ihocky2

Tariffs in action

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I was requested into a project management meeting this morning for a new part my company will be making. We were awarded a 300,000 piece contract for replacement water pumps for a major US automaker, these are after market replacements that are sold at a national chain. The distributor of this part had been sourcing them from China, because of the tariffs the distributor was forced to look at other sources for these parts. Until the tariffs were in place the best cost came from China, now it is back to Made in America.

 

To make these parts we already know we need to higher 3 assemblers and at least 1 machine operator. Though it's only 4 jobs, in our small company this is a 4-5% employment increase, and for the people that fill them it is being gainfully employed. We also need to purchase two vertical mills that come from Haas, a US machine manufacturer, increasing their business. A US foundry will now provide 300,000 castings that used to come from China. All of these companies will pay taxes.

 

Even though China is not paying the 25% increase on their goods and the price is being passed to customers, this is how the tariffs are impacting China. Cheap goods or products that are only made in China are going to stay there and we'll pay the 25%. But products that used to be made in the US or new products will now be evaluated and pulled from China. Some will come back to the US, some will go to Japan, Thailand, or other low income countries, but will be pulled from China. The loss of production is what is going to impact China. Just this one contract leaving China is positively impacting at least 3 companies in the US.

 

So the question for discussion, has anyone else seen a direct impact of the tariffs benefiting the US or hurting China's economy?

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The problem with goods made in the u s is how the goods are made once the bean counters start finding that instead of a 50k$ bonus we are only getting a 20k$ bonus that's when we cheapen the product or service so we can make our numbers for our I'll gotten bonuses blame it on labor and give the customer a dog dirt product .And you don't even need a college education to figure that out. Hopefully I didn't offend someone.I no I no

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While I'm out of the business now...family business was metal finishing.  Specifically deburring and surface prep on a mass finishing basis.

 

We saw a lot of items go overseas.  Even though the customer knew they were getting inferior product, the general consensus seemed to be that if a container came in and was not up to spec, the overall savings justified the scrapping of that container.

 

I'm willing to bet money that the math on those decisions, while maybe not in all or even the majority of the cases, has changed significantly.

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1 hour ago, ihocky2 said:

I was requested into a project management meeting this morning for a new part my company will be making. We were awarded a 300,000 piece contract for replacement water pumps for a major US automaker, these are after market replacements that are sold at a national chain. The distributor of this part had been sourcing them from China, because of the tariffs the distributor was forced to look at other sources for these parts. Until the tariffs were in place the best cost came from China, now it is back to Made in America.

 

To make these parts we already know we need to higher 3 assemblers and at least 1 machine operator. Though it's only 4 jobs, in our small company this is a 4-5% employment increase, and for the people that fill them it is being gainfully employed. We also need to purchase two vertical mills that come from Haas, a US machine manufacturer, increasing their business. A US foundry will now provide 300,000 castings that used to come from China. All of these companies will pay taxes.

 

Even though China is not paying the 25% increase on their goods and the price is being passed to customers, this is how the tariffs are impacting China. Cheap goods or products that are only made in China are going to stay there and we'll pay the 25%. But products that used to be made in the US or new products will now be evaluated and pulled from China. Some will come back to the US, some will go to Japan, Thailand, or other low income countries, but will be pulled from China. The loss of production is what is going to impact China. Just this one contract leaving China is positively impacting at least 3 companies in the US.

 

So the question for discussion, has anyone else seen a direct impact of the tariffs benefiting the US or hurting China's economy?

 

My girlfriend's in the garment business and they moved quickly to relocate production out of China.  They were already in a number of other contries, so it all went other places overseas with none coming home.  It did hurt China though. 

 

A lot of your personal experience obviously sounds good.  My only question is can something like this hold?  Eventually tarriffs go away.  That, or companies faced with competition ultimately have to find less expensive sources.  I don't know the specifics, but if auto mfgs. can get that part for less from Korea, India, Indonesia, Pakistan, won't that sourcing eventually find it's way back to lowest cost provider?   Ultimately that's the pain of Capitalism.  Nobody offshores because they hate America.  It's all about cost and margins.  

