5 ms·

China to raise reciprocal tariffs on U.S. goods to 84%

28 points by Philpax 2y ago

testing22321 2y ago
So everything made in China coming into the US is more expensive for the consumer, and anything made in the US and exported to China is more expensive, meaning less of it will be bought. Double gut punch for Americans. Hold onto your hats, it’s about to get capital letters BAD.
- ericmay 2y ago
  It’s also a double gut punch for China, and its manufacturing subsidiaries in other countries. China is extremely reliant on manufacturing exports. Their options such as finding new markets for these products is limited, because other countries want to maintain their industries too. For example: “BRUSSELS — The European Union on Tuesday reached out to Beijing for help in tracking a wave of Chinese imports that is expected to pour toward the EU after U.S. Donald Trump ramped up tariffs on China. … Should the diplomatic initiative with China fail, the EU would probably have to introduce “safeguard measures,” which are special duties intended block to sudden diverted trade flows.” [1] Funny how it’s “safeguard measures” when the EU does it. Why would they need safeguard measures? They don’t want extremely cheap products? Anyway. It’s kind of a judo move - using China’s excess manufacturing capacity against itself. The US can find other countries to manufacture goods over time and also manufacture them here. Prices will go up but it’s not the end of the world. Apple is going to serve 50% of the US market with Indian made iPhones, for example, where they face lower tariffs. [1] https://www.politico.eu/article/eu-pencils-in-china-summit-for-july/ https://www.politico.eu/article/eu-pencils-in-china-summit-f... [2] I should note I’m not necessarily for or against these tariff actions, but the ongoing rhetoric around them has been kind of annoying and one-sidedly anti-American.
  - testing22321 2y ago
    Only 3% of Chinas GDP is exports to the US. I don’t think they’re going to hurt anywhere near as much https://www.ig.com/en/news-and-trade-ideas/US-China-trade-war-20250409-250409#:~:text=However%2C%20the%20total%20value%20of,economic%20impact%20on%20the%20region. https://www.ig.com/en/news-and-trade-ideas/US-China-trade-wa...
    - ericmay 2y ago
      You're not accounting for countries in which China has set up manufacturing facilities to avoid US tariffs (Vietnam, Mexico, etc.), so the overall figure is higher, albeit indirectly. The other problem is that you're not considering the full scope of impact at the nation state level. It might be "3% of China's GDP", but when you look at dollar figures the US is buying almost $500 billion of Chinese goods, while China is buying around $150 billion. If the US stops importing Chinese goods (as an example), that's $500 billion worth of trade that's good for China that is destroyed, whereas if China cuts off the United States, the US is only losing $150 billion. If you want to minimize the situation by suggesting it's no big deal for China to stop exporting to the United States because it's only 3% of China's GDP, you'd have to make the same argument that it's even less of a big deal for the United States to lose its $150 billion in exports to China. Of course the situation isn't that simple, and you know that.
      - maxglute 2y ago
        US has ~300B trade deficit with PRC. Flip side is US MNCs pulls about ~300B in revenue in PRC that's not counted in trade balance accounting (because western products made in PRC factories sold to PRC consumers isn't cross borders transaction unless profit timely repatrioted, which is rarely) - most of the KFCs and Nikes and Apples can be replaced with domestic. Whereas there aren't much PRC MNCs in US, and what few there are getting lawfared/stomped out of US, i.e. TikTok divestment and de minimis going to kill Shein/Temu. Dependin on how / where things escalate, lots of US MNCs may lose their 10-40% revenue from PRC. There's also next rung of stupid, i.e. TikTok US getting nationalized, CFIUS forcing PRC divestments in agri, media, blah blah. Or US seize PRC assets, fucking with SWIFT, in which case trillions of US capex in PRC and not repatriated MNC profits goes up in smoke. Then we're stepping stones away from Tesla / Apple getting nationalized. Then who knows.
        ericmay 2y ago
        > Then we're stepping stones away from Tesla / Apple getting nationalized. Then who knows. Neither company can be "nationalized" because they're American companies. Apple contracts with Chinese suppliers to build their products. Chinese companies already owns the factories. Tesla has their own factories( or factory?) in China but if China "nationalizes" it, that just amounts to Chinese workers in the Chinese Tesla factory losing their jobs and of course Tesla no longer selling their cars in the Chinese market. > most of the KFCs and Nikes and Apples can be replaced with domestic. Why would they replace with domestic companies? Isn't that unfair for trade? Wouldn't European or Latin American companies enter the market with their products now or be better able to freely compete in the Chinese market? Or is there something missing here? > US has ~300B trade deficit with PRC. What's this number based on? I see a lot of figures floating out there, but similarly to your comment about the flip-side of US companies operating in China like Kentucky Fried Chicken not being accounted for here, you're not accounting for Chinese suppliers and manufacturers set up in other countries to bypass tariffs. Unfortunately it seems everyone (not throwing shade your way here) has their own number to fit their narrative and it's hard to get the full impact. > TikTok US getting nationalized Preferably it should be banned (the fewer social media companies and apps that exist the better), but it would be better if it was forced to be sold to a US company, which is a far more likely scenario then nationalization.
