Administrator
Ladies and Gentlemen,
I see this topic as an economic discussion as long as you keep politics out of your posts it will remain active.
I don't expect our Moderators to have to edit posts every day in order to maintain this thread so please keep your comments on the economics of this issue and leave the politicians to do what they will.
Moderator
If we have to choose between boring and inflammatory, I choose boring. It keeps more members. Reminding people to remain civilized is better than heavy handed editing.
Remember Martin and Simon that much of the moderators attitude and practice is a reflection of what many of your peers and fellow members express to me privately.
We get many warnings from your peers to watch certain threads and to remind people to behave before things get out of hand.
Grumble if you wish but that’s how it is.
Last edited by Prashun Patel; 06-21-2018 at 8:19 AM.
[OP]
Contributor
Thank you, Keith. I hesitated to start this thread but considered it important to members who are contemplating new purchases for their shops. It has spawned some interesting discussion and I am grateful to everyone for remaining civil. Creekers are a good group of people and you host an amazing platform for us to meet.Originally Posted by Keith Outten
Contributor
I might have to move up my bandsaw purchase
Contributor
I suppose they may change the names on some things for sale. rather then calling the fraction digital calipers special wood working ones they will just drop the wood working form the name.
Grizzly will have to do the same for their woodworking vertical mill...just call it a high speed spindle mill. Maybe call it good for metal and organic materials?
A table saw will become a non ferrous metal cutting saw, etc.
Bil lD
Contributor
Last year I met a former manager of a cabinet door factory in Oregon (who is a direct competitor to me) that currently produces 5k - 6k doors/day. Last year alone, they installed 15 robotic arms with plans to continue that trend in every possible step in the process.
JR
Member
That is creative, although changing the name of an imported product wouldn't help, not to mention the risk of being accused of false declarations.
Is second hand or demo woodworking machinery subject to the same tariff? If not, may be lightly used tablesaws etc. would have a good export market.
Simon
Member
From Shiraz's post: "Another thing to remember, is that there will be industries worse off than us in this "fight". Almost everything you see at major box stores comes from China and all that will be going up!"
That's where I think the tariff nonsense will end. While a given politician might not mind offending woodworkers, he would think twice before offending everybody that shops at WalMart and Home Depot.
Last edited by Keith Outten; 06-22-2018 at 8:33 AM.
Contributor
Hello - Don't you think it's been a civilized, interesting and relevant discussion thus far?
Interesting; not boring nor inflammatory. Give people a chance, you might be pleasantly surprised.
Of course, right after saying that, someone may show up with a flamethrower.... but, let's be optimists.
Maybe you moderators think we're a dangerous crowd, neither pretty nor proud. But I'd rather laugh with the optimists than cry with the cynics, Virginia.
No offense Prashun, just having a little fun....
Member
At what point is the duty applied - I assume it's not at the retail price - maybe at the importer's cost - so the retail price would not need to go up the full 25%
And where does all the billions in duty collected go?
Member
Tariffs are essentially a supply-side shock....they act as a tax on the end consumer of the imported product. So specifically to the OP's observation's, woodworking stuff becomes more expensive, all things being equal. In the medium term, the relative exchange rate between currencies adjust to compensate for the increased cost, reducing the actual effectiveness of the tariff on reducing demand for the foreign product. The effectiveness of the tariffs is therefore a function of the flexibility of demand relative to price (ie: how essential is the product, can you go without it), and the availability of substitutes. That's why there was a "hold on a second" moment in the media when it was pointed out that the almighty iPhone fell on the list. And yes, a majority of the consumer goods found in walmart, Target, or most national chains are manufactured in China.
The thing is this: at this stage, China needs the US more than the US needs China to accomplish it's long term goals. It is a relative insular economy, driven by consumption, so in a game of who can hold their breath longest, US wins. It will be at the expense of a subset of the population or economy, but the overall effect is more manageable for the US than for China.
Finally, I'm Canadian, so let me say this: it seem most Canadians, including our PM, are misinterpreting the "security" aspect of the steel and aluminum tarriffs...the wording doesn't say that it is because Canada is a security threat....its saying that not protecting the integrity of the US aluminum manufacturing industry is a security risk...ie: they need to be able to have an industry that is self sufficient in the event of increased demand and disrupted global supply chains during a conflict. Problem is, the administration fails to realize that even a 25% tariff won't be effective in limiting imports, because of a) the sheer amount of aluminum the us needs can be manufactured domestically, and b) the magnitude of cheap electricity available from Hydro in Quebec provides a cost advantage that is VERY difficult to overcome in justifying the expansion of US aluminum production....even before the Canadian dollar falls further to compensate for the tariff.
On a lighter note, here's my NAFTA resolution proposal.....we get Mexico to move Cinquo de Mayo back a couple of months, move it, Canada Day and Independence Day to July 2, and the entire continent take the whole week off, with trade balanced evenly among Guacamole, beer, and BBQ related products.
Member
"The U.S. International Trade Commission-Tariff Database, is an interactive data base that will enable you to get an approximate idea of the duty rate for a particular product. Please be aware that the duty rate you request is only as good as the information you provide. The actual duty rate of the item you import may not be what you think it should be as a result of your research.
CBP makes the final determination of what the correct rate of duty is, not the importer."
From the CBP website.
The tariff is just a duty and it goes to the Treasury. Some look at it as another form of tax as importers will try to pass the additional costs to the consumers. If a car is imported with a $5,000 tariff, the car dealership is not going to cut its profit margin to absorb that. Car buyers will see a price jump instead. Of course, car sales will be expected to drop as some will choose not to buy a car at all or will look for a second-hand car, and some car salesmen will lose their jobs. It is not pretty, but then no one says it will be.
Simon
Member
I, for one, believe the trade imbalance between America and China should be worked on. However, if history is an indication, we must guard ourselves against over-optimism when it comes to trade wars. China has been more than once including in recent time after the June 4 1989 crackdown imposed with harsh economic measures, and she has proven its resilience. Who can hold their breath longest is a question with an unknown answer at this point. Not only is America acting alone this time, it has also widened its battlefield to include its allies as opponents! A coalition of opponents this time, if you may.
China is a tightly controlled country and it also has a huge reserve to act as a buffer, meaning the central government can disregard any market principles and enforce reliefs as it sees fit. Here, when prices go up because of trade wars, do we have a safety net like that? I am doubtful.
If a war is really easy to win, the war probably wouldn't start at all, unless your opponent is suicidal. I have not known China as a country looking for a solution to end itself (economically of course).
Simon
Last edited by Simon MacGowen; 06-21-2018 at 12:15 PM.
Member
Steve S., excellent post.
Contributor
While the CBP may make the final ruling the importer is going to set the price of the tariff. The CBP will just issue guidelines and then investigate companies that might be under reporting. There's no way the CBP could go through the amount of stuff that this tariff is going to impact before July 6th. I wouldn't be surprised if a lawsuit is filed asking for more time to get the numbers correct. After all any company that gets it wrong is on the hook, not the consumer who bought the product. An honest mistake could bankrupt a company if their profit margins don't cover the cost of the tariff.
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