White House announces 25 percent tariff on Chinese tech goods | Hacker News Reader

White House announces 25 percent tariff on Chinese tech goods

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354 pointsaaronbrethorst363 comments

> It includes a broad range of components used in electronics manufacturing, specifically naming touchscreens, batteries, and electric motors. General components like transistors are also named on the list as well as more specific components used in televisions, cameras, and radio receivers. [..] Notably, the list does not include cellphones or completed televisions.

So, this will, er, serve to discourage companies from making consumer goods in the US, with buying consumer goods from China becoming relatively more attractive? Doesn't seem very well thought out.

Made in USA electronics goods are now more expensive via tariffs because the equipment and the components are now more expensive. Brilliant.

Well, more likely the companies making them will just move production elsewhere or go out of business. Components are big part of the cost of your average consumer device, and margins mostly aren't high.

It depends a lot on exactly what kind of production facilities we’re talking about moving. Simple plastic injection mold shops? Sure, maybe. Multi-billion dollar chip fab plants? Not so much.

Right. It is extraordinarily difficult to just pack up a high-tech factory and move it to another country. Actually moving the plant and machines is the easiest part, the hard part is the people. Training people to be experts at high tech jobs takes a lot of time, and even then you're losing the decades of experience and the high concentration of likewise experienced and well-trained suppliers nearby.

Of course we could just move the people here too, but our current immigration policy doesn't seem too fond of that approach either.

I'd say the other hard part is finding manufacturers you can trust. You have to think that you're basically exporting company secrets when you manufacture offshore.

Taiwan fabricates chips. PRC doesn't.

Seems like a good guise for industry leaders to move operations of out the US in a climate where political sentiment is high for keeping it here.

Another reading is that the thought going in to the tariffs was not directed toward helping Americans, but rather creating headlines big enough to crowd out reporting on the various scandals of the administration.

Ever seen "Wag The Dog?"

He bombed Syria right after some bad news. I think he's well aware of the concept.

Trump has been talking about the need for tariffs and industrial policy since the 1980s. This is not some scheme he's cooked up on the spur of the moment.

When it comes to Trump (as a non-American) the old saying "Never attribute to malice what can be explained by stupidity" breaks down.

With him and the people he surrounds himself with, inept would be an improvement.

He managed to piss off the Canadians ffs, Thats the diplomatic equivalent to punching a friendly puppy.

Also is anyone during or after Trump ever going to trust anything with a US signature on again... I can't see it.

There’s an extension to Hanlon’s Razor that too many forget:

“Never attribute to malice what can be explained by stupidity, but don’t dismiss malice.”

Any coincidence that Foxconn is building a large display factory in Wisconsin?

The $4 billion in incentives and waiving of environmental reviews had absolutely nothing to do with it: http://money.cnn.com/2017/12/28/news/companies/foxconn-wisco...

The Foxconn plant deal in Wisconsin is just so disgracefully bad - over $4B in incentives to get 3,000 jobs. That's over a million per employee.

It's very reminiscent of sports stadium deals. Except the companies that run sports teams typically haven't had to put suicide nets around their buildings.

I think that's been in the works for a while, long before any of this tariff talk has been happening. Might have been before trump came into office, but I can't remember for sure

No, Foxconn came along after the election. Trump has been carrying it around as one of his bigger economic successes.

I just have to wonder if Foxconn is now turning the screws to Trump. Give us some protection against the other Chinese display manufacturers or we'll scale down the project.

Is it too late to restore America's capacity to manufacture fundamental goods like steel and electronics components?

I guess my earlier comment was too long, so let me provide a shorter version: this action actively harms anyone attempting to design, prototype, and manufacture electronic devices in the US. There isn't a single component in the projects I'm currently working on which isn't impacted by this. My cost of goods just went up by 25% across the board today in an effort to help "protect" American businesses.

I don't feel like I've been protected by this.

The full list: https://ustr.gov/sites/default/files/enforcement/301Investig...

Earlier comment (now hidden) with a list pertinent to hardware developers: https://news.ycombinator.com/item?id=17320653

Trumps steel and aluminum tariff before this has hurt my industry. Half of our vendors went up between 3 to 5% on finished good prices. We bought raw stainless steel as well for custom fab work and every vendor, imported or not imported, raised prices at 25 to 30%. Even though the policy is not in effect ?yet.