  - JohnFen 2y ago
    China has the whole world to sell to, and the US has decided to make selling to the world less viable. China is better positioned to weather this kind of thing than the US.
    - ericmay 2y ago
      John, On one hand sure China can sell products to the rest of the world. In the extreme case where trade was cut off completely between the US and China who will buy the over $500 billion in goods China previously sold to the United States? Brazil? They have tariffs on electronic products. The EU? I just linked an article where the EU is already asking China to stop shipments that would have been bound for the US or face tariffs on those goods. South East Asia? Japan? Korea? Neither of those countries are going to allow Chinese companies to outcompete their manufacturing sectors. I'm just not sure who exactly has the appetite or money for these goods. On the other hand, why exactly is the US not just able to buy desired goods from other markets? They may be more expensive due to the tariffs in some or many cases, but it's not like the US can't buy iPhones made in India or instead of buying t-shirts made by Chinese subsidiaries in Vietnam you buy them actually made in the United States. Germany has to sell Mercedes Benz. What happens when the EU says "no thanks" to their automobile manufacturers being beat by Chinese ones in the European market? The main argument I've seen made online is basically "prices go up", and I think that can cause a political change, but economically I don't find it to be that compelling. I also find it generally disingenuous that there's a spirit of the US is the sole bad guy here. Donald Trump (who I didn't vote for) is an a-hole, but that doesn't mean other countries weren't engaging in unfair or protectionist trade policies either, nor does it mean they will stop or won't protect their manufacturing bases from Chinese competition.
      - JohnFen 2y ago
        Nobody else is engaging in the punitive tariff rates the US is imposing, so the rest of the world is economically more attractive than the US on the score. I don't see how China will be more hurt by this than the US. Everyone will be hurt, of course, which is one of the reasons why the US starting this trade war is insanity. > that doesn't mean other countries weren't engaging in unfair or protectionist trade policies either True, although Trump massively overstates how much of this is actually happening. However, there are numerous ways to address this that don't involve self-harm. We're just choosing not to do them. Also, the US engages in these practices as much as everyone else. There's more than a whiff of the pot calling the kettle black here.
  - krzyk 2y ago
    Well US started this, so it is fair to be anti-American (someone voted an idiot into the office) for breaking the world economy. First being pro-Russian and making demands to Ukraine and now those tariffs. Trump keeps on giving.
  - woshiwan 2y ago
    Appreciate the different perspective. Curious what would be the end goal of imposing this tariff? Or what the president is trying to get out of it?
    - ericmay 2y ago
      In my mind there are two scenarios: 1. He's literally just a moron and is fixated on tariffs. Many think that's most likely but something tells me it's not the whole story. 2. They see a war with China coming in the next few years and they need to decouple as quickly as possible and make sure the US is not reliant on China or Chinese manufactured products, while also potentially harming Chinese trade. Something to ask here is, if we thought we were going to war with China over Taiwan in the next few years what actions would we take now to better positions ourselves for that coming war? Making our allies angry doesn't seem to be helping, but were EU members really going to send troops to the Pacific to defend Taiwan anyway? Certainly not when they have Russia at their doorstep.
      - woshiwan 2y ago
        Agree with the decoupling, but based on what happened during his last term, tariff doesn’t seem to work for decoupling right? As you said, China just shifted their manufacturing to southeast asia and many of them are still backed by Chinese money. Also the made in US thing didn’t really happen either.
        ericmay 2y ago
        In the latter case the US just enacted high tariffs on those countries as well. Regarding made in US, well, Apple products for example were exempted from the tariffs. This time they aren't.
      - ytpete 2y ago
        If we wanted to decouple from China due to fears of war, shouldn't we be keeping tariffs on EU, Canada, Australia, Japan, and Korea very low? We'd want them to stay closely aligned with us as allies, not push them to build stronger connections to China as a more friendly trading partner than we are.
  - mindslight 2y ago
