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  1. #21
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    Mexico has always been a buy your way in.
    It's like part of the culture there. My first experiences with trade and sales in the early 80's.
    Different than the US. China is different in another way.
    Africa is at the moment a lost hope. India not so much.
    Vietnam is showing up so with my age WTF is going on with that?
    So who lost to China and will gain ground?
    For sure Mexico as this was huge. Japan second and waiting in the wings?
    Have we forgotten cursing the names of these other places for stealing US jobs?
    Should we put up a wall?
    Bob

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  3. #22
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    Quote Originally Posted by EmanuelGoldstein View Post
    Don't think so .... well, a little but not hugely

    Mexico is too corrupt and unsafe. India has been trying to do the China trick for thirty years and failed. Africa ? ha ha. Vietnam, Malaysia, Singapore, yeah right. Tiny little places. And the US companies already moved all their shit to China. They would have to buy all new to do that trick again, they cannot move it out. And they would also have to give up a bigger market than the US is.

    Trouble with prognostications from political/economic writers is they don't have their feet on the ground. They think "Oh, just move the factory !"

    Right.

    This oughta get interesting
    I am guessing its been a long time since you were in Mexico. Its got its corruption and its unsafe neighborhoods- as do most american cities. But its a huge manufacturing country these days, with reliable infrastructure, a decent education system for engineers, lots of subcontractors, and things like the 7th largest auto manufacturing industry worldwide, and its the 4th largest exporter of autos. They manufacture a LOT of electronics, white goods (fridges and washers) clothing, and more.
    300 Aerospace factories. 650 Medical Device manufacturers. 10 major automotive companies have plants there. Guadalara, alone, one city, makes $150 Billion a year worth of electronics. They are the fifth largest exporter of home appliances globally.
    They have high speed internet, fancy gourmet restaurants, and own a ton of gigantic US companies. Cemex has been upgrading and modernizing all the american cement companies it has been buying, bringing them up to the Mexican standards of GPS tracking of trucks for JIT delivery of cement to jobsites.
    Mexico aint what you remember from when you went there in the 70s and drank cheap beer in Rosarita.

    They have the capacity, infrastructure, financing, and easy path to building factories, along with the skilled workforce.
    they are going to be doing just fine taking on Chinese lower value added lower tech products- not as low as Vietnam and Bangladesh, but TVs, computers, chip fabs, aerospace, and higher end manufacturing- they have it already going on- its just a matter of plant expansions, not starting from scratch.

    The subway in Mexico City is cleaner, better run, and more modern and reliable than in New York, or Boston. The dedicated Bus lanes with giant stations are better than pretty much any US city. They have better musuems and universities than most of the US does. But you can still get a taco on the street for a buck.

    A few things they already make in Mexico-
    Most Bose speakers.
    Fender guitars.
    Colgate and Crest toothpaste.
    Lear Jets,
    Pirelli tires.
    New Holland tractors
    Vizio big screen TVs.
    Whirlpool washers
    Carrier air conditioners.

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  5. #23
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    Quote Originally Posted by EmanuelGoldstein View Post
    Don't think so .... well, a little but not hugely

    Mexico is too corrupt and unsafe. India has been trying to do the China trick for thirty years and failed. Africa ? ha ha. Vietnam, Malaysia, Singapore, yeah right. Tiny little places. And the US companies already moved all their shit to China. They would have to buy all new to do that trick again, they cannot move it out. And they would also have to give up a bigger market than the US is.
    Yeah - that's the thing. As long as China insists on local manufacture with all the opportunities for forced local partnership and transfer of IP, refusing their terms is losing a market with a population 3X that of the USA. OK it's not as wealthy a market but it's still huge.

    Probably the only way around that is to build the things they *have* to have at home, guard the IP including manufacturing process carefully, and let them have the 2nd & 3rd tier stuff in their local factories, knowing that they're going to violate any & all agreements by building competing products as soon as possible.

