Carrot or the stick- Tax cuts and trade!
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    Default Carrot or the stick- Tax cuts and trade!

    I have a customer whose stated goal is to send everything to china.
    I get it… it is cheaper!
    As a consumer I make many choices by price. Harbor freight would not exist if many did not make such financial decisions.
    Trump has cut taxes…overdue!
    Trump is now engaged in a trade skirmish in the hopes to right the ship.
    I believe where he went wrong is by using tariffs (the stick) when he should be using the carrot.
    Instead of tax cuts for corporations he should have gave a tax credit (the carrot) for corporations who hit targets of domestically sourcing products.
    Bottom line is corporations will only respond to running the numbers, and whatever way makes fiscal sense is pursued.
    We didn’t get to this trade imbalance overnight and it will take some time to fix the problem.
    If corporations were incentivized to source domestically by way of tax cuts over time it will change.
    The triggering threshold for a tax cut could increase over time and start a trend where demand and manufacturing could over time grow.
    One thing I know is you cannot control others you can only control yourself.
    This cannot be fixed overnight.
    Even if China conceded overnight to equalizing trade we could not pick up the slack.
    Manufacturing has slowly been killed over decades.
    I have no illusions of Chinas ability to deliver quality parts.
    China is more than capable of doing so….I am not bashing China.
    They are doing what is necessary to protect their interests…we cannot control them.
    So why not try to control what we can…ourselves!
    Employ tariffs where necessary 2.5 percent vs 25 percent for cars for example.
    Incentivize and reward corporations financially for sourcing domestically! Once the numbers make sense they will make a logical decision to do so and China does not have to be in the conversation
    Until it makes sense financially it will never happen. Government has to provide the environment for such decisions. China and corporations will not respond to an internal moral compass.
    Corporations will only run the numbers

    China will, like any one of us welcome another PO

    Thoughts?
    Last edited by mcmachine; 04-06-2018 at 01:12 PM. Reason: font size

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    simple increase tariffs on everything 25% per year to give the 4 to 5 years for factories in the usa to be designed built installed and up and running with people trained. i have seen it before many times need years to build factories and get people trained but can be done has been done will be done again
    .
    fact is China is big and all usa trade is a drop in the bucket to them. trade with the rest of the world worries China 10x more. usa is nothing to China to even consider to worry about

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    China is an unusual case. The government controls virtually all economic activity and conducts trade like most countries conduct war. Many countries have been unhappy about it but were afraid to make much noise about it while countries like the U.S. seemed to go along. This administration is the first to actually play hardball rather than bluff and then back down. While China's rapid rise has been a boon to many of its citizens it has also allowed a massive buildup and modernization of its military. This duality is putting the U.S. in an extremely adverse position.

    Many defense critical items now come mostly or exclusively from China, putting our national defense at severe risk. Within another decade the trend likely would have been irreversible. The current administration has been pushing back in numerous areas in an attempt to reverse course while it is still possible. While the U.S. is still a mighty nation "outsourcing" of critical industries has left our defense industries vulnerable to cutoff of overseas sources in potential future conflicts, meaning that once existing stocks and reserves were used up there would be no more and we could not replace destroyed equipment or field new designs.

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    In a modern jet fighter or stealth aircraft is there an American manufacturer who could supply the video screens in the cockpit or are they all sourced from China?
    Bill .

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    ^^^ US military avionics typically come from US companies or JV's between US companies and companies from NATO or ABCA countries (Israel and Japan getting a piece in some cases). The F-35 display is made by L3, the contract for the follow-on (IIRC) Block 4 display was awarded to Elbit America.

    F-35 parts come from all over the place. That is a by-product of the way the program was designed- partner countries get a piece of the production. If you don't field the AC, you don't get to share in the manufacturing.

    There are strict rules regarding sourcing components, and China is not favored- even to the extent that certain Chinese manufacturers are expressly excluded. I would be very surprised if there were displays from China in any US or NATO AC. We're talking about specially ruggedized displays that are not mass production items.

    Quote Originally Posted by Scottl View Post
    ...Many defense critical items now come mostly or exclusively from China, putting our national defense at severe risk.
    Examples?