    Currently, China is giving the US real physical goods in exchange for paper IOUs denominated in USD which China then mostly just holds on to. If the US stops this trade, China can insulate its economy by continuing to manufacture the same products and either use them domestically or dump them in a hole in the ground if necessary. This whole tariff narrative is based on upside down thinking where obtaining material goods somehow constitutes a liability. Are we really that far detached from reality that these memes have legs? I guess so! Yearning to go back to some idyllic past when there was more scarcity is not going to save us, rather it's just going to destroy our own country. The only way forward is positive government action to mitigate the corrosive economic effects of abundance, especially the fast-forwarded abundance from having the world reserve currency. The government has been dropping the ball on doing anything to meaningfully address this for the past several decades - instead being beholden to the disingenuous calls for "fiscal responsibility" of "fiscal conservatism", which have resulted in anything but responsible or conservative behavior. Rather the same new money has all still been created - it has just been handed to banks to create asset bubbles rather than being used purposefully to mitigate the economic damage.
    - ericmay 2y ago
      [dead]
- st3fan 2y ago
  "more expensive" -> "double the price"
  - nailer 2y ago
    Not quite. Tariffs, at least existing ones, are not exclusively borne by the consumer.
    - JohnFen 2y ago
      How true that is depends entirely on whether or not the importers decide to eat the extra cost.
      - robocat 2y ago
        They can reduce costs, or reduce profits. Costs are usually fairly fixed. If profits decrease, I'm guessing it's often better to decide against selling the item (given that profit is the incentive to sell).
    - yadong 2y ago
      depends on the things being imported/exported, prices might be more than double, because the final products might need components that cross borders multiple times.
- belter 2y ago
  Tell the Penguins to call Marco: https://www.youtube.com/shorts/PGnx_ij8XOE https://www.youtube.com/shorts/PGnx_ij8XOE
DarkWiiPlayer 2y ago
Nice, hope they buy more European stuff instead, at least until they manage to just produce the same stuff within China, which they likely aim for already.
ZeroGravitas 2y ago
It feels like the headline needs to specify that these are actual reciprocal, tit-for-tat tariffs exactly matching (some of!) the tariffs that the USA applied on China. Since Trump started calling his made up numbers reciprocal it muddies the waters.
nailer 2y ago
I don’t know what the US sells to China, but in terms of the other direction: the U.S. will likely move towards Indian-made iPhones, the PRC-made iPhones will go to other markets. Clothing will increasingly come from Vietnam. Both countries are moving towards full free trade with the US.
- codingbot3000 2y ago
  You sure? The tariffs slapped on Vietnam say otherwise. The admin really seems to want everything to be produced in the US. Recursively including all the parts.
  - nailer 2y ago
    I’m very sure. Check the news from the days after the tariffs.
- woshiwan 2y ago
  Genetic modified Beans?
rcarr 2y ago
Surely all that is going to happen is that the Chinese exporters set up intermediary companies in countries within the US's 10% import tariff band and then just re-export their goods from there? And then just rotate countries if Trump slaps a bigger tariff on those countries? Feels like they could keep this going pretty easily until Trump leaves office. Or is there something in place to prevent this?
- mindslight 2y ago
  It feels far more efficient for Chinese exporters to set up intermediary companies / warehouses in the US (which many already have, for the most part), call the value of their physical products something like 10% of the retail value (leaving out the cost of consumer sales, marketing, customer service, warranty replacements, imaginary property, etc), pay the tariffs on that 10%, and call it a day. The US is pathologically friendly to foreign investment and I doubt Trump is going to be taking aim at that (lol).
  - rcarr 2y ago
    Surely there's got to be some kind of law surrounding the import price and the expected final retail price? In theory you could import a car, mark it as being valued at 1 cent, pay a 200 percent tariff of two whole cents and then sell at full price. The only danger would be that something happened in transit and the insurance company only pays 1 cent. Surely there's got to be something in place to stop this kind of loophole, seems way too exploitable.
    - mindslight 2y ago
      You're taking it to the extreme whereas a 10% cost basis of a physical good sold to consumers isn't really that far off. If Dewalt claims one of their tools is worth "$200", yet it regularly sells for $100 still with enough margin for domestic distribution, "free shipping", no fault returns, branding/engineering cost of their domestic employees, etc, how much do you think they actually pay the Chinese factory? That's going to be the number written on a cargo manifest even without any shenanigans.
londons_explore 2y ago
Surprised they're only taxing goods... Why not tax services (banking, insurance, etc)? Why not tax IP (pay a tax of ¥30 for every viewing of a US film) Why not tax foreign business? McDonald's China has to pay an extra 10% tax on revenue compared to a non-US company.
- precommunicator 2y ago
  Probably because taxing goods is easy compared to services.