    Or work with other First World countries on better protection via import restrictions & (gasp) tariffs on ripped off products. But this one is hard because of who benefits versus who pays extra. Also the chances of the current US government managing to negotiate such a deal with the EU or the other TPP members is approx zero. Speaking as an Australian, first we'd have to be able to trust you and currently, we don't.

    PDW

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    Of the 6 big jobs on shop floor right now, 2 are buildings for car maker...in Mexico. 2 are tents for a us based online retailer, for us distribution…. Nissans Mississippi plant, mostly tents.
    I welcome removing tarrifs on Canadian tube/pipe. Tariffs for leverage is just il-thought. Dumping, like Turkey and south Africa (mostly pipe- that stunk, like foul smelling) were doing is valid (not hating Turkey, love the forging equipment, about to use Turkish angle rolls - good products). We can not blame china for stealing jobs, you gotta respect the play of offering a product, finished, to almost any company, and then in return get ip on everything. Bean counters built the offshoring empire, not the union/non union worker here or there (insert country of week in there slot)

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  9. #25
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    Sorry if this turns out to be a long read but eventually I'll try to get to my point...


    I have to wonder if i'm the only member here that lives in Asia or even visits and sees these tariffs are really hurting America. Now, I work in China, Vietnam, Cambodia, and the Philippines but live on the former U.S. naval base in Subic bay Philippines. I noticed before the taxes/Tariffs went into play loads of Chinese business men moved here to Subic Bay Freeport zone and Clark Economic zone in the Philippines. For those that don't know these are the two main air force and navy bases that the U.S. abandoned and just gave them to the Filipinos. They didn't just give it to them they actually gave them a tax break hoping to bring manufacturing to the Philippines. In a nutshell America just said anything you send the the U.S is flat 6.5%. Well Hello China! These guys had a plethora of shipping companies setup on the bases before the tariffs even started. Now when a customer in USA orders something it gets diverted to the Chinese shipping company in the Philippines then onward to USA at 6.5%. No matter what USA does they will find a way to circumvent the system. Now, I'm not saying they do this with everything that comes out of China but there is so much that what once took me 45 minutes to drive across the base now takes an hour and a half because of the shipping trucks.


    Moving on to how china is hurting American manufacturing with its tariffs. I'll start with my personal experience in China. In 2014 a European guy called me in the USA who found me through Practical Machinist and ask if I wanted to run his factory. I went for a visit and he tossed out a number that I wasn't about to turn down. I moved there and basically there where 4 Chinese machines and 4 Taiwanese Feeler machines. At this time it was 8 machines running 18 hours a day 7 days a week and they still outsourced 80% of their work to other shops (not bad for an immigrant that started the business a year earlier with $5,000 outsourcing work from a hotel room in Shenzhen). Anyways, I was told here's 80,000 square feet and the bank account number, fill it up until we don't have to outsource anything else. Next day I call the local Haas dealer and ask what they had in stock. I was dead set on American made.



    Over the next two years I loaded that place down with American made machines. I had spent just shy of $16 Million on machines, tooling and software (all in America). I finished my contract up about two years ago and just started my own sourcing company. Ive kept in touch with the owner and they where already on there second 80k square foot building still bringing in Haas every two or three weeks. A few weeks ago I get a call from the owner kinda bummed out. He tells me that He had ordered 6 EC-400's with the pallet pool at $315k a pop. apparently they called him and let him know that the imposed China tariff was going to add $78,800 per machine so he had to cancel the order. He did some investigating and the tooling orders also had been adding tax so basically he had to cut ties with American products. The last email I got from him they had found that due to the tariffs he could buy a Hermle for the same price as a Haas and Ghuring tools where cheaper than Walter and Hanita. Now, just some rough figuring that's about $7M a year lost just out of one shop.


    Even Foxconn cancelled their order for 1000 Haas DT1's due to the Tariffs. That was a $6M hit for Haas. I know it wont break them but would have been a nice order and good job security for a lot of people. And this is only two shops. I have talked to several of my acquaintances in China and they are having to look elsewhere for their supplies too.