It only affected US manufacturers and left chinese finished good imports unaffected

Also if anyone wants to know more one of my vendors sent me an official FAQ and their analysis on why they raised prices. The vendor is an industry leader [they build industrial equipment], is not biased, and is reputable on this type of information. I was sent this last month

QUESTION: What is your justification for the cost increase?

With the pending implementation of the steel tariff under section 232, we have been negatively impacted due to price changes from mills. Mills are primarily focusing in on high profit type grades of material such as 304.

QUESTION: Why are the mills' pricing increasing?

First, the 25% tariff is to be applied to certain foreign material. Consequently, this has provided an avenue for North American mills to raise pricing. Next, the restriction of material from foreign countries has created a shortage of material. The announcement of Section 232 has stopped/slowed the flow of foreign steel, causing the shortage.

QUESTION: Are some countries exempt from the steel tariffs?

Yes, however, not completely. For example, Korea has been restricted to 70% of shipments since 2015. Brazil's exemption has not been finalized. The same is true for other countries. Each country needs to negotiate directly with President Trump for all appeals. NAFTA countries (Mexico and Canada) are currently exempt, but will be subject to the new NAFTA rules, currently in negotiations.

QUESTION : What other variables are impacting pricing?

Nickel has adjusted from the $10K range to the $13K range over the last 4 months. Chrome has adjusted from $1.10 to $1.40 during this same period. Scrap/Iron, which makes up 80% of stainless steel, has adjusted from $325/ ton to $385/ton. Other alloys have had significant adjustments as well. For example, hot rolled steel has adjusted $610/ton in November and $856/ton in March.

QUESTION: Are there other material options?

With the reduction of imports, U.S. mills are focused on the highest revenue products. This includes primarily heavy gauge (thicker) 304. Material grade 201 and 430 are more difficult to produce and/or have higher production costs, along with supply shortage. This results in the mills focusing on higher prof it material. We anticipate further price pressure on certa in grades of materials.

QUESTION: Where does [our vendors company] steel come from?

Our steel comes primarily from U.S. and Mexico; however, we do get some steel through other processors who purchase mat erial from targeted countries. We are also impacted by U.S. mills' price increase/surcharges in response to the Section 232. Many mills have already announced double digit price increases within days of the president ial announcement. In addition, various surcharges will be effective in 02.

QUESTION: Can you purchase your steel from less impacted nations (i.e., European countries)?

There are several variables that limit this opportunity. Product mix makes the change more difficult and time consuming. Due to increased demand, lead time has substantially increased, which result in further price increases in less impacted countries. The cost to produce steel is relatively the same. Labor in Europe mirrors costs in the U.S. Add itionally, currency rates adjust constantly, and the U.S. dollar is currently weaker than the Euro. Shipping costs, lead time and availability also play into consideration.

QUESTION: What is the impact of steel as a percentage of product?

Steel and aluminum amount to a significant% of most of our products. However, we are only passing partial impact to our customer base.

QUESTION: What are [insert vendors name] projections regarding costs as we move into next year?

Tariffs create uncertainty. It is difficu lt to say what changes domestic mills will implement to add capacity. With the current situation, the U.S. Steel Market will maintain a gap in supply and demand. Additional concerns include how fore ign countries will respond to these tariffs; so, the situation could get worse before it gets better.

With all that said, we are doing our best NOT to pass all the cost increases to our customers. Based on current and future projections, we are only passing partial impact to our customers, while working diligently to reduce costs and mitigate supply and lead times thought other means. But, due to the large steel/aluminum content in our products and unprecedented impact and uncertainty in the global supply markets, we are forced to take this measure.

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IN SHORT, even though they might not buy the steel / tariff from China, prices went up globally across the board. Normally vendors raise 3 to 5% annually due to inflation, but because of trumps tariff they were forced to raise it 3 to 5% TWICE within a year. Note some of these pieces of equipment range from 5k to 100k in cost, so 3 to 5% is a huge amount.

Your comment proves too much. It would equally apply in the scenario where the foreign country is dumping goods to destroy local competition (i.e. the "Walmart destroys local stores" story writ large). And yet, in that scenario most people would be in favor of tariffs.

More generally, as I understand it, the reason economic orthodoxy is against tariffs is because of "comparative advantage", and the idea that different countries could produce different goods or services more efficiently than others, not just more cheaply, due to subsidization or other distortionary interventions like that.

