products in numerous other countries, and I have been urging them to do so.

    From feedback I get, I have the impression that very few people have taken my advice, but I hope that now that things have reached this stage, those with some get up and go will see this for the opportunity that it really is.

    Sure there will be big losers, but not everything you source overseas is going to be punished with high tariffs. For example: Countries who have been producing steel and shipping it as a commodity will still produce steel but they will also be continuing to produce finished steel products - many of which will not be hit by the new tariff regime. At least for now.

    Don't waste your time worrying or complaining. There is a remedy for most smaller importers, and a door of opportunity has been opened wide.

    Walter
     
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  6. Patrickg
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    Patrickg Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    So I may be naive here, but if it says steel for example is that only raw steel. Or if your product is made of steel?
     
  7. Patrickg
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    Patrickg Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    One other note regarding this and value.because I started a business that creates value in the market place, I.E. a patented and defendable product that has made people's life's better. I don't really care. People will still demand the product and if I need to source from somewhere else , it will just be a slight adjustment.

    With that note I hope someone who is thinking of getting in the business sees this and realizes not to just buy a product off alibaba.

    And last note thank you MJ , because if I hadn't read millionaire fastlane. I would be in a completely different position. Instead I am discussing value. Again Thank you.
     
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  8. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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

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    So much for a “tax reform” and a “lower tax administration.” The socialists should be proud. My gosh, the bullshit meter is off the charts.
     
  10. Ravens_Shadow
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    Ravens_Shadow I'm sorry... I couldn't resist. Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Saw hundreds of thousands of people importing, thought about doing it, decided not to and settled on software. :)
     
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  11. Valor
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    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.

    As for the tariffs, I'm not too worried anyway with my business as the US can't produce this item/material domestically and depends on it for a large number of incredibly important things in the government and economy. In fact, if anything, I could actually see China restricting exports of this material to gain leverage in the trade war.

    Any guesses for how this trade war will end? I don't see how this results in any more than a few short-term bumps and bruises on the U.S. economy relative to what's at stake for China.
     
    Last edited: Jul 11, 2018
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  12. AgainstAllOdds
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    Your logic doesn't make sense. Following your logic, there's 3.6 million software developers in the U.S. You're screwed.

    On a more serious note, your statement is completely asinine since it implies that these tariffs are destroying any profitability from importing.

    The big money to be made importing starts now.

    Products aren't going away. People will always buy products. And no way in hell America ever becomes the most competitive for every category in the world, meaning that importing will always have a place in our economy.
     
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  13. AgainstAllOdds
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    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.
     
  14. Ravens_Shadow
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    Ravens_Shadow I'm sorry... I couldn't resist. Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Touché. I do see this as an opportunity for importers to find new sources and have an advantage over competitors.
     
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  15. YoungPadawan
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    YoungPadawan Miles to go before I sleep Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I agree with @Walter Hay and @AgainstAllOdds . 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.
     
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  16. Rivoli
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    I literally just bought my first 20ft container of glass jars from a supplier in China. Hoping nothing changes there. I only have a 4% duty.


    Sent from my iPhone using Tapatalk
     
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  17. Rivoli
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    If it brings higher wages through domestic production. It’s good. We will all benefit from a stronger economy.


    Sent from my iPhone using Tapatalk
     
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  18. JScott
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    From a real estate perspective, this will have a moderate impact on investors. Small-time investors -- who don't use a lot of steel other than for fasteners -- won't get hit too bad. Developers -- especially commercial -- could see a decent jump in cost of framing, especially for steel-frame structures (obviously).

    In general, the cost of building materials has skyrocketed over the past couple years (unrelated to the political situation), so while this isn't necessarily good for real estate developers, they are accustomed to passing these costs on to their customers these days.

    So, if anything, this is mostly bad for commercial building owners and lessees.
     
  19. ghsebldr
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    ghsebldr New Contributor

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    We manufacture greenhouses in the PNW. Our steel is all formed in the US but the raw steel is sourced from China I believe. The steel we use is 56% of our inputs and we have seen several increases passed along by the American manufactures starting in January. Most of those increases based strictly on greed since none of the tarrifs have gone into effect yet.

    I see this as a boon for our vendors and see my costs up just over 27% so far. Flights boarding. More later

    Ghsebldr7
     
    Last edited by a moderator: Jul 16, 2018
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  20. Walter Hay
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    I can vouch for that experience. Better quality and equal to or lower prices than importers have been paying when buying from China.

    See this post on the subject: "Manufacturing in Mexico - Pros/Cons" It is one of many posts on the same subject in which I have been trying to persuade importers of the merits of buying away from China.

    Walter
     
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  21. Marian Diop
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    Marian Diop New Contributor Read Millionaire Fastlane

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    China intends to take over the world by stealing technology and products. They force foreign companies to share trade secrets if they want to do business in China. They treat their people horribly and living in a world with them in control would be horrible. China has been taking aggressive actions for years to solidify its power base. Also, China has more to lose from these tariffs because the country is pretty highly leveraged. I'm glad we're standing up to their bullying. Here are some articles that discuss the issue in more depth.
    Trump's tariffs on China will benefit America and are long overdue

    Are Tariffs The Best Way To Force China To Change Its Ways?

    Donald Trump's China tariffs make sense
     
  22. JScott
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    The second two articles are quite clear on the fact that tariffs alone, without attempting other measures first or in parallel (which aren't being taken) are unlikely to work and could ultimately lead to a trade war.

    Personally, I agree with those last two articles -- though my reading of them is that they don't support what is currently being implemented.

    I don't believe China has more to lose, simply because of their political system. If Chinese people suffer, their government doesn't much care, as there is no risk to their political stronghold; but if Americans suffer, politicians will be voted out of office -- and our politicians will give in before they would allow that to happen. For that reason, our pain threshold in the US is much, much lower than that of China.
     
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  23. MJ DeMarco
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  24. Walter Hay
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  25. biophase
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    So my business is on the list. My stuff is getting hit with a 10% tariff starting Monday. Luckily my newest shipment arrived yesterday.

    Starting 2019 the tariff increases to 25% so I’m ordering a lot of next years inventory to arrive before New Years.

    10% is not enough to make me move from China. 25% is close. We will see what happens.
     

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