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Trump tariffs, Made in USA

Discussion in 'General Politics' started by W2L, Jun 2, 2019.

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  1. Richard T

    Richard T Active Member

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    Labor is cheaper in China, but the percent of labor costs in an electric tool, is probably not that great, could be 10% or less. The problem is that China will subsidize their industries, cheat on currency exchange rates and create inferior products to gain market share. I have many personal examples, such as how my latest stainless silverware set bought at a higher end retailer, started to show some rust. Anyway, there are some tools still made in the USA, and some companies are increasing jobs in the tool sector. Here is one example of this, though not all their tools are made in the USA.
    "However, along with international expansion, Milwaukee Tool is also expanding their manufacturing footprint in the U.S. In December 2017, they announced a significant expansion of their Mississippi factories, creating over 600 new jobs in those cities – this was their fourth expansion since 2012 in that state." Source: Are Milwaukee Tools Made in the USA? - All American Reviews
     
  2. jgarden

    jgarden Senior Veteran

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    Was it not President Nixon who first established trade relations with China and weren't the NAFTA agreements negotiated/ratified during the Reagan Administration?

    Rumor as it that prior to 2016, the "pre-Trump Republicans" supported free trader and were strongly opposed to imposing tariffs - just another example of how today's conservatives are all suffering from a case of collective amnesia, conveniently forgeting the fundamental principles upon which the GOP was based!
     
    Last edited: Jun 3, 2019
  3. Yekcidmij

    Yekcidmij Economist & Engineer

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    NAFTA started with Regan and ran through Clinton. It took years and was pretty bi-partisan. It could be a good time now for congress would step in and re-assert the power of the purse over one guy determining trade and economic policy for everyone else.
     
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  4. W2L

    W2L Well-Known Member

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    Some off their tools are made in america but not their power tools. Not the ones i saw in the store anyway.
     
  5. grasping the after wind

    grasping the after wind That's grasping after the wind

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    Are the Chinese to poor to buy Chinese goods? If no one is buying your product because it is too expensive you will lower the price.
     
  6. myst33

    myst33 Well-Known Member

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    Many of them are.

    And then you dismiss many of your employees or close your company or make salaries of your employees lower. You cannot just lower your price without any other consequences.
     
    Last edited: Jun 4, 2019
  7. miamited

    miamited Ted Supporter

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    Hi W2L,

    From what I've read, no, tariffs do not address the problem. The simple thinking of tariffs is that 'IF' we make a foreign product more expensive for the U.S. consumer to buy, then some American business will pick up the slack and start making that product here and we can buy our own homemade product. However, the reality is that it doesn't really seem to work that way.

    We can use cars as an example. An automobile has thousands of individual parts that make up the whole. A lot of those individual parts are made in factories with really great assembly processes that already have their supply chains up and running and people coming to work every morning at 7a.m. to begin their day of work producing their specific part.

    So we say, let's make their part more expensive for the American consumer, to give some American business the opportunity to make that same part and sell it at a competitive price. It's likely to take 6 months or more for the American businesses to pick up the slack and the final outcome is that the automobile, that is the final product, is now more expensive for everyone. Oh, well, now 500 people that could have purchased that care at the old price can no longer afford to buy that car. So the automobile assembler lays off a dozen people. The new manufacturer lays off a dozen people, and so on down the line because now the final product is more expensive for everyone.

    Historical records have shown that tariffs are not a particularly good way to build up business in the country charging the tariff. In 1890 the McKinley Tariff (Tariff Act of 1890) proved to be a failure overall. While it did raise federal tariff revenues, the resultant increase in cost to the American consumer was even greater than what the government was bringing in. It was determined that even the manufacturing gains made by some who did accept the challenge to produce tariffed goods in the states did not offset the increased prices to consumers.

    McKinley Tariff - Wikipedia

    The Smoot-Hawley Tariff Act of 1930 is actually blamed for worsening the great depression due to the increased costs to the American consumer. It was also designed to increase domestic manufacturing and failed.