28 points by Philpax 2y ago

So everything made in China coming into the US is more expensive for the consumer, and anything made in the US and exported to China is more expensive, meaning less of it will be bought. Double gut punch for Americans. Hold onto your hats, it’s about to get capital letters BAD.

ericmay 2y ago
It’s also a double gut punch for China, and its manufacturing subsidiaries in other countries. China is extremely reliant on manufacturing exports. Their options such as finding new markets for these products is limited, because other countries want to maintain their industries too. For example: “BRUSSELS — The European Union on Tuesday reached out to Beijing for help in tracking a wave of Chinese imports that is expected to pour toward the EU after U.S. Donald Trump ramped up tariffs on China. … Should the diplomatic initiative with China fail, the EU would probably have to introduce “safeguard measures,” which are special duties intended block to sudden diverted trade flows.” [1] Funny how it’s “safeguard measures” when the EU does it. Why would they need safeguard measures? They don’t want extremely cheap products? Anyway. It’s kind of a judo move - using China’s excess manufacturing capacity against itself. The US can find other countries to manufacture goods over time and also manufacture them here. Prices will go up but it’s not the end of the world. Apple is going to serve 50% of the US market with Indian made iPhones, for example, where they face lower tariffs. [1] https://www.politico.eu/article/eu-pencils-in-china-summit-for-july/ https://www.politico.eu/article/eu-pencils-in-china-summit-f... [2] I should note I’m not necessarily for or against these tariff actions, but the ongoing rhetoric around them has been kind of annoying and one-sidedly anti-American.
- testing22321 2y ago
  Only 3% of Chinas GDP is exports to the US. I don’t think they’re going to hurt anywhere near as much https://www.ig.com/en/news-and-trade-ideas/US-China-trade-war-20250409-250409#:~:text=However%2C%20the%20total%20value%20of,economic%20impact%20on%20the%20region. https://www.ig.com/en/news-and-trade-ideas/US-China-trade-wa...
  - ericmay 2y ago
    You're not accounting for countries in which China has set up manufacturing facilities to avoid US tariffs (Vietnam, Mexico, etc.), so the overall figure is higher, albeit indirectly. The other problem is that you're not considering the full scope of impact at the nation state level. It might be "3% of China's GDP", but when you look at dollar figures the US is buying almost $500 billion of Chinese goods, while China is buying around $150 billion. If the US stops importing Chinese goods (as an example), that's $500 billion worth of trade that's good for China that is destroyed, whereas if China cuts off the United States, the US is only losing $150 billion. If you want to minimize the situation by suggesting it's no big deal for China to stop exporting to the United States because it's only 3% of China's GDP, you'd have to make the same argument that it's even less of a big deal for the United States to lose its $150 billion in exports to China. Of course the situation isn't that simple, and you know that.
    - maxglute 2y ago
      US has ~300B trade deficit with PRC. Flip side is US MNCs pulls about ~300B in revenue in PRC that's not counted in trade balance accounting (because western products made in PRC factories sold to PRC consumers isn't cross borders transaction unless profit timely repatrioted, which is rarely) - most of the KFCs and Nikes and Apples can be replaced with domestic. Whereas there aren't much PRC MNCs in US, and what few there are getting lawfared/stomped out of US, i.e. TikTok divestment and de minimis going to kill Shein/Temu. Dependin on how / where things escalate, lots of US MNCs may lose their 10-40% revenue from PRC. There's also next rung of stupid, i.e. TikTok US getting nationalized, CFIUS forcing PRC divestments in agri, media, blah blah. Or US seize PRC assets, fucking with SWIFT, in which case trillions of US capex in PRC and not repatriated MNC profits goes up in smoke. Then we're stepping stones away from Tesla / Apple getting nationalized. Then who knows.
      - ericmay 2y ago
