All of this will cause the cost of used machinery to go up as well.Originally Posted by John TenEyck
Contributor
All of this will cause the cost of used machinery to go up as well.
Contributor
Mark, it seems to me some of the unintended consequences will be inflation (and all the really bad things that entails), breakdown of working systems, frustration with those in charge and world-wide degradation of economic and political good will and trust.
Contributor
Post WW2 it was often mentioned in the news that USA was paying more than its share of many multi country deals.
There was more pride than complaints in those articles. I think a realistic assessment of who needs help and how much we
can contribute needs to be an ongoing practice. Look at NATO.
Member
Hmm.... Wonder how this will affect Hammer/Felder products. Only tool I really have left to complete my shop is the Hammer A3-31 Jointer/Planer combo.
If at first you don't succeed, redefine success!
Member
And that means interest rate hikes down the road.
Boom, bust, boom, bust is still the rule.
If you don't have a car to buy (car prices will shoot if the auto tariffs are a go-ahead), a mortgage to pay down, or heavy machinery (mostly imported these days) to invest in, you are the least impacted.
But depending on how and where Euro, Canada, Mexico and China hit back, some sectors will be hit hard. Farming will be a disastrous area for sure.
China will probably limit its citizens to travel to the US, and divert them to other countries to spend their money. A tactic they used to penalize South Korea and Japan when they quarreled. So tourism can be another casualty.
As all these wars are going on, Russia, unaffected by the wars, will push to reduce oil production to counter any negative effect on oil prices because of trade wars.
Recessions will happen depending on how long the wars drag on. The stock market? I am holding on my annual contributions until all this becomes clear -- my financial advisor has been calling me since Feb.
One problem for CEOs is what/when to invest. If steel tariffs are enforced now and removed later, how could an investment in a steel plant be justified? The plant would not be able to compete with imported steel once the tariff is lifted. Same for autos.
The low unemployment rate means shortage of skilled staff and cheap labor from Mexico might not be a reliable source of supply given the immigration crack-down. In the end, consumers and workers may have little to benefit from.
Simon
Last edited by Simon MacGowen; 06-20-2018 at 12:18 PM.
Contributor
Has anyone mentioned the actual price differential here? I'm hearing the price of a Chinese car will go up 400-500, so what will be the actual impact of a $1500 machine? On average, the US tariffs on imports are less than 60% of what are charged on US goods by others. Periodically the threat of a trade war has been used to leverage an adjustment to tariffs by many Presidents. It is way too early to speculate on the ultimate consequences of a resetting of the tariff issue. The long term goal is also how to slow the trade deficit which eventually leads to problems more serious than what we pay for certain items that may or may not be necessary to our quality of life. These things tend to settle down with time. Even with children, you need to draw a line and reset the rules once in a while. Kids get unhappy but some agreement occurs. Dave
Member
The tariffs among the western world/economy are similar: https://www.investopedia.com/ask/ans...st-tariffs.asp
It is the cumulative effects of the tariffs across different sectors that matter.
China and Japan (both targets of the tariffs in addition to Euro, etc.) are the biggest buyers of the US Treasury Bonds. They do have another economic weapon in their pockets.
Simon
Member
The tariffs are supposedly going to be 25%, so that's about $375 on that $1500 machine. I just imported a $4K machine from China, so I am happy I snuck in before these come in effect-- but had that tariff made it a $5K machine, I likely still would have bought it (maybe just saved up for another month or three), I just couldn't find a US or Euro alternative for even double the price.
Licensed Professional Engineer,
Unlicensed Semi Professional Tinkerer
Member
Maybe it's the cynic in me, but I imagine they'll see this as an opportunity to raise prices whether or not the tariffs affect them. Need to stay x% above the Asian machinery to maintain their brand value.
Contributor
It will also be interesting to see if the tariffs for Chinese machines sourced to Europe for final finishing and distribution are handled. There is more of that than we realize. Agreed there will be inflation if these tariffs hold. There is a realization by both parties that as the deficit grows, inflation is a necessary evil to delay the eventual impact of that debt on our credit rating. Tough set of choices. Balancing economic growth with inflation to reduce total debt as a % of our economy. As with many issues, I see more discussion of the immediate impacts than the long term effects. Dave
Contributor
Good, I'm all for a level playing field.
Mac
Member
That tends to be what happens. If the competition becomes more expensive due to tariffs then companies can raise prices more easily on their own products. I mean, why not make more money if the government is going to place extra taxes on your competitors?
And of course, there's still the very real possibility of increasing trade tensions with the EU which might result in tariffs being placed on European machinery as well. The EU just announced 25% tariffs on some US goods, so I wouldn't be the least bit surprised if the US escalated things in response as happened with China.
Contributor
My local dealer has (11) new, 2018, (4) door, 4WD, Tacomas on the lot. Every one is built in Mexico.
Mac
Last edited by Mac McQuinn; 06-20-2018 at 1:17 PM.
Contributor
I’m not so much a cynic, rather I simply feel this will occur because of the demand created by raising prices in the less expensive competition. Most of the euro manufacturers will offer discounts to the purchaser, if demand spikes I suspect the first action we would see is a reduction in deals and discounts. If they don’t need to incentivize the purchaser than they will not do so.
I think it's very difficult to effect trend with tariff because the other players in the field will respond to increased demand, most will not likely increase supply but instead increase pricing. The tariffed nation may increase supply unless there is some limit to that or find a way around the tariff.
Last edited by Brian Holcombe; 06-20-2018 at 1:44 PM.
Bumbling forward into the unknown.
Member
The 4 door Tacomas are built in MX. All other configurations of the Tacoma and 100% of Tundras are built in San Antonio as John mentions. I've owned 3 MX built Tacomas and had zero problems with them in case you're wondering. I'm on my 2nd Tundra now and love them too. It will be interesting to see what kind of strategies different companies come up with to work around the tariffs (chicken tax v2?).
Posting Permissions
