Tariffs

[friscopaint]

I d

Yeah… I know that is the utopian solution. Can USA Corp withstand 4 years of down sales AND afford build a factory, before they close? Thats a corporate death gauntlet for sure.

back to my experience in the Christmas light industry. Mr Woodward explains the technology exists almost exclusively in China to make LEDs. My personal experience is that my company moved a factory to Cambodia the last round of tariffs. We went half the year without products because Cambodia (and Vietnam to some extent) does not have the infrastructure to support it. Our shipments sat for months because the only road to the port from our factory was a dirt road over a rain forest mountain range . Heavy trucks could not navigate during rainy season. Which, unironically is why most of the factories in China are located in northern provinces because the climate is more suitable than the hot humid and rainy southern provinces that share borders with Cambodia & Vietnam.

I do hate you are dealing with this but hopefully in the future it will not be a one dimensional playing field which allows one to be held hostage. I would have to "assume", we know how that goes, that folks such as yourself are reaching out to the exporters which has to have reverberation to those above....again I would "assume" that the last thing China would want is ships sitting with containers nobody wants....hopefully China comes to it's senses. Whether any of us have different political views I hope they get this solved and you can continue with business. I suspect Vietnam immediately coming out of the gate with 0% smells blood in the water and a position to gain and hopefully others as well. I am for this but do feel for you and others caught in the middle and I take no glee in that.

[SaltwaterSlick]

Remember, switching SE Asian countries doesn't necessarily hurt China and in fact likely would help China in the end. Many of the companies in other SE Asia countries are Chinese owned. They were start ups from the last Trump Administration when Trump slapped China with tariffs. China just moved countries to avoid tariffs. Many companies in Viet Nam are Chinese-owned as are those in Cambodia.

[PondPopper]

Winning

[Artos]

I do hope China comes into line sooner than later for selfish reasons.

I competed with them for a long time in the maquila mfg wire harness / assembly game & they could quote a finished product for what I had in material every time...only thing that saved Mexico is we could keep customers with 2-3 weeks of parts vs 2-3 months & 30+ day lead times. Plus you could have a design change & then scrap comes into play.

I'm sure there is plenty of border chatter happening on how it proceeds!!

[Man]

Remember, switching SE Asian countries doesn't necessarily hurt China and in fact likely would help China in the end. Many of the companies in other SE Asia countries are Chinese owned. They were start ups from the last Trump Administration when Trump slapped China with tariffs. China just moved countries to avoid tariffs. Many companies in Viet Nam are Chinese-owned as are those in Cambodia.

Yeah they are nearly all chinese owned. But they do employ 400 Cambodian workers as oppose to 400 chinese workers with the shift, so if you work those numbers its still detrimental to the China economy.

[miket]

My gf works for a Japanese company that has a lot of their manufacturing in Vietnam, so they were freaking out after the tariffs went into effect. She was worried about her job, then they quickly capitulated. I was relieved then the thought hit me, they are commies too, with close ties to China.....

[47]

Me too! I don't know if that will pan out or not. The Chi-Coms might cave before they crater so they can live to fight another day. But if they let their pride and arrogance get the best of them, it could take them down.

The Chicoms are decades into their "100 year plan" and have the patience and fortitude to see it through.
Sadly our squishy citizenry can't see past their own 401k dip or what might happen to the cost of lightbulbs 2 months from now.

[Stuck]

My thought process on the China tariffs. China dbld down and Trump in response raised tariffs on China again while putting a 90 day pause for the rest of the world. Once negotiations are completed with trade agreements with the rest of world what if Trump has all the other countries adding tariffs to China so instead of hurting them he just destroys them.

[Man]

Nobody in China wanted to see the new Snow White anyways

[powderburner]

Real numbers from my meeting last night. Out annual duty before the Tariffs FEB 2025 was $1.9M The new incremental with China, Steel/ALU, USMCA, Reciprocal now total $118.6M We have invested over $1B in new US manufacturing in the last few years. But the cost of raw goods to produce the US product has gone through the roofs. If we were to increase to cover the new cost we would price our products out of the market. So we are having a 10% across the board price increase to cover this. We are seeing our order intake drop, backlog is also dropping. Not good. Need backlog to keep plants moving to keep people employed. Need orders to keep coming... Covid part 2 is on the horizon if something does not change sooner than later.

[Man]

I have faith that they knew this was going to happen and have a plan to help. Especially the smaller business's like Playa pointed out earlier in the thread.
The bandaid has been ripped off

[BrianL]

China still holds few aces.... The biggest and most important IMO is controlling 90% of production of the worlds rare earth minerals, but they also hold around 750 billion in US debt that they could flood the market with driving down the value of the dollar.... Sometimes ripping the band-aid off just shows the cancers growing underneath. We have problems that will take years to overcome, and with gov't regulation always changing American companies won't be making 10-20 year capital investment based of today's market condition

[Txhunter3000]

China still holds few aces.... The biggest and most important IMO is controlling 90% of production of the worlds rare earth minerals, but they also hold around 750 billion in US debt that they could flood the market with driving down the value of the dollar.... Sometimes ripping the band-aid off just shows the cancers growing underneath. We have problems that will take years to overcome, and with gov't regulation always changing American companies won't be making 10-20 year capital investment based of today's market condition

Sounds like China did their homework and the Democrauts sold us out to get rich.

[dosrobles]

China still holds few aces.... The biggest and most important IMO is controlling 90% of production of the worlds rare earth minerals, but they also hold around 750 billion in US debt that they could flood the market with driving down the value of the dollar.... Sometimes ripping the band-aid off just shows the cancers growing underneath. We have problems that will take years to overcome, and with gov't regulation always changing American companies won't be making 10-20 year capital investment based of today's market condition

The debt they hold in Bonds is one of the things I worry about most. They don’t even have to flood the market. If they call on just a fraction of what they hold and make people think they are willing to do it other investors will run. That would virtually destroy the dollar.

[GarGuy]

The debt they hold in Bonds is one of the things I worry about most. They don’t even have to flood the market. If they call on just a fraction of what they hold and make people think they are willing to do it other investors will run. That would virtually destroy the dollar.

China can not take a chance on crushing the dollar. Manipulating their currency is how they get all the manufacturing. If our dollar really tanked, it would be cheap to make things here. China better get in line before Trump sues them for trillions in covid damages and just takes it off what the we them