        > Then we're stepping stones away from Tesla / Apple getting nationalized. Then who knows. Neither company can be "nationalized" because they're American companies. Apple contracts with Chinese suppliers to build their products. Chinese companies already owns the factories. Tesla has their own factories( or factory?) in China but if China "nationalizes" it, that just amounts to Chinese workers in the Chinese Tesla factory losing their jobs and of course Tesla no longer selling their cars in the Chinese market. > most of the KFCs and Nikes and Apples can be replaced with domestic. Why would they replace with domestic companies? Isn't that unfair for trade? Wouldn't European or Latin American companies enter the market with their products now or be better able to freely compete in the Chinese market? Or is there something missing here? > US has ~300B trade deficit with PRC. What's this number based on? I see a lot of figures floating out there, but similarly to your comment about the flip-side of US companies operating in China like Kentucky Fried Chicken not being accounted for here, you're not accounting for Chinese suppliers and manufacturers set up in other countries to bypass tariffs. Unfortunately it seems everyone (not throwing shade your way here) has their own number to fit their narrative and it's hard to get the full impact. > TikTok US getting nationalized Preferably it should be banned (the fewer social media companies and apps that exist the better), but it would be better if it was forced to be sold to a US company, which is a far more likely scenario then nationalization.
- JohnFen 2y ago
  China has the whole world to sell to, and the US has decided to make selling to the world less viable. China is better positioned to weather this kind of thing than the US.
  - ericmay 2y ago
    John, On one hand sure China can sell products to the rest of the world. In the extreme case where trade was cut off completely between the US and China who will buy the over $500 billion in goods China previously sold to the United States? Brazil? They have tariffs on electronic products. The EU? I just linked an article where the EU is already asking China to stop shipments that would have been bound for the US or face tariffs on those goods. South East Asia? Japan? Korea? Neither of those countries are going to allow Chinese companies to outcompete their manufacturing sectors. I'm just not sure who exactly has the appetite or money for these goods. On the other hand, why exactly is the US not just able to buy desired goods from other markets? They may be more expensive due to the tariffs in some or many cases, but it's not like the US can't buy iPhones made in India or instead of buying t-shirts made by Chinese subsidiaries in Vietnam you buy them actually made in the United States. Germany has to sell Mercedes Benz. What happens when the EU says "no thanks" to their automobile manufacturers being beat by Chinese ones in the European market? The main argument I've seen made online is basically "prices go up", and I think that can cause a political change, but economically I don't find it to be that compelling. I also find it generally disingenuous that there's a spirit of the US is the sole bad guy here. Donald Trump (who I didn't vote for) is an a-hole, but that doesn't mean other countries weren't engaging in unfair or protectionist trade policies either, nor does it mean they will stop or won't protect their manufacturing bases from Chinese competition.
    - JohnFen 2y ago
      Nobody else is engaging in the punitive tariff rates the US is imposing, so the rest of the world is economically more attractive than the US on the score. I don't see how China will be more hurt by this than the US. Everyone will be hurt, of course, which is one of the reasons why the US starting this trade war is insanity. > that doesn't mean other countries weren't engaging in unfair or protectionist trade policies either True, although Trump massively overstates how much of this is actually happening. However, there are numerous ways to address this that don't involve self-harm. We're just choosing not to do them. Also, the US engages in these practices as much as everyone else. There's more than a whiff of the pot calling the kettle black here.
- krzyk 2y ago
