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Sales for Volvo in the U.S. in 2017 were a modest 81,504, or a little more than one-fourth of BMWs sold in the U.S. But sales are running 30% higher through September in the U.S.. Worldwide sales are on track for another great year, with sales up 14.3% through September. The company had record sales last year and is expecting to top last year’s level. China is Volvo’s biggest market today.
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While it is good news for jobs in South Carolina, already the home of BMW’s biggest auto plant in the world, no good deed goes unpunished. Volvo Car USA senior vice president Anders Gustafsson says that the plant’s growth and hiring is going to be held back because the Trump White House tariffs on Chinese goods has in turn moved China to impose new 25% tariffs on exports from the U.S., which will impact the ability of Volvo to export planned volume of S60 and V60 to China. And Gustafsson says that Volvo is not getting an exemption despite the company’s Chinese ownership. “We are just getting started, so we can adapt to changing conditions….we have no rocks in our backpack, so we will grow the plant according to the conditions we face.” But make no mistake, the company has been vocal with lawmakers, even in South Carolina’s “Trump country” that it is unhappy with the situation after committing to a plant in the Palmetto state.
China and the EU have joined a group of countries asking the World Trade Organization to investigate the Trump administration’s decision to impose metals tariffs on national security grounds, creating a new front in a trade war that has shaken global markets.
The move sets the stage for a showdown at the WTO that some fear could either lead to a U.S. exit or a flood of new protectionist measures invoking what has until now been a rarely used national security loophole in global trade rules.
The U.S. has said the tariffs on imported steel and aluminum imposed earlier this year are allowed under the WTO’s national security exemption, which permits governments to take “any action which it considers necessary for the protection of its essential security interests.” This has drawn the ire of affected countries, many of which are close American allies, such as the European Union and Canada.
Countries so far have refrained from challenging that at the WTO. But in a statement issued Thursday, Norwegian Foreign Affairs Minister Ine Eriksen Soreide said her country and other nations had chosen to request the establishment of a dispute panel at the WTO.
“We believe that the U.S.’s additional duty on steel and aluminum is in violation of the WTO rules,” she wrote.
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The Trump administration says tariffs on Chinese imports will shift manufacturing back to U.S. factories, but some small and midsize companies that have done just that say the tariffs are hurting, not helping, their business.
Kent International Inc., a bicycle company, opened a factory in Manning, S.C., in 2014 to start assembling some of the bicycles it sells to Walmart Inc. and other retailers. It currently employs about 167 people.
Kent planned to expand the facility next year by importing steel tubes cut in China for painting and welding. It planned to hire another 30 to 40 workers at the plant, which assembles about 300,000 of the roughly 3 million bicycles the company sells world-wide each year.
“When we started getting wind of tariffs and were confident cut tubes would be subject to the tariffs, we stopped,” said Arnold Kamler, majority owner of the company and its chief executive for more than 30 years. Instead, he is traveling to Thailand, Vietnam, Cambodia, the Philippines and Taiwan to find new suppliers for Chinese products hit by tariffs.
“We are not bringing jobs back to America with this thing,” Mr. Kamler said. “We are bringing jobs to different countries in Southeast Asia.”
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Companies that have brought manufacturing back to the U.S. say tariffs are raising their costs and making them less competitive.
“It’s hard to build things here,” said Manville Smith, a vice president at JL Audio Inc. “It would be nice if our government would help us, not hurt us.”
Mr. Smith and other smaller manufacturers said they are disadvantaged under the current tariff rules. Chinese-made finished goods that use the same components often can enter the U.S. from China without paying these duties. So, a Chinese loudspeaker avoids the tariffs, but one assembled at JL Audio’s facility in Florida faces a 25% duty on key parts next year. A European loudspeaker would also avoid the tariffs, even if it used Chinese components.
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Companies hit by the tariffs aren’t simply raising prices to offset the added costs. Some business owners say they are delaying plans to expand their U.S. footprint, looking at dropping product lines or shifting production offshore.