    Those Who Don't Learn From Smoot-Hawley Are Doomed to Repeat It

    So, it would seem that while the 'simple' thinking on what tariffs 'should do' isn't born out by the historical record of what tariffs 'actually do'. History shows that we've had several instances of Presidents or Legislators who thought just as President Trump thinks, but that the final outcome was not successful.

    God bless,
    In Christ, ted
     
  8. W2L

    W2L Well-Known Member

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    So how does the government address the problem of outsourced jobs? Wasnt democrats previously wanting to address that issue?
     
  9. Yekcidmij

    Yekcidmij Economist & Engineer

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    First, are we sure "outsourced jobs" are a problem?

    Second, if government wanted to do something about it, for whatever reason, then we know tariffs are an ineffective way of going about it. Here are a few general things that could be mixed and matched that might change production sourcing and labor. Note, this doesn't necessarily mean these are desirable (or to what degree they might be desirable or undesirable), or even doable:

    1) Workers accept lower wages. Note that this doesn't mean workers have to accept a lower paycheck. Lower wages could come in the form of lower inflation-adjusted (ie, "real") wages. Or, if something like government provided health care was offered, then technically worker's wages would be lower (companies wouldn't be providing/paying for health care costs for them). Or government could eliminate minimum wage laws.

    2) Government de-regulates to decrease administrative and compliance costs.

    3) Companies and workers become more productive. This is already happening to a large degree and could involve anything from invention and use of new technology, new or optimized production methods, optimization of tasks and hours or any number of other things. Freeing labor from repetitive tasks allows an increase in productivity.

    4) Government sets restrictive capital controls. This would probably severely damage the economy. I'm talking about something much more restrictive than tariffs (which don't work).

    5) Government devalues the dollar and fixes the exchange rate. This would probably be very damaging too.

    ....Maybe there are other things that doesn't fall under these?

    All choices involve trade-offs. What would you be willing to trade off for "insourcing jobs?" What would everyone else be willing to trade off? How much inflation is everyone willing to trade off? How much economic growth is willing to be traded? How much economic freedom is willing to be traded? How much are we willing to trade in terms of quality of products, quality of life, etc?
     
  10. miamited

    miamited Ted Supporter

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    Hi W2L,

    Why does a government that's running less than 4% unemployment even want to address outsourced jobs? Don't you guys get it? Every country has outsourced jobs. Yamaha has a complete corporate structure here in the U.S. Honda, Toyota, Volvo, BMW are all foreign companies that have outsourced jobs IN the U.S. They have multiple yuge factories and production facilities that operate right here on a piece of American dirt, plugged into an American energy source and employing American people!!!!!!!

    Foreign-owned companies employed 6.8 million workers in the United States in 2015, up 22% from 2007, according to preliminary data from the U.S. Bureau of Economic Analysis.

    6.8 million Americans work for companies whose head offices are deemed to be foreign companies!! It's a world economy folks!! The U.S. is doing just fine in this world economy. This issue of American companies setting up work sites in other countries is not the 'terrible, terrible bug-a-boo that some are trying to make it out to be.

    There are literally hundreds of foreign headquartered companies doing business in the U.S. and there are literally hundreds of American companies with some sort of presence in other countries. Now, for a lot of those American companies that are now looking at retaliatory tariffs or even our own tariffs making their supply chain more expensive, there is actually some evidence that some American companies that have worldwide sales will bolster or open new foreign investment.

    Harley Davidson just showed us that. A lot of their parts come from China and now the parts that they buy from China are costing them more and hence the motorcycles they sell in Brazil are now more expensive than other motorcycles sold in Brazil. So, what can H-D do? Well, they can open or strengthen their manufacturing facilities in a country that isn't trying to make their production more expensive by slapping tariffs on their supply chain so that they can continue to sell motorcycles in Brazil at competitive prices. Oh my, our zeal for tariffs has just cost us American manufacturing jobs.

    You remember this incident, right? President Trump made a big stink about how he was going to make H-D pay for moving production out of the U.S. But the whole reason they were even considering it was because they could see that tariffs were going to put them out of business in other countries. Folks...it's a world economy!!!!! Ford can make automobiles cheaper in Mexico and the more tariffs we slap on all of their parts chain, then the more cars they're going to make in Mexico. Because those Mexican made cars can be sold in Europe at competitive prices. It's a world economy folks!!! Don't you guys get it!?????

