Chinese Tarrifs

[Larry Bartlett]

Just a heads up on Trump's decision on Chinese tariffs: I just got word that our inbound shipment and all future orders have a 25% tax to enter the US.

So the heads up is to consider your boat purchases sooner than later this summer. Example: 25% of a $1600 raft cost = >$200 increase to customer. When we are forced to increase prices before June, I'd feel better that you had a chance to buy our current inventory at listed sale prices.

https://pristineventures.com/products/rafts-canoes-2

lb

 

[ramont]

If I had the cash to buy a $1600 raft then I really don't think another $200 would be a deal breaker - of course I wouldn't know since I've never had enough disposable income to pay for guided hunts or big toys. Then again, maybe I'd just buy a product made in America and not worry about the tariff - hmmm, maybe that's what a tariff is all about.

 

[archp625]

Just a heads up on Trump's decision on Chinese tariffs: I just got word that our inbound shipment and all future orders have a 25% tax to enter the US.

So the heads up is to consider your boat purchases sooner than later this summer. Example: 25% of a $1600 raft cost = >$200 increase to customer. When we are forced to increase prices before June, I'd feel better that you had a chance to buy our current inventory at listed sale prices.

https://pristineventures.com/products/rafts-canoes-2

lb

Larry,

I have a question for you. I work in a field that has been hit very little by the tariffs. How much would it cost to produce the raft in the United States. From my understanding, and I may be wrong, but i think some of this is to bring jobs back to the US.

I think I already have the answer but wanted to ask someone directly. My guess is you cannot produce the raft in the US and beat the price per item plus the increase in tariffs.

 

[Larry Bartlett]

Yup, i get the tariffs and they need to be imposed to balance the US economy and protect intellectual property values.

A reference to the all might dollar and US made goods:

A $1600 raft costs about $800 to produce in China with US accessories (slings, paddles, etc). I once had the same raft made in Canada and it cost me $1580 to produce, sold at around $2200 to customers. Two things you'll notice from that lesson:

1. profit went up substantially going to china
2. production cost went way down leaving Canada

The same raft made in the US would cost the slightly more than canada produced it. We'd still have to buy fabric from overseas because the US doesn't make it. So, even with US made rafts, you're buying foreign fabrics to do it.

Think what you want about china and beyond, but in the end guys spend as little as possible and the market showed me that I could sell 100 units at a lower price or 30 units at a higher price...which means >2/3 of consumers prefer chinese products if quality matches price.

lb

 

[Terrancethelonghorn]

The biggest problem with China IMO is intellectual property protections, and that is something that we should be willing to proceed with the tariff battle for. Before you know it, your exact rafts could be popping up on the market at lower prices and under different names coming direct from China.


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[UtahJimmy]

How much would it cost to produce the [insert almost ANY product] in the United States. From my understanding, and I may be wrong, but i think some of this is to bring jobs back to the US.

I think I already have the answer but wanted to ask someone directly. My guess is you cannot produce the [insert almost ANY product] in the US and beat the price per item plus the increase in tariffs.

Raw goods in the US cost about 4x more than in China. Add to that the servere reduction in labor/overhead and you can't touch the profits you make from going overseas vs stateside production, even with the massive jump in tariffs.

Most consumer conscience companies tried not to pass the 10% increase on to the consumer if they were protecting their brand. 25% will not be so friendly to us, the end user.

Wise companies have already had plans in place to move manufacturing to other neighboring countries; Vietnam, Philippines, Malaysia, etc.. but this is costly and takes time to establish.

In no way are these manufacturing jobs coming back to the US due to these tariffs, this is a lie we are being fed and most people buy into it. We are hurting China though, which I believe is a good thing long term!

Sent from my SM-G950U using Tapatalk

 

[snowmobilefun]

I think the tariff can help us down the road, we have been taken advantage of and it is about time someone protected American interest.

 

[Beendare]

All I know is we need to be prepared for a long drawn out fight....plan accordingly. I agree fair markets and intellectual property rights needed to be addressed with China but Trumps big mouth and his poor negotiating skills are hurting us.

His NY Real Estate playbook bullying aren't going to work with the Chinese. Maybe you shouldn't have run Tillerson off after all, eh Donald?

The Chinese think long term....read; Generationally...not what the bottom line will be this quarter. Buy your boat...hedge your portfolio, pray for the farmers....this is going to get worse.

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[brsnow]

The USA stole intellectual property to fuel growth, textile industry is the most well known example. All emerging market countries do this.

 

[bozeman]

Get in bed with communists and pay the price.........the avg American consumer is about to get what’s been coming to them.....

 

[Steve O]

Thanks for the heads up Larry.

 

[SWOHTR]

I have a hard time doing business with a company that does business with China so they can make the same product for cheaper but sell at about the same price. It screams greedy ignorance to me. Knowing what China is doing (military posturing, monitoring its citizens, etc) I can’t see how ANYONE would support that country. They don’t like us - why are we doing business with them? They foresee conflict with us in the future, and it’s not all because of our president. They are actively seeking it. Look up island building, 9-dash line, national map of shame, Spratley and Paracel islands.