    I know this has been a bit long winded and maybe a bit off kilter but just wanted to put what my view from the front lines is. I'm quite sure the media in the states is not making people aware of China avoiding the Tariff punishment buy rerouting shipments through closed American military bases. Wow, wouldn't that be a story?!?!

    On a final note, One poster made a comment the you don't have to worry about Vietnam, Malaysia and Singapore. Uh, Don't be so quick to judge those little countries. Remember when I said I started my own sourcing company? A little known fact about these crowd funding sites is several of them have offices in Shenzhen. What they do is when someone reaches their goal they offer to have the product or project made at a low cost facility for a percentage of what the project goal was. In order to get on their vendor list all you have to do is register a business in Hong Kong and they will email you daily with loads stuff to quote. I've setup a small office on the base with 6 or 7 people in there strictly to send out RFQ's on the RFQ's I get. That little Vietnam? 70% of the quotes they send out are much lower than other countries I deal with. Granted its not always machine work, But whatever the item may be they have great pricing and the quality is second to none. They even beat out the Philippines and the labor rate for a Filipino machinist is just shy of $7.00 a day!

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    Quote Originally Posted by Ries View Post
    I am guessing its been a long time since you were in Mexico.
    You're right, I have not personally been to Mexico in ages. But have several acquaintances who go there to do factory work. Most of them are not allowed to go out alone. Mexican people living in China are afraid to go home. I've talked to many and it surprised me.

    If Mexico were going to become a manufacturing giant, they'd already be stocking the shelves at Walmart. They have huge advantages over China.

    But they are not.

    Not that they won't benefit some from this, but Mexico is not a good place, comparatively.


    A few things they already make in Mexico-
    Most Bose speakers.
    Fender guitars.
    Colgate and Crest toothpaste.
    Lear Jets,
    Pirelli tires.
    New Holland tractors
    Vizio big screen TVs.
    Whirlpool washers
    Carrier air conditioners.
    Pardon me but whoop-dee-do. All the professional baseballs are made in the Dominican Republic, too. Who cares ?

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    Wow, g-coder05, thank you for that post! That is a dose of reality that is hard to come by. The evasion of tariffs by transshipping through former USA bases there in the Philippines IS a big story we probably won’t hear much about, but should.

    You also lay out quite clearly the case for how idiotic The tariffs are for USA manufacturing, a real “own goal” .

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    Meanwhile farmers are getting 30bln bailout, and still going under.
    More cheap land for the big guys I guess.

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    Quote Originally Posted by EmanuelGoldstein View Post
    You're right, I have not personally been to Mexico in ages. But have several acquaintances who go there to do factory work. Most of them are not allowed to go out alone. Mexican people living in China are afraid to go home. I've talked to many and it surprised me.

    If Mexico were going to become a manufacturing giant, they'd already be stocking the shelves at Walmart. They have huge advantages over China.

    But they are not.

    Not that they won't benefit some from this, but Mexico is not a good place, comparatively.
    ?
    Drugs.
    The civil authorities are essentially fighting an insurgency.

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  18. #30
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    The Rawlings plant, which is in Costa Rica, not the Dominican Republic, makes around $10 million dollars worth of baseballs a year.
    Cemex, the Mexican cement company that is the 2nd largest cement company in the USA, grossed $18 Billion last year.

    Mexico already is a huge manufacturer, and at a pretty high tech level.
    And they will benefit mightily from these tariffs.

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    Quote Originally Posted by Ries View Post
    Trump just dropped the tariffs on steel and aluminum from Mexico and Canada. It will be interesting to see how, if at all, that affects retail prices on steel.
    Must be trumps tariffs on steel and aluminim for Canada and Mexico have fixed any problem that was supposedly there. So much winning. trump has no idea what he is doing and the senate is just going along with whatever he wants. Very sad days indeed.

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  22. #32
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    [QUOTE=EmanuelGoldstein;3358846]You're right, I have not personally been to Mexico in ages. But have several acquaintances who go there to do factory work. Most of them are not allowed to go out alone. Mexican people living in China are afraid to go home. I've talked to many and it surprised me.


