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05-04-2011, 08:53 AM #1
can Trump REALLY fix our import runaway in the USA?
Seeing how bad things have got there where we actually think it is acceptable to have our own military equipment built outside the USA and a HUGE % of everything we use in the USA comes right from China and is slowly sucking the life right out.
Trump has indicated several times that he wants to impose a 25% tax on EVERYTHING that comes in from China. Now, trying not to politically nuts here, I do NOT think Trump is the right choice for president mostly because of his arrogant attitude and lack of being in govt in any way BUT, in chatting with my mother, she brings up a very valid point and that is that since Trump has made his own wealth, he probably would not care to benefit as much financially as other presidents and just might rock the entire government which might just be a GOOD thing...
I am just wondering if the estimated 25% tax can truly help? from my perspective, it seems highly plausible as long as China does not throw it all in our face. I can only guess that the 25% charge would then go to govt. is that really a good thing? Where should that money go? One thing is for sure, that could certainly perk up USA mfg BUT I doubt that will fix our position in the world for mfg, only our domestic business.
05-04-2011, 08:58 AM #2
Talk is cheap, especially by a buffoon.
05-04-2011, 09:15 AM #3
This post fills my one post per year quota in this subforum
An import tariff would be devastating to our country in the long run. Almost every country would reciprocate in kind, limiting the market for domestic goods to our country and crippling our already flagging exports.
Our declining industrial sector is not something we can muscle our way out of. We were quite fortunate to benefit from both the devastation of European industrial capacity after WWII and cheap domestic labor through the 1950s. Somehow this confluence of events gave many Americans the false idea that they are entitled to being the top dog, and that the persistence of that status was necessary and inevitable.
We've taken the great advantage that was bestowed upon us in 1945 and squandered it on international intervention, government bureaucracy, and the regulation of private social behaviors/commerce.
The party is over, boys.
05-04-2011, 09:30 AM #4
Well what IS the answer? I tend to agree that a tariff is a double edged sword. that being said, are you suggesting we just sit back and plan for our inevitable setback to a 3rd world country? That is exactly where we are headed. We don't make anything here anymore, it is all junk and no one gives a shit, and our dollar is considered more worthless every day.
Regarding the tariff though, do we REALLY export enough that if we just started building for ourselves that it would cripple us? I mean, do we REALLY need Toyodas? A US made Chevy will not do? Anyone notice how Asians in the US tend to drive imports? I find that pretty funny. They are loyal to a country they were not even born in but we just do not care... Pretty soon, no one will..
05-04-2011, 09:35 AM #5
05-04-2011, 09:37 AM #6
05-04-2011, 09:43 AM #7
05-04-2011, 09:48 AM #8
If Sam was still around, I would bet my won farm that he would have set the benchmark for other companies by going back to 100% american. Someone will have to do it but just telling me to BUY american is like telling me to go live in poverty because everything US made is over priced. I very much that we can trust every American to just switch over. Hell, you cannot even BUY a USA made semiconductor.
05-04-2011, 10:13 AM #9
The only people that can slow our hyper-active trade imbalance are the people buying the imported products.
And it always comes down to one thing, M-O-N-E-Y
As long as imports are cheaper they will get purchased. As long as American labor rates are several times the offshore rate, this will not get fixed. Import tariffs will not fix this, taxes will not fix this, only time will fix this. Time for the standard of living to come up in the rest of the world, and for our standard of living to drop to match.
05-04-2011, 10:35 AM #10
Business Week's latest issue includes a cover story on Donald Trump. Trusting him with anything that doesn't serve his monumental ego is pretty much a lost cause. IMO, the adulation given by much of the media to Trump over the years is a symptom of what's wrong with the country. He's the Paris Hilton of business; more famous for being famous than anything else.
Early in his career, Trump did take a small fortune, parlay it into a construction development business, and build a couple of significant properties. But for the past several decades, the message Trump sends to young folks is to fire rather than hire, to play games rather than work hard, to claim credit when there's any to be had, and to blame others when things (frequently) go wrong. It's OK to go bankrupt multiple times, too, as long as it's mostly your investors that get screwed. And, the objective of all this? Own lots of shiny stuff, discard wives when they are no longer so pretty, and get lots and lots of attention.