You could make an argument along those lines here, and that would be valid, but the superficial observation that your prices went up isn't really enough to say either way.

The US has higher wages than third world countries for most workers and more than China. So for things that take more human labor, we are disadvantaged if we make them. Those things may be cheaper to but and import. Things with more IP behind them or requiring less labor are more likely to be efficiently produced in the US. So importing those goods that can be much more cheaply in say china or mexico saves everyone in the us from buying a higher made local object.

Tariffs might help a very few people, those working in a factory that makes these 'higher human overhead' objects. But everyone else will (1) first pay more for the object that's probably still not made in the us but not imported at higher cost. Things built by using that now higher priced widget will cost 25% more because of the tariff. so they have to lose most/all profit and/or increase their price, kicking it up the food chain.

So it's a net negative to have tariffs on things that can be made by basic hourly workers. There must be some people helped, like say a steel producer who makes things that was competing with China. But like coal workers, there aren't that many. Remember there are more Arby's workers than coal miners.

Why did Henry Ford pay his workers enough to buy Ford vehicles?

Why is paying higher wages while keeping the money in the community/country a "disadvantage" exactly? Aren't you looking only at consumption without considering production?

Honestly, this sounds like parroted ten year old globalist propaganda. Craft beer has already shot this entire line of argument down, and other industries show signs of beginning to follow that model.

And the sharply increasing cost of long haul as manual truckers exit the industry is hastening the trend in 2018. Historically transportation costs exceeded any efficiency of "comparative advantages".

Henry ford's paying their workers more was considered revolutionary. I am actually in favor of paying people a good living wage, but we have to do something to make it work. I'm a programmer and I bet I make more than someone in India, so I should have to be doing something extra to justify that. I didn't mean to parrot anyone else's ideas, these just seem like obvious idea.

If I was a worker in a factory making things with physical labor, and I have a typical us standard of living, how can I do that more efficiently than someone in china, who gets paid less? I love craft beer, but it's a combination artistic and luxury product. It's not like making ball bearings. It has an aspect of knowing what the micro local market wants. It has a marketing and uniqueness possibly. On the other hand, no one is I know is making craftsman lumber to make houses out of (but they could I guess).

To make a living wage work, we'll actually have to make sure some of the productivity improvements benefit workers. Productivity has grown 6x as fast[1] as pay.

It's not the workers who have to do something extra to justify what they're making.

[1] https://www.epi.org/productivity-pay-gap/

Ok. So you invest and risk your capital to make your business better and that should somehow benefit people that you pay to do some stuff? People that you need less and less because that's mostly what raising productivity means?

I think the right way is sealing tax system to efficiently gather tax from businesses so that productivity gains can properly benefit everybody and just tax employees less if you want that gains to improve employees wellbeing. Or even subsidise poor people through income tax credit or basic income.

> Why did Henry Ford pay his workers enough to buy Ford vehicles?

Well, the theory was that if his workers could buy his cars he'd make more money.

But that is the same type of logic as selling items at marginal loss and trying to make a profit by moving huge volumes. The fact that it worked so well suggests there was something else going on that I don't know about.

> Why is paying higher wages while keeping the money in the community/country a "disadvantage" exactly? Aren't you looking only at consumption without considering production?

So obviously the absolute number doesn't matter - otherwise we could multiply all dollar figures by 10 at the end of each year and call ourselves wealthy! :D

The relative distribution is everything. The game is to split people up into the nearly-everyone camp who take resources and consume them, and the rare talent camp that can turn resources into more resources. I'll call our rare and talented individuals group 2.

Take a silly example, wood. Give most people wood, and most people can burn it for heat. The more productive individuals can build something out of it, like a house (which is a better long-term investment in terms of conserving heat). Maybe the most productive would turn it into an axe shaft and cut down a few trees, liberating more wood.

The aim of the game is to move as much of societies resources to group 2 as we can reasonably manage, because then we will have massive resource surpluses that we can all enjoy.

"Keeping [resources] in a community" is a fine if your community has a couple of people in group 2 that you can divert them to. Otherwise, you'll find that all your resources get consumed and mysteriously there is no surplus any more. If you give all your resources to productive foreigners, they can give you back the same amount, plus a little extra, and themselves be wealthy. Discovering this little dynamic is the heart of economics.

The downside is that true group 2-ers are rare, and usually busy enough that they aren't very visible. People forget about them and try to divert resources to the deserving but chronically unproductive instead. If it gets extreme, communism happens and everyone starves.