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    I think that cutting the tax on corporations in and of itself should have incentivized our corporations to do just that. I suppose it could be incentivized in that way and yet it is widely known China has not adhered fairly as regards trade and so here we are and someone who does lot look the other way or says China has been completely compliant when the facts show different those kind of stick your head in the sand are not the kind of person’s to confront these problems which have existed for over a decade. If that were us doing these kinds of outlaw type of behavior we would have been called on it some time ago. Not sure if your suggestion would work yet some form of encouragement to find more markets we can sell to in China seem very positive to me in principle.

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    Quote Originally Posted by jancollc View Post
    ^^^ US military avionics typically come from US companies or JV's between US companies and companies from NATO or ABCA countries (Israel and Japan getting a piece in some cases). The F-35 display is made by L3, the contract for the follow-on (IIRC) Block 4 display was awarded to Elbit America.

    F-35 parts come from all over the place. That is a by-product of the way the program was designed- partner countries get a piece of the production. If you don't field the AC, you don't get to share in the manufacturing.

    There are strict rules regarding sourcing components, and China is not favored- even to the extent that certain Chinese manufacturers are expressly excluded. I would be very surprised if there were displays from China in any US or NATO AC. We're talking about specially ruggedized displays that are not mass production items.

    Examples?
    You're right but asking Scottl for examples is a waste of time. All US problems are caused by "the left" and it makes no difference if that's a country or people.

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    Quote Originally Posted by Spinit View Post
    I think that cutting the tax on corporations in and of itself should have incentivized our corporations to do just that. I suppose it could be incentivized in that way and yet it is widely known China has not adhered fairly as regards trade and so here we are and someone who does lot look the other way or says China has been completely compliant when the facts show different those kind of stick your head in the sand are not the kind of person’s to confront these problems which have existed for over a decade. If that were us doing these kinds of outlaw type of behavior we would have been called on it some time ago. Not sure if your suggestion would work yet some form of encouragement to find more markets we can sell to in China seem very positive to me in principle.
    Who has said China "has been completely compliant"? Can you name a single country that is even close to that?

    Want to unite a country? Threaten it.

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    This is why you have to take China out of the picture
    A trade war is a waste of time, I think it will never materialize as such because it won't work
    You cannot change China
    Given that you can only incentivize change here.
    Trump should never have given tax cuts across the board but only to companies who change the trend to domestically source.
    A lot of people are hopped up on tariffs on material from China.
    All it does is make american job shops like me less competitive.
    Example:
    China still has access to cheap material and can make parts, ship them here for little more than I can buy the material here.
    When it is a finished goods shipped here....no tariff!
    How do compete with that?
    Trump is all upset with Amazon for their taking advantage of the Post Office.
    What about the Post Office subsidizing the shipping of goods from Asia?
    An equal playing field would be helpful
    Create a business friendly climate here!

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    Quote Originally Posted by Gordon B. Clarke View Post
    Who has said China "has been completely compliant"? Can you name a single country that is even close to that?

    Want to unite a country? Threaten it.
    it has been implied by numerous people unaware of any WTO violations. When you say name one country the fact is they are more inclined to say nothing especially if their trade with China goes off great without any pain or unfairness felt. No EU countries have to my knowledge been supportive of anything approaching a challenge to China.

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    Quote Originally Posted by mcmachine View Post
    ...Instead of tax cuts for corporations he should have gave a tax credit (the carrot) for corporations who hit targets of domestically sourcing products.
    We have done tax credits for companies that manufacture domestically. It helps, but it's not nearly enough and they were just temporary.

    The tax cuts help make U.S. companies more competitive globally, and make the US more attractive as a place to locate.

    Tariffs are protectionist measures, pure and simple. Not saying they are necessarily bad- just protectionist.

    Our trade deals favor US AG at the expense of US manufacturing. The deals harm the AG sector of the partner country and benefit their manufacturing sector. They are crammed with special carve-outs and exemptions for certain companies that have political clout.

    Trump is trying to alter the status quo. This is why AG is screaming bloody murder right now- and it's a very powerful lobby in D.C.

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    Quote Originally Posted by jancollc View Post
    We have done tax credits for companies that manufacture domestically. It helps, but it's not nearly enough and they were just temporary.