Back to the main point -- what can be done -- countries like Germany are doing fine with exports. The country has a strong technical core, respect for its educated workers, and a culture of export. Contrast that with our lesser focus on science and technology in education, kids who want to be lawyers or investment bankers rather than engineers, and an insular culture.
05-04-2011, 10:43 AM #11
Last year, the USA exported $1.28 TRILLION worth of stuff.
It isnt true we "dont make anything anymore".
We dont make EVERYTHING anymore, but we still make plenty, and the Chinese still buy tens of billions of dollars worth of US manufactured goods every year. 92 Billion or so last year.
I kinda think losing 92 Billion dollars worth of business would affect the USA.
The Chinese problem is taking care of itself-
as oil prices keep rising, it costs more and more to ship stuff across the ocean.
the chinese are buying more of their production themselves.
chinese wages have been going up by huge amounts, creating a middle class that bought 1 million GM cars last year, for example.
they had over 20% wage increases in most fields last year.
when was the last time WE had a 20% raise in machinist wages?
Its absolutely true that there are things we could do to improve american manufacturing- an overall policy, that was actually thought out, written down, and then followed, would be a good start.
right now, its whoever has the most money to lobby with or contribute that gets the laws passed to favor their company.
05-04-2011, 11:17 AM #12
We are in the mold building industry, I know this does not apply to all manufacturing but things are changing in this trade for the better, we are seeing our customers bring back tooling to the U.S. for reasons in this following article. This link is and article from the A.M.B.A.(American mold builder association) about the "true" cost of offshoring. People are very slowly starting to see this. I believe this is a pdf file, I hope the link works.
How does Trump play into all this.? I am not really sure, I think the only thing he will do is stirr up the media. I don't think he will be taken seriously for a candidate.
05-04-2011, 11:30 AM #13
Whats the definition of insanity.... doing the same thing over and over again expecting different results?
I really do think at least he'd shake things up. He's already rich, so perhaps he might not be as willing to be bought by special interests. As a president & leader... I dunno. But I'm really ready for us to try something different.
Imports from China and middle east oil are the majority of the trade deficit and kill any growth of GDP. And China needs us more than we need them. I'm all for tariffs, or fees on dollar to Yuan conversions until the chinese stop subsidizing their currency and remove the trade barriers they erect against USA made goods, and goods from other countries.
You can go on living.... or you can go on dying....
05-04-2011, 11:52 AM #14
Both Bushes were "already rich".
Trump is a lot less rich than he likes to say he is.
As for China needing us more than we need them- Neither of us really needs the other all that much- each economy would get along fine if the other dropped off the face of the earth.
Official statistics in China say that they only send about 25% of their exports to the USA, but unofficially, its probably even LESS- a lot of chinese companies export stuff under the table to avoid taxes, to all kinds of countries. And an enormous amount of in country business goes unreported, to save on taxes- which means that exports are probably less of the economy than they say they are.
Exports are officially around 25% of the Chinese GDP- that means, as a percentage of their economy, exports to the US are a quarter of a quarter- maximum.
Thats 7% of their economy- and while it would hurt them if that 7% went away, it sure doesnt kill em.
Conversely, we import various cheap crap from China, much of which could easily come from other places, or even be made here- if chinese costs keep going up, more of it will come from other countries, and some will come home.
Vietnam, and various other lower cost countries are already stealing the really cheap stuff from China- chinese wages are now mostly higher than is profitable for $3 T shirts and hand painted action figures.
In terms of debt, the Chinese hold less than 10% of our debt, and, until very recently, were behind Japan in the amount of debt they held. They are the number 1 holder of T Bills and Bonds, but many other countries, as well as hedge funds, and plain ol american citizens like me, hold the vast majority of US debt.
05-04-2011, 12:00 PM #15
The most sensible proposal I've heard was Warren Buffet's idea to create a system of import and export credits.
In a nutshell, a company that's a net exporter would get credits from the gov't while net importers would have to buy credits, either from the gov't or from the net exporters, to allow their imports. The greater our trade imbalance becomes, the more value the import credits would have since they would be traded on the open market. Conversely, the closer we got to a balanced situation, the less value the credits would have.
More to it than the above, but if you google buffet and import export credits there's plenty of info on the subject.