“Overall, manufacturing in the short-term in the U.S. is worse off because of the tariffs,” said Harry Moser, founder of the Reshoring Initiative, a nonprofit that helps manufacturers make decisions about relocating production.
President Trump “is 100% right in working to reduce the trade deficit and bring manufacturing jobs back to the U.S.,” Mr. Moser said, but “we feel he has not chosen the optimal tool to achieve that objective.”
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In a letter to the USTR, Walmart said tariffs on Chinese components “have the potential to undermine” the retailer’s reshoring efforts. “Tariffs on intermediate goods make little sense when the stated goal of the Administration is to increase manufacturing and jobs in the United States.”
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Light & Motion Industries, a specialty lighting company in Marina, Calif., with about 45 employees, is shifting production work abroad because of the tariffs. It has lined up factory space from a Philippines supplier to put together battery powered lights that are now assembled in the U.S.
Companies seeking to avoid the added cost of tariffs are bad news for contract manufacturers such as Mitchell Metal Products, based in Merrill, Wis. Last year, Mitchell won the first national Reshoring Award, issued by the Reshoring Initiative and the Precision Metalforming Association.
The 64-year-old company has won bids to make parts used in nursing home beds, furniture, and lawn and garden equipment, showing it is within 20% of the total cost of purchases from foreign suppliers.
But the math moved against the company, which has just over 80 employees, after domestic steel prices climbed by 40% or more in response to tariffs on imported metals earlier this year.
“Since the onset of the tariffs, we have not won a single reshoring award,” said the company’s president and co-owner, Timothy Zimmerman, who worries that some business he’s won could go away. “I don’t sleep well at night.”
We were told that if Donald Trump were to get elected, we'd be winning so much that we would become bored with winning. To be fair, some good developments have taken place under this president. A fast-growing economy, a palpable business optimism, a much-needed lower corporate tax rate, and fewer regulations come to mind.
However, when it comes to trade policy, America doesn't look like a winner. What are being sold to us as big victories are actually aches and pains for many American businesses and consumers. Let's recap:
In January of this year, the Trump administration imposed tariffs on imported solar panels and washing machines. Americans now get to pay a good 16 percent more for washers and dryers, and both China and South Korea filed complaints against the United States before the World Trade Organization.
In March, the Trump administration announced that our national security required imposing metal tariffs on our NATO allies and a few other countries. The steel and aluminum industries considered this a big victory for themselves—other American interests and downstream metal-consuming industries, not so much.
The American firms that use those metals to produce their outputs face much higher input prices due to the import tax and have seen their costs spike. Even those that only source metal from within the United States report higher costs and a more difficult business environment. Far from being winners, these firms are domestic losers in the ongoing trade disputes. As a result, they've filed over 34,000 separate requests to be exempt from the tariffs that are destroying their businesses. Yet very few have been heard, and even fewer have found relief.
Almost every country targeted by the administration has since retaliated with tariffs against U.S. exporters. American companies, like Harley-Davidson, have been caught in the crosshairs. That didn't seem to convince the administration that, contrary to its claim, trade wars are neither good nor easy to win. So it went ahead with imposing several more rounds of tariffs on China, which didn't waste any time before retaliating with its own tariffs.
American farmers, like soybean exporters who faced 25 percent tariffs in China, found themselves losing in the global trade dispute. They made their distress known by requesting and receiving some subsidies as compensation for export fallout. But these government handouts won't be enough if the fight continues.
In what the administration claims to be its biggest win so far, the United States, Mexico, and Canada finally reached a deal on NAFTA 2.0. However, as the Cato Institute's Dan Ikenson explains in detail, the new United States-Mexico-Canada Agreement (USMCA, as it's now called) is the best trade deal ever negotiated—except for all of the others. For example, it makes very little progress on tariffs since there wasn't really much room for improvement, with the exception of U.S. dairy exports to Canada.
The revised auto section of the deal is awful, too. It will increase Americans' cost of buying cars, reduce the U.S. automobile industry's competitiveness, and increase the offshoring of some sectors of the auto industry. These ill effects are on top of the hit these companies already took due to the steel and aluminum import taxes. Automakers will probably support USMCA because a deal is better than no deal, but not many outside of the West Wing are happy about this.