  Well US started this, so it is fair to be anti-American (someone voted an idiot into the office) for breaking the world economy. First being pro-Russian and making demands to Ukraine and now those tariffs. Trump keeps on giving.
- woshiwan 2y ago
  Appreciate the different perspective. Curious what would be the end goal of imposing this tariff? Or what the president is trying to get out of it?
  - ericmay 2y ago
    In my mind there are two scenarios: 1. He's literally just a moron and is fixated on tariffs. Many think that's most likely but something tells me it's not the whole story. 2. They see a war with China coming in the next few years and they need to decouple as quickly as possible and make sure the US is not reliant on China or Chinese manufactured products, while also potentially harming Chinese trade. Something to ask here is, if we thought we were going to war with China over Taiwan in the next few years what actions would we take now to better positions ourselves for that coming war? Making our allies angry doesn't seem to be helping, but were EU members really going to send troops to the Pacific to defend Taiwan anyway? Certainly not when they have Russia at their doorstep.
    - woshiwan 2y ago
      Agree with the decoupling, but based on what happened during his last term, tariff doesn’t seem to work for decoupling right? As you said, China just shifted their manufacturing to southeast asia and many of them are still backed by Chinese money. Also the made in US thing didn’t really happen either.
      - ericmay 2y ago
        In the latter case the US just enacted high tariffs on those countries as well. Regarding made in US, well, Apple products for example were exempted from the tariffs. This time they aren't.
    - ytpete 2y ago
      If we wanted to decouple from China due to fears of war, shouldn't we be keeping tariffs on EU, Canada, Australia, Japan, and Korea very low? We'd want them to stay closely aligned with us as allies, not push them to build stronger connections to China as a more friendly trading partner than we are.
- mindslight 2y ago
  Currently, China is giving the US real physical goods in exchange for paper IOUs denominated in USD which China then mostly just holds on to. If the US stops this trade, China can insulate its economy by continuing to manufacture the same products and either use them domestically or dump them in a hole in the ground if necessary. This whole tariff narrative is based on upside down thinking where obtaining material goods somehow constitutes a liability. Are we really that far detached from reality that these memes have legs? I guess so! Yearning to go back to some idyllic past when there was more scarcity is not going to save us, rather it's just going to destroy our own country. The only way forward is positive government action to mitigate the corrosive economic effects of abundance, especially the fast-forwarded abundance from having the world reserve currency. The government has been dropping the ball on doing anything to meaningfully address this for the past several decades - instead being beholden to the disingenuous calls for "fiscal responsibility" of "fiscal conservatism", which have resulted in anything but responsible or conservative behavior. Rather the same new money has all still been created - it has just been handed to banks to create asset bubbles rather than being used purposefully to mitigate the economic damage.
  - ericmay 2y ago
    [dead]
st3fan 2y ago
"more expensive" -> "double the price"
- nailer 2y ago
  Not quite. Tariffs, at least existing ones, are not exclusively borne by the consumer.
  - JohnFen 2y ago
    How true that is depends entirely on whether or not the importers decide to eat the extra cost.
    - robocat 2y ago
      They can reduce costs, or reduce profits. Costs are usually fairly fixed. If profits decrease, I'm guessing it's often better to decide against selling the item (given that profit is the incentive to sell).
  - yadong 2y ago
    depends on the things being imported/exported, prices might be more than double, because the final products might need components that cross borders multiple times.
belter 2y ago
Tell the Penguins to call Marco: https://www.youtube.com/shorts/PGnx_ij8XOE https://www.youtube.com/shorts/PGnx_ij8XOE

