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

[AgainstAllOdds]

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.

 

[Walter Hay]

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.

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

 

[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

 

[AgainstAllOdds]

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

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.

 

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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.

 

[MJ DeMarco]

Thus far, here is a list of effected industries.

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



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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[AgainstAllOdds]

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

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.

 

[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

 

[MJ DeMarco]

Earlier tariffs looked to impact manufacturing, but the latest ones might hit some of us smaller producers and entrepreneurs.

With The Latest Trump Tariffs, Consumers Are No Longer Sheltered

 

[QDF]

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

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.

 

[biophase]

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.

 

[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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[Kak]

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.

 

[AgainstAllOdds]

Have you looked into opening a warehouse in Canada?

I haven’t yet. But then I’d need to get the product into the USA from there. The question is is it worth the extra cost and time.

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.

 

[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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[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]

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.

 

[minivanman]

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.

 

[YoungPadawan]

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.

 

[MJ DeMarco]

Good article on anyone contemplating terminating their suppliers in China.

Prevent IP Risks When Terminating Suppliers during U.S.-China Trade War

 

[Walter Hay]

Good article on anyone contemplating terminating their suppliers in China.

Prevent IP Risks When Terminating Suppliers during U.S.-China Trade War

An excellent article, and well worth reading for its general advice on IP protection as well as for the warnings it contains.

Walter

 

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[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

 

[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]

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.

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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[amp0193]

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.

I've got a container arriving soon. It was supposed to be here mid August.

Typhoons and flooding in Shanghai delayed things a month.

Got slapped with 25% on Aug. 23rd on 3/4 of the stuff in that container.

Getting slapped with 10% on Monday on the remaining 4th.


Fingers crossed I clear customs by the end of the week.

 

[biophase]

I've got a container arriving soon. It was supposed to be here mid August.

Typhoons and flooding in Shanghai delayed things a month.

Got slapped with 25% on Aug. 23rd on 3/4 of the stuff in that container.

Getting slapped with 10% on Monday on the remaining 4th.


Fingers crossed I clear customs by the end of the week.

My broker told me it’s based on the port entry date.

 

[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]

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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[Patrickg]

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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