In theory, the goal for all of this trade disruption was to negotiate lower tariffs. In reality, it hasn't worked. Global tariffs have gone up. That's a bummer for the small and midsize companies that moved production back to the United States from China before the trade dispute started. Over 50 percent of the U.S. tariffs on Chinese imports are on intermediate goods, parts and materials used to make finished U.S. products. This reality means that production costs have increased for these firms dramatically.
Making matters worse, these companies now have to compete with foreign imports of final goods whose costs haven't been raised by tariffs and hence are cheaper but of equal quality. In the end, these small U.S. firms have to raise their prices, fire workers, and/or postpone plans to expand U.S. production. Some companies are actually moving some of their businesses back abroad.
The bottom line is that when it comes to trade, this type of winning sure looks a lot like losing.
Alaska - A log export deal that promised to bring up to $1 million a year to the foundering Mat-Su port is on hold indefinitely.
Chinese tariffs are largely to blame for suspension of the planned export of Susitna Valley logs to China, according to the company behind the venture.
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"There's no loss of interest, loss of appreciation or passion for this project," Denali Timber Management owner Eric Oien said Wednesday. "We're in a suspended position, meaning there's an unexpected abrupt market disruption that we're essentially waiting out."
Starting over the summer, President Donald Trump's administration imposed tariffs on $250 billion worth of Chinese goods. China responded with tariffs on U.S. products.
Amid the trade battle, Chinese tariffs on certain U.S. logs started at 10 percent last month and could rise to 25 percent in January, according to several reports.
Some salmon products important to Alaska producers were pulled from a list of Chinese goods imported to the U.S. and subject to tariffs last month.
Oien said he expects no similar help for Alaska timber.
The logging contractor doing the work on Thursday blamed three things for the suspension: tariffs; lowered prices and currency devaluation on Chinese markets; and issues with Chinese customs officials facing U.S. wood exporters.
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Borough officials estimated the project could drum up roughly $900,000 a year in wharfage, dockage and rental fees at the port, which is losing $800,000 to $1.5 million each year. Costly unrelated repairs are underway even as few if any vessels call at the docks.
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Birch and spruce prices plummeted nearly 20 percent that month "due to currency fluctuations and negative sentiment brought on by the elevating trade dispute," according to information Denali put together in August for members of the Alaska congressional delegation and Anchorage economic development officials. At that time, a 25 percent tariff on wood exports to China was predicted.
Wood that could have grossed almost $1 million on the export market instead may be sold as firewood or on fiber or chip markets, Oien and Nash said.
Denali stopped logging and, local residents say, ordered work associated with the Chijuk sale stopped too.
"One Monday morning, they suddenly just pulled out," said Trapper Creek resident Donna Massay, who lives along Oilwell Road. That was at the end of July.
Massay said she also saw logging trucks roll out last November, with four truckloads of wood samples to be sent to China before the project got underway.
"The mess is still laying on the ground," she said, adding that could fuel beetle outbreaks in area forests at the heart of a massive infestation already.
In China’s manufacturing heartland around the Pearl River Delta, Donald Trump’s 10 percent tariffs are causing little concern. The 25 percent duties that loom next year are another matter.
Ben Yang, a furniture maker producing contemporary designs out of his facility in Dongguan -- about 30 miles from Hong Kong -- says that if those higher charges materialize from January as planned, the U.S. share of exports from his Sunrise Furniture Co. could plunge from 90 percent to less than a third.
“Our major rival is Vietnam and 10 percent tariffs aren’t enough to make the difference,” said Yang, 48, who supplies retailers including Rooms To Go Inc. “But 25 percent tariffs are a worry. There will definitely be a short-term impact; Americans may have to accept higher prices.”
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The government has effectively shelved its campaign to curb indebtedness and added limited stimulus measures, and the approach of tariffs has actually helped boost sales abroad as exporters rush to beat the higher charges.