    All we're doing by making American made products more expensive to other countries is just cutting off our own nose to spite our face. Sure, we'll sell our products at home because everything is more expensive at home because of the tariffs. But there are a lot of American companies that sell on a worldwide platform who can make more money in those markets by moving their production to other countries. Yes, the little mom and pop ice cream shoppe on the corner isn't going to be effected much by all of this except that all of their cups and bowls and straws and tables and chairs are going to be more expensive and it's going to cost the American consumer more to have their once a week ice cream at the little shoppe down the street.

    But many, many, many of American companies - and certainly those that employ the greatest number of people - operate on a worldwide scale and tariffs only serve to make American products more expensive to Mexico and Canada and Brazil and India and Great Britain, etc., etc., etc. Believe it or not our nation has been running great guns economically for the last 10 years. If we skip over the four years before the last ten years, our economy was running great guns for the 10 years before that, too. All of this with companies moving here and there and operating all over the world. People in America were employed and making decent salaries and living pretty good lives as the world might measure that metric. Then some company announces that they're going to open up a facility in Singapore and all of the sudden the sky is falling. We're all doomed!!!! The world's coming to an end as we know it!!! How un-American of them!!!! Americans are losing their jobs, blah, blah, blah, blah. Nevertheless, through all of these terrible, terrible events...unemployment ranges from 4-6% pretty steady for all those years.

    God bless,
    In Christ, ted
     
  11. W2L

    W2L Well-Known Member

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    It was democrats who were preaching doom and gloom about outsourcing.
     
  12. W2L

    W2L Well-Known Member

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    According to democrats it was a problem but not now?
     
  13. miamited

    miamited Ted Supporter

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    Hi W2L,

    While I appreciate your response to me, you really should be more understanding of the issues before you jump in the water. It was you that asked about what to do concerning outsourcing --
    I provided you with a response. I have no idea where you have come up with this idea that it was somehow the democrats that were predicting doom and gloom. It was just a lot of American citizens who have been complaining about outsourcing. Yes, at various times in the past it has been an issue that Democrats felt needed addressing and yes there were times that Republicans have felt that the issue needed addressing. Presently, it is President Trump who has made it a big issue about outsourcing. He has railed against companies like H-D and Ford who have made gestures to open up facilities outside of the states. He has stood before a group in Pennsylvania and told them that Joe Biden hasn't protected their jobs. He has railed against steel and aluminum manufacturing that is being done, for the most part, outside of our country when there was a time that we were the big producer of such products.

    Further, even if we are to address outsourcing, tariffs have been proven to not work to resolve that problem.

    How about, before you jump in here with a bunch of half-baked politicized ideas and some agenda to crap on Democrats, you study what you're talking about and then get back to us. Sorry to be so hard on you, but your response was really one lacking in understanding of the issue.

    God bless,
    In Christ, ted
     
  14. W2L

    W2L Well-Known Member

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    Just noting that democrats are not interested in outsourcing any longer.
     
  15. Yekcidmij

    Yekcidmij Economist & Engineer

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    I dunno, I won't defend party behavior.
     
  16. miamited

    miamited Ted Supporter

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    Hi W2L,

    Yes, and apparently the Republican president isn't either. What's your point? This isn't about some party line dogma. There have been presidents and legislators on both side of the party line that have, at one time or another, been in favor of working to stop outsourcing. My point is that outsourcing doesn't really seem to be bringing on all the doom that those, of either party, claim that it does.

    But right now, at this point in time where you and I are standing today, it is the Republican ticket that is starting up all these tariff fights because they believe that other countries are 'eating our lunch'. That just isn't the case. We are a strong country and we make a lot of goods. No, we don't make everything and we don't make all of anything. It just baffles me how we can be standing at one of the highest employment figures that we've had in 50 years and someone is trying to convince us that foreign nations are taking our jobs.

