QUOTE(Supposn @ Aug 9 2018, 01:56 PM)
Element Electronics company is obviously lying.
About what? They do final assembly on components that are entirely sourced from the Far East, mostly China. Tbey ere making tin margins when the tariff on these components was 4.5%, and now it's gone up to 25%, what did you think was going to happen.
It may be a pretty tenuous business, and the investors and senior management may have been skating on thin ice to set up Element Electronics in the first place. They already had to back down from saying "made in the USA" to the more accurate "
assembled in the USA".
But, based on this article (which actually disccusses the business and how the sanctions will affect them), they aren't lying - their business is going to be killed off by Trump's trade war. How serious that is for the whole USA is another matter.
QUOTE
If the USA levies tariffs upon components, I would suppose and expect we would do so upon similar imported components and finished products from all foreign nations. USA producers are at disadvantages to cheaper foreign labor, but they're at lesser rather than greater disadvantages due to such USA levied tariffs.
All true, but if you want to buy a television. or a whole host of other consumer electronics products as a US consumer, you don't have the option to buy from one of the advantaged-by-tariffs US manufacturers,
because there aren't any, because (in turn) electronics manufacturing (an industry I've worked in for 13 years now) is a highly layered and interdependent industry. Some of the design and branding may be owned by First World companies (in the US, Europe, Japan and Korea) but precious little of the component manufacturing happens outside China, Taiwan and India these days. And for mass-market products - TVs, cellphone handsets, games consoles, etc. - pretty much all the final assembly happens either in the China/Taiwan/India nexus, or in domestic plants that extensively use components and sub-assemblies from there.
It'll take more than a 25% component tariff to make it worthwhile to disinvest the hundreds of billions of dollars worth of plant, equipment, raw materials processing and human capital, and it'll take more than one or two presidential terms to reverse 50 years of outsourcing. And if it does, be prepared (as loyal American consumers) to pay 50% more for your consumer electronics than the rest of the world needs to, because while you are still (just) the largest single consumer market on the planet, the rest of the planet put together makes it more worthwhile to keep the manufacturing investment somewhere that doesn't think that the basic rules of supply and demand should be bent in its favour.
QUOTE
I don't doubt that the tariffs will to some extent reduce USA sales of the finished products.
Probably. Probably not by enough to make the benefit in balance of trade outweigh the lost jobs in electronics retailing as the retailers try to offset the new tariffs by absorbing some of it themselves through headcount reductions, rather than passing the full cost increase to the consumer. Though, from my experience, it's more likely that they'll pass the full tariff on and sneak through some price increases of their own, knowing that everyone will blame it on the tariffs and on government (both that of the USA and of China)
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We all benefit from cheaper imports, but they don't fully compensate for USA's chronic annual trade deficits consequential reduction of our GDP and net numbers of jobs.
The best way to do that (ie compensate for trade deficits) is not through tariffs and trad wars, though, is it? Import certificates might but that's not what the Trump administration is trying - they're just reviving policies that have already been used, and have already failed and were superseded by free trade agreements in the 1960s and 1970s.
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I'm among the proponents of the improved unilateral trade policy concept as described in Wikipedia's “Import Certificates” article. It is superior to pure free trade, tariffs, or any other trade policy we're aware of.
In your opinion, maybe. And that's all anyone has on that subject, since nobody has ever tried them out - they are purely theoretical. That's not to say they might not work - they might, but we won't know for sure until someone implements them. And we won't know what the unforeseen consequences are until someone tries them either.
Whatever else might or might not be true about them, it is simple fact that Element Electronics (whose business model is uniquely exposed to this type of issue; their strategic analysis didn't pay enough attention to the Political 'P' of their PEST/SLEPT assessment, or gave unduly low risk scores) is going to shut down directly and immediately because of Trump's trade spat with China.
Ooops! I forgot the link
HERE
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Aug 9 2018, 12:56 PM