"The impact of China-US trade frictions on Chinese companies is limited overall, and the risks are controllable," according to Gao Feng, Ministry of Commerce spokesman. Most companies are confident and all levels of government are introducing measures to help companies through these tough time, he said at a regular briefing on Thursday.
"To those whose products are highly competitive, and difficult to replace, the impact is little. To those whose products can be replaces, the impact is that the costs have increased and the orders have reduced. Only very few companies face the danger of shutting down and cutting jobs," he said.
The muted impact of Trump’s tariffs on China’s manufacturers so far is expected to be confirmed in third-quarter economic data scheduled for release Friday. The economy, in the throes of a policy-induced slowdown, is seen ticking down a notch with gross domestic product expanding 6.6 percent from a year earlier, according to the median estimate of economists in a Bloomberg survey.
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natsb88 wrote::lol: (parody of a popular song, in case you aren't familiar with it)
Recyclersteve wrote:natsb88 wrote: (parody of a popular song, in case you aren't familiar with it)
What is the song being parodied and who sings it?
natsb88 wrote:China's Factory Heartland Braces for Trump's Big Tariff Hit
10/18/18“Our major rival is Vietnam and 10 percent tariffs aren’t enough to make the difference,” said Yang, 48, who supplies retailers including Rooms To Go Inc. “But 25 percent tariffs are a worry. There will definitely be a short-term impact; Americans may have to accept higher prices.”
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https://www.bloomberg.com/amp/news/arti ... tariff-hit
Thogey wrote:Totally, because our survival depends on cheap chinese furniture.
natsb88 wrote:Thogey wrote:Totally, because our survival depends on cheap chinese furniture.
Where did anybody ever claim that?
works in our favor. They(the Chinese) are not our friend. Their goal is to get the US dependent on 700 million chinese slave workers then pull the rug out from under us. Their long term goal is to bury us. Our goal should be to put them in their rightful natural place. Doing business with the Chinaman is murder! They make a deal, shake hands on it, then shop it. I could care less how this is fixed, tariffs or otherwise. But it needs to be fixed, doesn't it?these are products that sell at price point (X) when people have (X) disposable income available after essentials to spend on their hobby, curiosity, home improvement, pets, vehicle accessories, sport of choice, entertainment, convenience, etc., but do not sell when people have (X - 25%) to spend and the product price increases to (X + 25%).
Tourney64 wrote:I agree the tariffs hurt the economics of many businesses in the short term, but this is also about protecting US technology from being stolen by China. The question is who will be hurt worse by the tariffs?
Thogey wrote:Jesus you spend a lot of words explaining the obvious.
Thogey wrote:Chinese lives on 10 bucks a day.
Thogey wrote:They make crap (except for Norinco AK's).
Thogey wrote:We need to shift manufacturing here and learn to do business better So we are not dependent on Chinese imports and their market manipulation.
Thogey wrote:They(the Chinese) are not our friend. Their goal is to get the US dependent on 700 million chinese slave workers then pull the rug out from under us. Their long term goal is to bury us. Our goal should be to put them in their rightful natural place. Doing business with the Chinaman is murder! They make a deal, shake hands on it, then shop it. I could care less how this is fixed, tariffs or otherwise. But it needs to be fixed, doesn't it?
If we want more domestic manufacturing, we have to make the US a more hospitable place to establish and grow manufacturing businesses. That would mean reducing payroll taxes, reducing fuel and energy taxes, reducing regulatory and compliance burdens, NOT increasing the cost of raw materials and components through tariffs, not giving overpaid unions government backing, and reducing or eliminating many other government barriers, burdens, and nickel-and-diming.
Thogey wrote:How long have the tariffs been in effect?
Thogey wrote:Maybe we could get this and wages down to 10 bucks a day in Pa. We could wall the state off and compete by using the workers there. That would be more hospitable. Because that's the kind of $hit they do in china.
Thogey, you're throwing a lot of strawman arguments out there lately. That's supposed to be a leftist snowflake thing, no?
Hey, Chuck Schumer likes the Trump tariff plan, so that's something
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