    In 1969 the U.S. unemployment rate was 3.6%. It is claimed that's the best it's ever been in 50 years. Just prior to the mortgage backed securities collapse, unemployment was around 4.5%. Then in 2009, not due to any outsourcing of jobs, the unemployment rate skyrocketed to over 10%. It has since been steadily falling. All while American companies were building production facilities overseas and foreign companies were building production facilities in the U.S. This bug-a-boo about outsourcing really doesn't seem to be creating the gloom and doom that some seem to think that it does.

    As of 2017, the U.S. exported to other countries just under $1.4 billion in goods (not services). We imported just over $2.1 billion in goods (not services). We are the largest consumer of pretty much all goods and so it would stand to reason that we would import more than we export. But even with this trade imbalance that some are screaming about, it isn't having any negative effect on our economy. Why? For the very reason that we are the largest consumer of goods in the world.

    Yes, if you were a steel worker and your factory shut down and opened a facility in Mexico, you felt the pain of job outsourcing, but then you got another job. So yes, on a micro individual level, outsourcing can be painful. However, as a national issue, it doesn't seem to cause even a blip on the radar screen. But, no matter whether we look at the problem on an individual or a national level, tariffs have never proven to work in resolving the problem.

    Here's an article by Forbes, which I think a lot of people consider to be a fairly accurate reporter of financial and economic issues. It's worth a read: 3 More Ways You May Not Realize That Tariffs Will Hurt Jobs

    Again, I apologize for being so forceful in my last post.

    God bless,
    In Christ, ted
     
  17. HannahT

    HannahT Newbie Supporter

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    I don't know what is the answer is- tariffs or not.

    There were many areas in which people lost the industry that kept the towns/counties afloat, and when they left that drasvasted the areas. To many politicians promised to help those areas, and never got around to it. Many are languishing to this day. Yes, some did move on - they had too. Many of the very old or very young couldn't leave, and due to the fact many families did? Resources for those that were left slowing were stripped away due to populations decreases. That would include doctors, hospitals, etc. It gets to the point your home can't be sold, and your principal dries up. It's not like the cities where you have many forms of industry. Many in these areas never recovered even when they moved on after they lost everything. Sadly, you have many of those small blimps on the radar throughout the country. Then no one planned on how to help those no bodies that were left with the true cost. I doubt they really studied the true impact either. Within the last 10 or so years? The most we got out of politicians were calling the companies that leave 'greedy', and that's where they left it.

    Yet, I think this also is a bigger issue as well. Stealing intellectual property so one country can take advantage of many others. Just like the towns that were left behind politicians promised to do something, and really didn't. They stole when they relocated in this country, and they stole when they didn't relocate. Then of course you have countries that decide when they will adhere to global agreements/laws - and when they don't they don't suffer any consequences so you basically enable them to continue. Some of the larger companies do have the principal behind them to move once again, and personally I hope they do. It's more of the principal of thing to me. No doubt they saw a bigger purpose of starting production there at that time in history, but atmospheres change.

    Then you have someone south of us that tend to allow the criminal element to many extents run their country. It's been getting worse, and feel so awful for the citizens. Talk about a country that doesn't care about its people - actions speak louder than words. Terrorizing towns, beheadings, kidnappings, etc are just left for the citizen whom are powerless to do anything about it. The flow of migrants no doubt doesn't help things, because they take much needed resources from these areas. Any human with a heart wants to help, but it also gets to the point where its overwhelming things. There is a channel on youtube where they have someone broadcast their local news, and you have an interrupter. They are mad that the government has abandoned them, because they are over run and government is radio silent. You have little portions here and there that do enforce things until they openly take the brides to look the other way. That government should be doing more to help their own people in many arenas, and in way would be helping us as well. Yet, you can't talk the truth about that or risk being called racist. No politicians will go there.

    I don't know if the tariffs will have any true impact on any of those dynamics, but it certainly seems like more than the all mouth and no action from this government. We have seen that going on for years now, and it just seems to be getting worse. It's much more than the tariffs that are harming our country - and other countries. Although I realize only the surface simplistic issues will bubble to the surface over them. Journalism isn't much for reporting big pictures, and seem to allow politicians to continue to manipulative people with their 'all is well as long as you don't rock the boat' message.