    The tax cuts help make U.S. companies more competitive globally, and make the US more attractive as a place to locate.

    Tariffs are protectionist measures, pure and simple. Not saying they are necessarily bad- just protectionist.

    Our trade deals favor US AG at the expense of US manufacturing. The deals harm the AG sector of the partner country and benefit their manufacturing sector. They are crammed with special carve-outs and exemptions for certain companies that have political clout.

    Trump is trying to alter the status quo. This is why AG is screaming bloody murder right now- and it's a very powerful lobby in D.C.
    i know it was China who decided to go after agriculture here because they selected that market for possible tariffs. I think this is a shame as farmers have not been taken care of historically here in the US especially small family owned farms versus corporate farming which has a big place in trade with China.

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    Quote Originally Posted by Spinit View Post
    it has been implied by numerous people unaware of any WTO violations. When you say name one country the fact is they are more inclined to say nothing especially if their trade with China goes off great without any pain or unfairness felt. No EU countries have to my knowledge been supportive of anything approaching a challenge to China.
    After Tienanmen, the EU lined up with us and embargoed arms sales to China. That was a huge setback to China's military modernization, and came at an expense to EU defense companies. AFAIK, the only cheaters were the French, but we already know they would sell you a tank to run over your grandma.

    The EU is softer towards China on trade than we are because it does not impact them the way it impacts us. But they have shown willingness to challenge China when it counts.

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    Quote Originally Posted by Spinit View Post
    i know it was China who decided to go after agriculture here because they selected that market for possible tariffs. I think this is a shame as farmers have not been taken care of historically here in the US especially small family owned farms versus corporate farming which has a big place in trade with China.
    I have no tears to shed for AG, sorry. They are already hugely subsidized.

    China threatens Soybeans because they know what will happen in D.C.

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    Quote Originally Posted by mcmachine View Post
    [FONT=Arial][FONT=Arial Black][SIZE=3][SIZE=5][SIZE=1][SIZE=2][FONT=Arial][SIZE=1][FONT=Arial][SIZE=2]I have a customer whose stated goal is to send everything to china.
    I get it… it is cheaper!
    It's time to get a new customer.

    I respect your preferred method over President Trump's, but China is about to find out (the hard way) that Trump can be very difficult. Unlike most politicians he's not afraid to loose,

    he's gambling with "house money".

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    Quote Originally Posted by otrlt View Post
    It's time to get a new customer.

    I respect your preferred method over President Trump's, but China is about to find out (the hard way) that Trump can be very difficult. Unlike most politicians he's not afraid to loose,

    he's gambling with "house money".
    Which is to say he’s gambling with our nation.
    Considering his track record I’m not comforted.

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    Quote Originally Posted by Miguels244 View Post
    Which is to say he’s gambling with our nation.
    Considering his track record I’m not comforted.
    I'm aware of your concern, but let the Chinese be warned; They are dealing with a volatile character, the likes of which they have never dealt with before.

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    Quote Originally Posted by otrlt View Post
    I'm aware of your concern, but let the Chinese be warned; They are dealing with a volatile character, the likes of which they have never dealt with before.
    They don’t care...we could close our boarders completely and they’d just sell to the rest of the world.
    They don’t need to.
    Remember, he’s declared bankruptcy and walked away when he didn’t get his way.
    Do you think it’s a good idea to put our nation in the hands of a...volatile character?

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    Quote Originally Posted by Miguels244 View Post
    Do you think it’s a good idea to put our nation in the hands of a...volatile character?
    I'm not a big fan of Trump, and allot of us here have gone much further in the displeasure of his tact, but no other politician has ever acknowledged the importance of our craft. If he's willing to take a hit in defense of our manufacturing base ... I'm with him all the way.

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    Quote Originally Posted by otrlt View Post
    I'm not a big fan of Trump, and allot of us here have gone much further in the displeasure of his tact, but no other politician has ever acknowledged the importance of our craft. If he's willing to take a hit in defense of our manufacturing base ... I'm with him all the way.
    Really...
    Then why jack up the prices on our materials.
    He has zero interest in manufacturing except as a way to get people to look at him.

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