S&S Hurt By US-China Trade War

[GrandpaD]

China jacked up tariff on ride parts from 10 to 25% in retaliation to US moves.

Utah Amusement Ride Manufacturer Feeling Squeezed By Both Sides As U.S.-China Trade War Speeds Up

The U.S.-China trade war is making for one long bumpy ride at S&S Worldwide.Executives at North Logan’s S&S, one of the largest amusement park ride…

www.kuer.org

 

[Zimmy]

These tarriffs sound good and make for great political spin but are in fact, (in my opinion) a terrible idea. They hurt us because we are not a manufacturing economy. If you raise tariffs on goods coming into the country those costs get pushed down by the supplier to the American importer, who then will typically pushes down, at least in part, the cost to the consumer. Since what we export to China is typically farm and food stuffs not electronics it is hard to push their tariffs onto them (as they do to us). They buy the crops based on bid prices. If we add the cost of the tarriffs to our bid it is possible that Australia might under bid us.

There is a reason free trade zones are so useful.

 

[warfelg]

I don't want to get super political, but never has a tariff war come out well for the president that started it. Because the problem is 99% of people just hear the president say the pretty part: We're going to tax China's imports 25%. The problem is a lot of people stop there.

So the cycle goes:
US - "We're going to tax Chinese goods 25% because it's cheap and we want people to buy American."
Chinese companies - "Ok, we're just going to charge the importer 25% more."
Importer - "Ok, we're just going to charge the company using these things 25% more."
US Distributer - "Ok, we're just going to charge the consumer 25% more."
US Consumer - "Why is my widget $125 when it used to be $100?"

I have my own opinion on what would be a better solution to trade issues but this isn't the time or place for that.

 

[bill s]

^^-- Media: "it's going to cost you 70% more"

 

[warfelg]

^^-- Media: "it's going to cost you 70% more"

It certainly could depending on what it goes through. Part of the reason products from China is so inexpensive is because of the lower cost of labor. Some AUW (auto workers) union members start at $120 per hour. Want to know why Ford and Chevy are closing up car production? Margins for profits are tiny on them and the cost of paying the labor to fix them is too high. Counter that with Chinese employees making about $25 per hour. So not only is the Steel more expensive to import, but the company gets tax breaks to move the production to the US, which compounds the added cost.

There's a reason Europe and the Asia markets are still going to get cars made by GM and Ford and we won't.

 

[The Hessian]

Trump is latest in a long line of presidents to discover that tarrifs are never a good idea.