    A coworker from Mexico says the same thing, many parts of Mexico are not safe and she is glad that she is no longer living there. Granted there are lots of places in the world that aren't safe including areas within large towns in North America, Mexico though seems to on another level. Recently watched a news program about popular Mexican resort towns and the number of murders each week due to competition between drug gangs.

    Dave

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    [QUOTE=Dave D;3359029]
    Quote Originally Posted by EmanuelGoldstein View Post
    You're right, I have not personally been to Mexico in ages. But have several acquaintances who go there to do factory work. Most of them are not allowed to go out alone. Mexican people living in China are afraid to go home. I've talked to many and it surprised me.


    A coworker from Mexico says the same thing, many parts of Mexico are not safe and she is glad that she is no longer living there. Granted there are lots of places in the world that aren't safe including areas within large towns in North America, Mexico though seems to on another level. Recently watched a news program about popular Mexican resort towns and the number of murders each week due to competition between drug gangs.

    Dave
    totally true- and completely irrelevant as to whether they are host to 8 different automobile companies factories, with around 1.7 million employees in auto manufacturing. Mexico is the fourth largest exporter of autos in the world, after Germany, Japan, and South Korea. You will notice that China and the US are both behind Mexico in auto exports.

    I am sure they are also big in the security guard industry- but the fact remains- they manufacture a LOT of stuff, and, traditionally, autos are right up there with steel and aerospace as indicators of how advanced the manufacturing base of a country is.

    I was in Mexico City a few years for my 35th wedding anniversary vacation, and I did not feel the least bit unsafe. I am sure if you try to buy drugs, you run into sketchy people, but frankly, I can think of a half dozen US cities that are much more dangerous feeling day to day. There are parts of Mexico that are drug war central, and there are parts that are making the $75 Billion worth of machinery and electronics they exported last year.

    to quote one of my favorite movies-
    Laugh while you can, Monkey Boy.

    or,
    to quote Satchell Paige-

    Dont look back- they might be gaining on you.

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    Mexico is complicated for good areas and bad.
    Sort of like Flint Michigan.
    Little sister was the head of commodity management for these auto plants.
    A a blond haired blue eyed girl she was forced by company rules to stay in a gated community.
    Any travel to and from the plants was with mandated bodyguards. With this heavily armed escort she never had a problem.
    I once traveled and worked this same area a while back alone, was never concerned and found all locals receptive and down right friendly even at late night.
    I also once would go alone anywhere in the north end of Flint at 2-3 in the morning as this was where I grew up. Now not so comfy.

    Good and bad people everywhere. Mexico has grown up on a underground type economy where what you may call payoffs, or a nicer name, gratuities are just the norm.
    As during the days of prohibition here most people, even those involved are just plain people who have a heart and are making a living.
    Too many people see only the news which highlights the worse of the worse and think that is real life.
    Bob

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  26. #35
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    Quote Originally Posted by CarbideBob View Post
    Too many people see only the news which highlights the worse of the worse and think that is real life.
    Which is why I was surprised that so many native Mexicans whom I talked to said the same thing as the newspapers ...

    There's no doubt that Mexico could benefit from this tariff crap, but I just don't see them overtaking China as a manufacturing country. China does not play by US rules but they do play by rules. Learn those and you are okay. Gangster-driven countries, that's a different story.

    To counteract Reiss' rosy picture I'll toss up Kaydon. Established company, good products, well known, moved to Mexico and no longer exist. It's not an uncommon story. SRAM also failed miserably in Mexico (but they fail everywhere they go, so that's no surprise.) I just don't see Mexico or India taking China's place. And the ittle places like Vietnam and Singapore, etc don't have the resources. We're talking big money here. Drive down from Beijing to Shenzhen and you will see hundreds of miles of factories.