Buffet's scheme would attach a cost not only to companies like Wal Mart, who encourages their suppliers to offshore to keep things cheap, but also to other American companies who offshore purely in the chase for cheap labor and profit enhancement while keeping their prices as high as ever.
From another perspective, it seems as if we're often the wide open retail market for other countries while these same countries set up multiple barriers to the import of US goods. Rather than across the board import tarriffs, which would undoubtedly create retaliatory tarriffs on the part of countries who do trade fairly with us, it seems we should consider doing to others as they do unto us.
IOW, if China has tarriffs and other import barriers amounting to an average of 15%, then us putting the same 15% on anything they export to us would be fair enough. If India's barriers total 5%, apply that amount to India's exports to the US, and so forth.
At the same time, we'd need to look at some of our own trade barriers, such as price supports for domestic sugar and other selective food products. Some of these schemes put an effective 100% block on imports, and the cost is paid by the american consumer for the sole benefit of big agri-biz in most cases. A domestic steel producer has to spend a million bucks in proving the Chinese are dumping steel, and preferrably be on the verge of bankruptcy, to get a 5% tarriff applied to Chinese steel, yet, at the same time, certain categories of domestic food production enjoy tarriffs high enough to effectively preclude any foreign competition whatsoever.
Only thing is, all the above would be considered a form of national industrial policy, and would be guaranteed to produce widespread rants about picking winners and losers, socialism, communism, and so forth. In reality, we're practicing all those terrible things right now, for the benefit of entrenched big business interests and at the expense of small business and the middle class. I doubt anyone could point to any modern country anywhere on earth today whose industrial policies are as detrimental to the general welfare of the country as the policies currently in place in the US.
Trump is an egomaniacal blowhard. He talks about getting tough with the Chinese, but the only people he gets tough with in the real world are his creditors, and he does that by hiding behind the bankruptcy laws. Just another opportunistic chickenshit parasite IMHO.
05-04-2011, 12:06 PM #16
05-04-2011, 12:59 PM #17
Guys I am in low end high labor products that I buy from China. Rates in China for labor are steadily increasing and factories that are on the east coast are trying to move inland. Average wage on the east coast is $8500 per year and it is $3500 in the central areas for a factory worker. That is the good news for factories here. The bad news is....
There is a long line of countries waiting to pick up the slack. I am already investigating Cambodia and Vietnam. My competitor abandoned a factory of theirs in China and bought a place in Cambodia.
It is political BS to say that we are just going to tax one country. Some of the other posts were right, we need to fix it from within.
I am happy to say that we are doing some good military work and the buyers appreciate that we make it here. ( textiles )
05-04-2011, 01:06 PM #18
05-04-2011, 01:08 PM #19
You really really need to.
Just look at this statistic and munch on it for a while, Will you please?
Foreign Trade - U.S. Trade with China
Then look at these figures too and see where the problem lies:
Foreign Trade - U.S. Trade with India
Foreign Trade - U.S. Trade with Germany
Foreign Trade - U.S. Trade with Japan
Foreign Trade - U.S. Trade with France
Foreign Trade - U.S. Trade with European Union
Foreign Trade - U.S. Trade with Italy
One question would be just how is this sustainable?
Another is that if you look at the statistics, most trade balance ( or imbalance as it may ) is relatively steady with the older trading partners.
China OTOH is growing exponentially, due not in small part to their currency manipulation.
In addition, I find your statement quite astonishing regarding the US being hurt by loosing 92B of trade, yet China could be casual about the loss of 7% of their GDP.
Specially when you consider the difference in profit margins prevalent in the two countries.
So please, quit spewing stuff about us still making stuff here. We do, and likely will in the future. That however has nothing to do with the problem or questions at hand.
I have not heard of the Buffet idea before, but I was thinking something along those lines.
Free trade as it exist right now is more of a "free for all" when it comes to this country, and apparently we're seeing the consequences.
Once again, the debate about the dumb unwashed public and the greed-enriched corporate environment that exploits them is brought to light.
All read what you will into it.
05-04-2011, 01:22 PM #20
I agree that trump seems self serving, But I like his aggressive attitude.
Personaly I really like Obama, but sometimes he seems too focused on trying to
make all parties happy. Sometimes you just need to kick a little ass. It feels to me
that Obama is treading too lightly. He doesnt want to step on anyones toes.
I just wish he was more a certive sp?