Trump announces a 90-day pause on most of his so-called “reciprocal tariffs,” but will raise the levies on China to 125 per cent.
The funniest thing about this is, if you're a US manufacturer with a lot of inputs from China and you're selling to a global market, the smartest thing to do now is very likely going to be moving your manufacturing outside of the US.
Does that prevent any tariff hits?
Asking as someone not sure what happens to the American/Texas international mega corp that owns the manufacturing plant I work at in Alberta.
Exporting TO the USA will still suck, as I understand. Even if they're an American company? Idk. The corpo bots say so anyways. China economy is/was stagnant, so there isn't actually any room to expand market there is what I was told.
idk I'm expecting layoffs, plant closure, or the plant goes Canadian owned. They tried being privately owned a couple decades in the past but, it was difficult for them to network sales.
It's a risk I knew existed, manufacturing is so fragile.
Canadian, Chinese, and Mexican countries are still being tariffed by the USA at full announced rates currently.
That might change next time they're lined up for another options run on the market.
The 3 largest US trading partners are tariffed higher than everyone else. AFAIU, only energy being taxed is Canadian.
Trump, has also consistently begged for a deal with China, and the very obvious bilateral reduction of 84%, in next few days, would also put Chinese tariffs below Canada.
I still hope world unites to destroy/pressure/boycott US, instead of thanking them for their tariff levels.
Honestly, it's only a few countries that can do much to fight things. Canada due to how critical our outputs are for them is one, though we're going to suffer a ton for the ordeal (still worth it IMO), Mexico as well for the same reasons, but the EU and China are basically it for being able to make any notable impact.
In fact, this is actually the best time for China to stand up to the US, because of their imploding economy and population (some estimates put it as low as 400million), they won't have the international power to do much in a decade, like how little influence Russia has now. Not to mention that the EU's been declining for a while now, though they feel like they might be in a resurgence since Russia kicked them in the asses before Trump started backing a dump truck of salt their way.
If this happened just a few years later, the US's relative position in the world would've been twice as strong, so we're lucky it's happening now since the rest of the world has the power to resist effectively. But thanks to Trump, all nations that have strong trade relations with the US will have no choice but to diversify in the fear of Trump doing this sort of stuff for the next four years (or more if he amends the constitution for a third term like what Putin did).
You can only feel for the little guys like the Philippines that gets their entire industries rocked by the US tidal wave when they're so poor that all they can do is beg and hope the US realizes that they're too poor to give Trump anything at all.
because of their imploding economy and population (some estimates put it as low as 400million)
You have to stop believing absurdities. Their economy is strong and manufacturing center, but 400M would give them 2x the number of cars per capita than US, as well as double GDP/capita and 5x PPP GDP per capita. Russia is a military peer to US, and has passed Germany and Japan to be 4th in PPP GDP.
If this happened just a few years later, the US’s relative position in the world would’ve been twice as strong, so we’re lucky it’s happening now since the rest of the world has the power to resist effectively.
US has been on a decline path. Accounting tricks (mainly owner's equivalent rent) is 15% of GDP, and healthcare 5% of GDP higher than any other country. Manufacturing decline too. Overconfidence in its own (yours?) disinformation and strength explains their current behaviour. It is certain that they would have/will be relatively weaker in 4 years.
While I agree that 400mil is really pushing it, the arguments for it is less than unconvincing. The issue is that most pre-COVID estimates (from Japanese, to Russian, even several inner Chinese ones) hover around 800-900mil. And it's a well known fact that for that the entire time they did the Zero COVID stuff, the crematories were running at eight times normal, burning 24/7 spewing black smoke from their chimnies the entire time with countless witness reports, the numbers actually add up that their population halved in those short years. It's hard to discount math, but...frankly as someone who trusts numbers to tell things as they are, even I find it difficult to believe.
But the economic numbers? They're shit. Anything that says otherwise is 99% government propaganda. You can tell from all the pictures of defunct economic activities being actively scrubbed from the internet that there's truth to it. Hong Kong is practically a ghost town nowadays. A decade ago, people were practically shoulder to shoulder on every major street during the day, but now, a few natives walking down the biggest streets without a single foreign-born in sight. No cars, no open businesses. Nothing.
There is no evidence to support that the Chinese economy is doing well on any measure. Many of the biggest Chinese companies have either left, or went bankrupt. Tencent and a few other tech giants are basically the only ones left, and that's because they make most of their money from foreign customers. Big businesses that rely exclusively on local customers are gone or have downsized massively. Tell me, what happened to Evergrand, one of the three biggest companies in China, and one of the top 20 in the world?
And I don't see why you are so argumentative on US's current weaknesses. I agreed there, and yet you can't help but attack me on that point despite completely agreeing on it? Seriously? Pick your battles and bring some data to back it up if you think I'm wrong.
Evergrand, one of the three biggest companies in China, and one of the top 20 in the world?
Property development company that had financial difficulty. None of its equipment or expertise were destroyed. China moved to expand factories and manufacturing in response to housing downturn.
No amount of equipment or expertize matters when there's no money to do work. Evergrand was billions in the hole and many of its employees hadn't been paid in months before going bankrupt. Not only that, but there are hundreds, if not thousands of condos that are unfinished due to the bankruptcy, and that means that tens or hundreds of thousands of people who are more than a million in the hole with nothing to show for it. Their entire life savings, along with their retirement plan is gone, along with thousands instantly out of work.
This is the sort of things that major recessions are built from, and has repeatedly in the west. Unless if you can pinpoint a specific reason why China is immune to such disruptions, it is only willful blindness that can explain China as not being in a recession because of it.
And as for the factories, they're not being built, they're being abandoned. For example, Foxconn city (forget its actual name) shut down and moved to India. A city of close to a million people disappeared and was abandoned because the only employer moved out of the country.
You're the one blindly following propaganda if you're ignoring such obvious signs of an economic downturn, because "the government said things were good", like how Trump's been saying that the "tariffs will make everything better".
It prevents tariffs on inputs, which lowers costs of goods sold for products sold outside the US. Goods sold into the US would still be tariffed, but if the inputs are largely from China, it would still likely be cheaper to manufacture outside the US, not pay the 125% tariffs on inputs, and deal with the lower tariff rate into the States.
I mean, if your costs on inputs are going to go up from 125% tariffs by being in the US, but you can manufacture somewhere that the US is only charging 10% tariffs, it's a strong incentive to move manufacturing to that low-tariff destination and only face a 10% tariff on what your selling.
What works for any specific company would come down to their own mix of inputs, target markets, and other factors.