    Something else that most people are not paying attention to : China has a couple of weapons that Trump does not have. The obvious one is they can quit buying US securities. The less obvious is if the tariffs actually started to hurt they can just drop the eexchange rate. The US can't do that but China controls its own currency. Internally, the exchange rate makes no difference to them. Since their gubmint would be perfectly happy to buy less imported goods, no loss to China. But we'd still be paying the soy farmers tens of billions, and all the small US exporters-to-China will go broke. The lobster guys can already kiss it off and the dairy, fruit, nut exports as well.

    When you have a country where one idiot can upset the applecart like this, in the future people are going to be a lot more careful buying from you.

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  28. #36
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    Obviously, a country of 130 million is not going to "take the place" of the most populous country in the world, and I have little doubt that China will be the number one economy before long.
    But that is not what I said, or the article I linked to said.

    Its a well known fact that the Chinese government has been intentionally shifting its economy to higher tech, more value added industries. After the 2008 global recession, 100,000 factories that closed in southeast China did not re-open- and that was an intentional move. The work they used to do has shifted to lower wage, less developed countries.
    Similarly, Chinese dependence on the US market, which, as I said, is currently around 3% of their GDP, is going down, not up.

    So its only logical that other countries, closer, more compliant, and hungry for the work, will take over some of the exports to the USA.
    The Chinese are cultivating many export markets.
    For that matter, so are the Mexicans.

    My point is that many people, most of whom have either never been to Mexico or China, have really dated views of the state of manufacturing, and the economies, in both.
    Especially americans, who travel very little, and, when they do, go to Cabo or on cruise ships.

    Both Mexico and China are not what you think they are. Both are rapidly becoming more modern, more able to manufacture and export very sophisticated stuff.

    Mexico will benefit from the less restrictive trade rules, and the geographical proximity, and export more to the USA.
    China will become less and less worried about the USA as a market, as it sells more and more to the rest of the world.
    Both have much better educated workforces, and are working to improve infrastructure more than the average American knows.

    These are both established trends, going back decades.

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    [QUOTE=Ries;3359033]
    Quote Originally Posted by Dave D View Post

    I was in Mexico City a few years for my 35th wedding anniversary vacation, and I did not feel the least bit unsafe.
    A feeling? I've had a few personal examples of 1 degree of separation from brutal multiple murders there. Personal safety and risk has shit to do with a feeling

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    [QUOTE=Mcgyver;3359317]
    Quote Originally Posted by Ries View Post

    A feeling? I've had a few personal examples of 1 degree of separation from brutal multiple murders there. Personal safety and risk has shit to do with a feeling
    How does this affect the number of auto plants, aerospace subcontractors, electronics plants, tire factories, consumer products factories, or other manufacturers in Mexico, and how they may or may not get increased business due to Chinese tariffs?
    How does this affect the ever increasing GDP of Mexico, the increasing export share it has in manufacturing?

    Regardless of your, or my, feelings of personal safety in Mexico City, how are actual foreign investors reacting to Mexico, in terms of building factories?

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    The question in the new tariffs is who wins if they stay in place?
    Mexico is a strange player due to the fact that the country they sit next to wants drugs and has money so many plus and minus.
    But behind that is what happenes if the tax or punishment goes away.
    It there a way back?

    Is it even possible that this brings the jobs back that we have lost in manufacturing.
    Or do we tax our own and proved subsides and payouts to those hurt with lost income?
    How and why does a right leaning go with what looks like handouts and just plain socialism to those hurt by all this?

    Should we let the soybean farmer in the midwest selling out there go way south.
    They were quite simply trading with the enemy and supporting them. Or maybe not and just playing on the world field.
    China was once off our radar as anything that mattered. Now a place to put blame and more importantly our whipping boy here in the US.
    Bob

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    Quote Originally Posted by CarbideBob View Post
    Should we let the soybean farmer in the midwest selling out there go way south.
    Perhaps "we" should have approached the problem in a more intelligent way so that the soybean farmers would not have to be "bailed out" ...

    The thing about Trump is, if he were a little smarter he could be a half-wit

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