DarkWiiPlayer 2y ago

Nice, hope they buy more European stuff instead, at least until they manage to just produce the same stuff within China, which they likely aim for already.

ZeroGravitas 2y ago

It feels like the headline needs to specify that these are actual reciprocal, tit-for-tat tariffs exactly matching (some of!) the tariffs that the USA applied on China. Since Trump started calling his made up numbers reciprocal it muddies the waters.

nailer 2y ago

I don’t know what the US sells to China, but in terms of the other direction: the U.S. will likely move towards Indian-made iPhones, the PRC-made iPhones will go to other markets. Clothing will increasingly come from Vietnam. Both countries are moving towards full free trade with the US.

codingbot3000 2y ago
You sure? The tariffs slapped on Vietnam say otherwise. The admin really seems to want everything to be produced in the US. Recursively including all the parts.
- nailer 2y ago
  I’m very sure. Check the news from the days after the tariffs.
woshiwan 2y ago
Genetic modified Beans?

rcarr 2y ago

Surely all that is going to happen is that the Chinese exporters set up intermediary companies in countries within the US's 10% import tariff band and then just re-export their goods from there? And then just rotate countries if Trump slaps a bigger tariff on those countries? Feels like they could keep this going pretty easily until Trump leaves office. Or is there something in place to prevent this?

mindslight 2y ago
It feels far more efficient for Chinese exporters to set up intermediary companies / warehouses in the US (which many already have, for the most part), call the value of their physical products something like 10% of the retail value (leaving out the cost of consumer sales, marketing, customer service, warranty replacements, imaginary property, etc), pay the tariffs on that 10%, and call it a day. The US is pathologically friendly to foreign investment and I doubt Trump is going to be taking aim at that (lol).
- rcarr 2y ago
  Surely there's got to be some kind of law surrounding the import price and the expected final retail price? In theory you could import a car, mark it as being valued at 1 cent, pay a 200 percent tariff of two whole cents and then sell at full price. The only danger would be that something happened in transit and the insurance company only pays 1 cent. Surely there's got to be something in place to stop this kind of loophole, seems way too exploitable.
  - mindslight 2y ago
    You're taking it to the extreme whereas a 10% cost basis of a physical good sold to consumers isn't really that far off. If Dewalt claims one of their tools is worth "$200", yet it regularly sells for $100 still with enough margin for domestic distribution, "free shipping", no fault returns, branding/engineering cost of their domestic employees, etc, how much do you think they actually pay the Chinese factory? That's going to be the number written on a cargo manifest even without any shenanigans.

londons_explore 2y ago

Surprised they're only taxing goods... Why not tax services (banking, insurance, etc)? Why not tax IP (pay a tax of ¥30 for every viewing of a US film) Why not tax foreign business? McDonald's China has to pay an extra 10% tax on revenue compared to a non-US company.

precommunicator 2y ago
Probably because taxing goods is easy compared to services.