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Tariff’s with China
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Joe@RFDG
Posted 2/6/2019 09:51 (#7300842 - in reply to #7300640)
Subject: RE: Tariff’s with China


Glenwood, Mn

kgbarnett22 - 2/5/2019 20:30 If we don't come to a deal and tariffs on things coming from china increase even more its going to put China products about the same price as American made products. Yes we pay more but we will be getting a better quality product. I always do my best to buy things that say made in USA. Unfortunately with the way china has stolen the market a lot of things aren't even available anymore that have that Made in USA sticker on them.

Bingo!  We priced another steel shed.  Sure enough "prices are up for raw materials 30%" is the excuse for the building being 30% more than two years ago.  OK.  So I guess labor, taxes, all other expense went up as well?  Nope.  Guy pounding the nails is making the same.  The construction company is taking a larger cut. 

Now don't get me wrong at all, everyone needs to make a buck but there is a fine line between being profitable and trying to gouge.  Just be honest, "Hey, construction is busy now and we want to make more money".  That I can live with.

We went through this with doing some fencing a few years ago.  Steel went up 20% and so did the wire immediately.  Wait a minute?  The shipping, retail, wire drawing process, dies, etc all went up 20% along with the materials?  Hog wash.  An guess what, prices have softened a little but not by much.  Certainly not back to where they were.

On the other hand I can see things like grain bins, which are mostly steel, being affected to a greater extent.  But again, the raw material price is still not 100% of the finished good.

No one asked for my opinion but the consumer driven society we live in produced this problem. It's not the Chinese fault they are filling a void for the cheap garbage we demand.  Just look around.  Nothing is Made in America.  I don't think there is really any quick fix.  When you consume more than you produce.... well, that's a deficit.  I am not sure why people have such a hard time grasping this concept.  We certainly export a lot less grains than we purchase in trinkets.  There was a chart a while back that was posted that stated it clearly.  Hell, we import more Chinese leather than we export all ag commodities.  Let that sink in for a bit.

https://www.marketwatch.com/story/heres-all-the-stuff-the-us-imports-from-china-thats-causing-a-huge-trade-deficit-2018-03-23

Until the consumer idea changes that we want and "need" cheap this will never change.  There is also a thing about the EPA, OSHA, etc.  They are necessary but at the same token are extremely restrictive.  Tanning leather (see above comment) is done in China?  Why?  Because of the regulations regarding the process.  FWIW, We run a machine shop and purchase a significant amount of raw billet material (plastic, aluminum, steel).  We have a policy here that we need to know the origin of our raw materials.  Reason, it needs to be of US or Canadian origin.  One for quality and two because of pride.  It does cost me about 30% more to buy American billet vs Chinese but it's well worth it in my opinion.

The other problem I have with the Chinese is corporate espionage.  It sounds like it's from a James Bond movie but I have two personal experiences with the Chinese stealing technology in the manufacturing sector.  The largest I know of I worked at a company that built medical devices.  They wanted to get into the Chinese market and were allowed under one condition, that they manufacture some of the product in China.  Don't get me wrong, they make some very fine electronics over there and this particular product was a pacemaker so things like bidding out the ASIC design an build probably was an OK fit.  So the company I worked for forked over 500 million (half a billion) to  build a new factory in China.  Everything seemed to go well and then all of a sudden "Poof", the deal was over..   Say what?  So here's what happened.  For manufacturing you need to have traceability.  These systems were tied into the mothership back here in the states.  Effectively giving someone with decent computer proficiency back door access. Granted someone in IT should have had heavier restrictions but bottom line is it happened and it wasn't an accident.  What they found out a YEAR later is every single manufacturing design and product document was downloaded and stolen by not one, but 7 different individuals! We are talking everything from future releases, to cancelled projects to stuff that was even designed before the computers were common.  All the way back to the 70's (docs were scanned and electronically stored)!  So now those individuals don't work there any more and guess what?  They start working for a competitor.  This is EXACTLY what we are talking about when we say corporate espionage.  It costs something along the lines of a billion dollars to bring a new pacemaker to market.  If you can simply download a design for fabrication you don't have any of that engineering expense.  Pretty easy to be competitive.  And from a Chinese person's standpoint where these "knock offs" made, if a US company's pacemaker is $15,000 and the Chinese version is $1,000 which one are you probably going to choose?  Especially seeings they were built in a factory across the street.  I don't want to spook anyone but the shop I worked at had the returns dept next door.  When someone passes away the device is ex-planted and analysis is done.  There were a couple that came back from Mexico.  They wouldn't register to the programmer so it was taken apart (my job).  After opening them up they were knock offs.  They were functional, looked the same, etc.  No one knows exactly where it came from but if there's a few you can bet your butt there were more!  So the Chinese were selling black market knock off pacemaker's to Mexican hospitals.  Now I have seen it all.

I highly doubt anything has changed.

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