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56 mins ago, Surf bomber said:

The problem with goods made in the u s is how the goods are made once the bean counters start finding that instead of a 50k$ bonus we are only getting a 20k$ bonus that's when we cheapen the product or service so we can make our numbers for our I'll gotten bonuses blame it on labor and give the customer a dog dirt product .And you don't even need a college education to figure that out. Hopefully I didn't offend someone.I no I no

You're not working with a full deck if you don't think the same thing happens in China.

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50 mins ago, saltfisherman said:

Ask a farmer how those tariffs are working out for them. Bet you’d get a different response quick. 

What would the farmer’s response be?

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1 hour ago, ihocky2 said:

I was requested into a project management meeting this morning for a new part my company will be making. We were awarded a 300,000 piece contract for replacement water pumps for a major US automaker, these are after market replacements that are sold at a national chain. The distributor of this part had been sourcing them from China, because of the tariffs the distributor was forced to look at other sources for these parts. Until the tariffs were in place the best cost came from China, now it is back to Made in America.

 

To make these parts we already know we need to higher 3 assemblers and at least 1 machine operator. Though it's only 4 jobs, in our small company this is a 4-5% employment increase, and for the people that fill them it is being gainfully employed. We also need to purchase two vertical mills that come from Haas, a US machine manufacturer, increasing their business. A US foundry will now provide 300,000 castings that used to come from China. All of these companies will pay taxes.

 

Even though China is not paying the 25% increase on their goods and the price is being passed to customers, this is how the tariffs are impacting China. Cheap goods or products that are only made in China are going to stay there and we'll pay the 25%. But products that used to be made in the US or new products will now be evaluated and pulled from China. Some will come back to the US, some will go to Japan, Thailand, or other low income countries, but will be pulled from China. The loss of production is what is going to impact China. Just this one contract leaving China is positively impacting at least 3 companies in the US.

 

So the question for discussion, has anyone else seen a direct impact of the tariffs benefiting the US or hurting China's economy?

Thanks for sharing:)

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@makorider you are 100% correct with the price vs quality. We are medium sized machine shop with some nice products for large truck manufacturers. We get castings from the US, but China as well. From China we get a lot more scrap, but the cost savings is worth it. Or at least the bean counters see it that way. They don’t notice production delays or late deliveries due to parts being rejected after losing time machining them.
 

We were not sure how the tariffs would hit us, but it hasn’t been to bad. Losing money on a few jobs but we are starting to source those either from other countries or back into the US. I’m told we have landed a few jobs that we would not have without the tariffs. This is just the first one I have first hand knowledge of and is large enough to purchase new machines for.

 

Tariffs don’t have to last forever. Once China sees that they can no longer under cut the US without repercussions, or imposing tariffs on our products, they have to start pricing fairly. The tariffs were not about shutting own China, they are too big for that. They were to even the playing field between the US and cheap Chinese labor, and to even the field with the tariffs they already imposed against us. 


I am not worried about what the farmers think of the tariffs, and my in-laws run a small farm. Farmers are impacted worse by our government fixing prices and by large corporate farms. Farming is not a free market trade, not even in the US. China cannot produce enough food for their over-population. Not many countries can supply China with as much food as the US does. Their communist government doesn’t care about starving people though, that is just another form of population control to them. 

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3 hours ago, Mummichog said:

What would the farmer’s response be?

 

"things are terrible, the weather is warmer, rainfall increased, subsidy checks were 2 minutes late, and I am stuck driving a 2019 Pickup instead of 2020.  "

 

 

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8 mins ago, ihocky2 said:

or imposing tariffs on our products, they have to start pricing fairly. The tariffs were not about shutting own China, they are too big for that. They were to even the playing field between the US and cheap Chinese labor, and to even the field with the tariffs they already imposed against us. 

 

^ this

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9 hours ago, Mummichog said:

What would the farmer’s response be?

Ask them if they want to receive gov handouts or sell their products? 

 

They don’t care if a company employs a few when they can’t feed their family themselves. 

 

It’s obvious the trade war is affecting them, if not Trump wouldn’t give them handouts. 

 

Whats the break even point of farmers out of business to those hired in nonfarm jobs. 

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9 hours ago, Mummichog said:

What would the farmer’s response be?

Everyone sees how Trump is ruining everything.

 

We gave some Chinese feller your job and it ain’t coming back boy. That is what the Democrat leaders tell us. Now that some jobs are coming back, it is time to condemn that. Tell everyone how dumb Trump is again.

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