    The tariffs are frustrating but so are the issues that triggered them. We keep hearing how it can be solved other ways, and yet it never is. 20, 30 + years of this and lol now they claim there are better ways that they haven't tried before? It gets to the point you don't know what to believe. If there were better ways WHY didn't they do it? If we can't do anything about it - then be honest about that. I'm so sick the grandstanding - and the holier than thou attitudes - when no meat on the bone as far as solutions. Their past inaction is what is triggering this support for the tariffs I'm afraid. THeir name calling and labeling is just a different version of their inaction of the past.
     
  18. miamited

    miamited Ted Supporter

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    Hi hannah,

    Thanks for your response. You wrote:
    Yes, and that's a terrible eventuality for any town or any large workforce in a single city. Detroit MI is one of the most blighted cities in the country because of the huge loss of automobilce production. However, I don't think tariffs are the answer to that problem. So many people think that tariffs are paid by foreign nations to us, but that isn't the case for our import tariffs. The importer, the company that wants China to send them 10,000 widgets so they can make super widgets, pays the tariff. An American company pays the tariff and so what it does is to make all of our products more expensive. Tariffs are actually an impetus for companies that sell worldwide, to move their facilities or grow other facilities outside of the U.S. That way they can buy their raw materials cheaper and still be competitive on the world market.

    An American company cannot sell steel as cheaply as India. You can put all the tariffs on steel from India you want to and any company selling to Great Britain is just going to make their products somewhere else so that they can stay competitive. They'll still buy their raw material - steel - from India, but they'll have it shipped to Singapore where they'll make their finished products to sell to Great Britain. Any large player in some field is going to realize a pretty big savings by moving their facilities off of American shores. So that's what they're going to do.

    Now, some economics whizz says, "Well, let's just impose tariffs on India so that their steel will be competitively priced with ours." The company that is buying the steel from India says, "Uh-oh. Our raw materials price for the 5 million tons of steel that we buy every year just went up $300 million." So, do they say, well, let's start buying American steel? Not likely. They decide that over 5 years they'll make more profit if they move their facilities to Singapore. So, off they go.

    Look America has been losing steel production for decades now. This isn't some new issue that's just cropped up. If tariffs really worked to bring back that lost production would no one have figured that out by now? I contend that no, what we're going to find is that these tariffs aren't going to fix the problems that everyone thinks they'll fix, but in the meantime, the American consumer, who is already complaining about paying more for everything than everywhere else in the world, is just going to find themselves paying even more.

    My wife has a small piece of farming land that was willed to her from her mother's estate and it is rented out as farmland and she shares in the crop profits each year. Last year, she made 25% less. The person that manages the farm, who sends us crop reports from time to time, laid the blame for the reduced profits on tariffs. Even President Trump can see that these tariffs are hurting farmers and has put together a federal subsidy program for farmers to the tune of $12 billion. Who can't see that? What are we going to do about all of the other businesses that wind up getting financially hurt over these tariffs? Is the government going to come up with subsidies for them, too? Are we taking in enough money in tariffs to pay for the resultant subsides and isn't that just playing musical chairs with the money?

    What are we gaining? What is the final exit strategy? Does anyone have any evidence that companies are coming back to America or closing their foreign facilities since the last two years? Does anyone have any evidence that these tariffs are doing what they are intended to do, beyond just making us a bad faith partner in trade with other nations?

    God bless,
    In Christ, ted
     
  19. miamited

    miamited Ted Supporter

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    Hi again hannah,

    You also wrote:
    And most of that is just fear mongering. Do you know that as of May 7, 2019 there were 115 mass shootings that had occurred in this country. Do you know that the 115 as of May 7, 2019 compares to 88 on May 7, 2018. Do you know that in 2018 there were 346 mass shootings in the U.S.? Do you realize that in 2016 the U.S. had over 37,000 gun homicides and Mexico had just over 15,000. I'm not sure that there's much real difference between what happens when criminals run those countries south of us and what happens when criminals run the country that is us.

    God bless,
    In Christ, ted
     
  20. W2L

    W2L Well-Known Member

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    So democrats were not worried about outsourced Jobs? Both Hilary and Obama wanted to renegotiate NAFTA. Please spare me the condescension, you are not as smart as you think you are.
     
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