Can you make your product anywhere else?

 

[TheCougar]

I have a hard time doing business with a company that does business with China so they can make the same product for cheaper but sell at about the same price. It screams greedy ignorance to me. Knowing what China is doing (military posturing, monitoring its citizens, etc) I can’t see how ANYONE would support that country. They don’t like us - why are we doing business with them? They foresee conflict with us in the future, and it’s not all because of our president. They are actively seeking it. Look up island building, 9-dash line, national map of shame, Spratley and Paracel islands.

Can you make your product anywhere else?

I get where you are coming from, but in reality there is probably no business you buy from that doesn’t “do business with China”. Whether it is raw materials, manufacturing, or simply the equipment being used, you can’t escape it. There is a 100% chance that the electronic device you are using right now was made almost completely in China with foreign materials. BTW, I don’t think Larry was doing what you seemingly implied - making a product for cheaper and charging the same price. The prices he quoted showed a $600-800 margin based on Canadian/Chinese manufacture. It’s hard to blame anyone when the sales figures prove that people will buy the China made raft at a rate of 2:1 when given the choice. Keep in mind, for his product, the materials and build quality are the same. The only difference is who is putting the raft together. I try to “buy American” when I can, particularly on items I intend to use for a long time or when the Made in the USA tag means improved quality. I find I do this more as I grow older, in part because these USA made items were too expensive when I was younger and I wasn’t so conscious of it back then. But truth be told, based on what Larry said, I would probably choose the Chinese made raft over the USA made raft because the extra $600 doesn’t buy a higher build quality, better materials, or improved performance. Maybe that makes me part of the problem...

 

[Shrek]

Larry , do you have plans to have the rafts made elsewhere ? I know that the Chinese have made it relatively easy to connect with manufacturers but I’m sure you can develop new suppliers with some work.

 

[Wrench]

Every business that's successful runs at the highest profit margin the market can sustain. The typical consumer is a cheap bastard that won't open his wallet father for a product than he has to, hell...he'llask his buddy the business owner to cut him a deal on a product or service knowing that is how his buddy keeps the lights on.

With that said, 20 years ago when we bought a Chinese product, it came with a cheap gold "made in china" sticker. We didn't need to see the sticker because frankly, the product was junk and visibly junk.

Times have changed. We've sold our work, materials and skills to them and they now proudly emboss their country of origin in most products.

We've got a very expensive lesson to learn, and hopefully it's just economic and not violent. We cannot afford to be a country of raw materials and send those materials along with some tools and instructions on how to make our products so we can remain a world leader.

It's going to be uncomfortable for a long while and we'll not go right back to dominating the market just because we build our own products again. Honestly with the way America is becoming pussified, we'll be lucky to recover.

Rant over.

Thanks Larry. I understand the reasons for importing. I am one of few who would pay a premium for domestic products if I were in the market....but also understand that some times its just not an option.

 

[Shrek]

Btw , there will be no deal with China. The Chinese economy would collapse if they signed onto the deal we’re demanding. They’re going to collapse anyway but if they sign a deal the Chinese would own the collapse whereas if they don’t sign they can blame the USA and rally the people around nationalistic pride. We don’t want a deal we want to drive our supply chain out of China and into other countries. In particular countries around China that are natural enemies and rivals. Vietnam , India , and Indonesia in particular. Manufacturing and trade with the USA will build up those countries ability to build up their militaries and bind them to the USA. A two edged sword stabbing Chinese imperialism in the heart. Crippling China’s economy while enriching Chinese enemies.

 

[Molon Labe]

I'm not really up to date on the tariffs etc. I've been running a boycott on "news" for quite a while now.

But I do remember some economics studies. And from everything I've ever read or researched tariffs do nothing for the countries' citizens that place the tariffs. The only one that benefits is the government itself (barely). They receive extra revenue and come out as a good guy for instituting protectionist policies under the guise of "protecting" the economy.

They will rant and rave about the increase in aggregate output that will naturally occur from protectionist policies such as tariffs...but...that has never EVER happened. My goodness humans are good at repeating historical mistakes. Everytime we put some sort of protectionist policy in place we lose GDP...its math...and a fact. Cant work out any other way.

I am starting to think that once you are elected to a public office they give you a copy of Treatise on Money or a Keynesian economics brain washing and send you out the door to ruin stuff.

Trade wars are silly pointless and do absolutely zero for growing the economy...or improving the citizens general welfare and standard of living.

 

[Shrek]

An article with a different view of Tariffs and history than is taught in our globalist schools and Universities.

As his limo carried him to work at the White House Monday, Larry Kudlow could not have been pleased with the headline in The Washington Post: “Kudlow Contradicts Trump on Tariffs.”
The story began: “National Economic Council Director Lawrence Kudlow acknowledged Sunday that American consumers end up paying for the administration’s tariffs on Chinese imports, contradicting President Trump’s repeated inaccurate claim that the Chinese foot the bill.”
A free trade evangelical, Kudlow had conceded on Fox News that consumers pay the tariffs on products made abroad that they purchase here in the U.S. Yet that is by no means the whole story.
A tariff may be described as a sales or consumption tax the consumer pays, but tariffs are also a discretionary and an optional tax.
If you choose not to purchase Chinese goods and instead buy comparable goods made in other nations or the USA, then you do not pay the tariff.
China loses the sale. This is why Beijing, which runs $350 billion to $400 billion in annual trade surpluses at our expense is howling loudest. Should Donald Trump impose that 25% tariff on all $500 billion in Chinese exports to the USA, it would cripple China’s economy. Factories seeking assured access to the U.S. market would flee in panic from the Middle Kingdom.
Tariffs were the taxes that made America great. They were the taxes relied upon by the first and greatest of our early statesmen, before the coming of the globalists Woodrow Wilson and FDR.
Tariffs, to protect manufacturers and jobs, were the Republican Party’s path to power and prosperity in the 19th and 20th centuries, before the rise of the Rockefeller Eastern liberal establishment and its embrace of the British-bred heresy of unfettered free trade.
The Tariff Act of 1789 was enacted with the declared purpose, “the encouragement and protection of manufactures.” It was the second act passed by the first Congress led by Speaker James Madison. It was crafted by Alexander Hamilton and signed by President Washington.
After the War of 1812, President Madison, backed by Henry Clay and John Calhoun and ex-Presidents Jefferson and Adams, enacted the Tariff of 1816 to price British textiles out of competition, so Americans would build the new factories and capture the booming U.S. market. It worked.
Tariffs financed Mr. Lincoln’s War. The Tariff of 1890 bears the name of Ohio Congressman and future President William McKinley, who said that a foreign manufacturer “has no right or claim to equality with our own. … He pays no taxes. He performs no civil duties.”
That is economic patriotism, putting America and Americans first.
The Fordney-McCumber Tariff gave Presidents Warren Harding and Calvin Coolidge the revenue to offset the slashing of Wilson’s income taxes, igniting that most dynamic of decades — the Roaring ’20s.
That the Smoot-Hawley Tariff caused the Depression of the 1930s is a New Deal myth in which America’s schoolchildren have been indoctrinated for decades.
The Depression began with the crash of the stock market in 1929, nine months before Smoot-Hawley became law. The real villain: The Federal Reserve, which failed to replenish that third of the money supply that had been wiped out by thousands of bank failures.
Milton Friedman taught us that.
A tariff is a tax, but its purpose is not just to raise revenue but to make a nation economically independent of others, and to bring its citizens to rely upon each other rather than foreign entities.
The principle involved in a tariff is the same as that used by U.S. colleges and universities that charge foreign students higher tuition than their American counterparts.
What patriot would consign the economic independence of his country to the “invisible hand” of Adam Smith in a system crafted by intellectuals whose allegiance is to an ideology, not a people?
What great nation did free traders ever build?
Free trade is the policy of fading and failing powers, past their prime. In the half-century following passage of the Corn Laws, the British showed the folly of free trade.
They began the second half of the 19th century with an economy twice that of the USA and ended it with an economy half of ours, and equaled by a Germany, which had, under Bismarck, adopted what was known as the American System.
Of the nations that have risen to economic preeminence in recent centuries — the British before 1850, the United States between 1789 and 1914, post-war Japan, China in recent decades — how many did so through free trade? None. All practiced economic nationalism.
The problem for President Trump?

Once a nation is hooked on the cheap goods that are the narcotic free trade provides, it is rarely able to break free. The loss of its economic independence is followed by the loss of its political independence, the loss of its greatness and, ultimately, the loss of its national identity.
Brexit was the strangled cry of a British people that had lost its independence and desperately wanted it back.

 

[SoDaky]

Yes!
Thank you.

 

[Beendare]

The USA stole intellectual property to fuel growth, textile industry is the most well known example. All emerging market countries do this.

Whose side you on bro?

Do you have any idea as to the value of some of this proprietary technology? A company like Boeing will spend hundreds of billions developing something that the Chinese just steal....makes a bank robbery look insignificant.

Even the EU is putting restrictions on the Chinese...their theft of intellectual property is off the chart.

Tariffs are mainly in place to protect the US labor force. My client Seagate moved their manufacturing operations overseas many years ago. The CFO told me his cost of labor here [20 years ago] was $18/ hr....in China its $.18 CENTS an hour- big difference eh?

Other reasons for Tariffs of course- to protect critical industries, resources, etc. Its more complex than some make it sound. Make no mistake...other countries want what we have...and they are willing to go to great lengths to get it.

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