What’s special about craft beer?

https://www.theatlantic.com/business/archive/2018/01/craft-b...

It's a negative in the short run, but in the long run as China moves further up the value chain it's less clear, at least to me.

Correct, his comment doesn’t take into account counter scenarios, that’s important to be mindful of.

Nonetheless it’s still illustrative of, as you call it, economic orthodoxy. Put more plainly, most economist say this shits no good. It can be very counterproductive, dangerous even.

NO!! Don't you understand??

Yes, we'll suffer for 50 years, BUT in that time the supply chain will be created in the U.S. and our grandkids and their children will be able to benefit from having all that industry in the U.S. instead of China.

And if I'm wrong, I won't be alive to be able to say I'm sorry to my grandkids who are now living in a barren wasteland.

The best solutions are the ones you won't be around to see fail.

By the way... this strategy will work as long as the entire rest of the world doesn't figure it out, keep their tariffs low, and have the supply chain move to them instead. So PLEASE don't let anyone in the EU, Africa, South America, Canada, Central America, or Indonesia see this comment! We only have to keep this secret for another 49.9 years!

P.S. I'm not joking. That's is the strategy he's following.

The strategy he’s following is to throw bones to his base and make the people of the country pick up the tab. If you’re applying an economic lens here, you’re solving the wrong problem.

This. If anyone doesn't understand why ljw1001's comment is the correct interpretation, I highly recommend Beuno do Mesquita and Smith's "The Dictator's Handbook".

https://smile.amazon.com/Dictators-Handbook-Behavior-Almost-...

Is the cover for "The Innovators" a rip-off of this cover on purpose, or by coincidence?

https://www.amazon.com/Innovators-Geniuses-Revolution-Isaacs...

Adapted by CGP Grey for people who don't read:

The Rules for Rulers https://www.youtube.com/watch?v=rStL7niR7gs

IMHO, the reason is not really to protect US manufacturers. It is about long-running negative balance of trade between US and the rest of the world.

Protectionism rhetoric is a sugar-coat for Americans who will have to foot the bill by paying more for imported goods, but honestly, who else should?

https://en.wikipedia.org/wiki/United_States_Balance_of_trade

But isn't the reason these products are made in China because it's inherently both more efficient and cost-effective?

You're saying we should make products in a less efficient and more expensive way to avoid relying on other countries?

And by the way isn't the bulk of our imports raw materials anyway?

> And by the way isn't the bulk of our imports raw materials anyway?

I would assume no. If you see the packaging of almost-everything (apart from food/drinks), chances are that they are made in China (and designed in X-Y-Z country).

I think you might be right. Cars, computers, TVs seem to be big imports. But America does not produce all of it's own rare earth metals so manufacturing some products without also increasing raw material production could be an issue - if our goal is to decrease reliance on other countries.

But America does not produce all of it's own rare earth metals so manufacturing some products without also increasing raw material production could be an issue - if our goal is to decrease reliance on other countries.

We have domestic rare earth metal resources. Right now, we don't mine it here, because it's too expensive to get rid of the resulting Thorium. If there was only a market for that stuff...

What products are "inherently more efficient and cost-effective" in China?

I think it's mostly that raw materials and labor are likely cheaper in China.

It's also cheaper for us not having to deal with waste and pollution. (Although i understand that it's ultimately everyone's problem)

>You're saying we should make products in a less efficient and more expensive way to avoid relying on other countries?

In this case yes. This is competition between nation-states we're talking about, viewing the entire relationship through the narrow lens of economic efficiency is missing the forest for one specific tree.

And viewing "this" through the extremely more narrow 19th century lens of competition between nation states completely ignores the entirety of 20th century economic and geopolitical thinking.

There's no need to bring mercantilism into "this". If you go to France, for example, most people there buy nicer clothes but less often than consumers do in the US so there is a large industry of artisans whose jobs don't depend on the global competitive landscape. Unlike in the US, these artisans make products that almost everyone has access to instead of catering to the rich/super rich. It's not a question of efficiency but desire to support local industries with livable wages - an efficiency of regional wealth distribution if you will. In this sense, France is competing for the money that the industry generates with other nation states but it's not a zero-sum game where France's gain is China's loss.

Unfortunately, American consumers are unwilling to pay the higher prices such a culture requires so instead economic nationalists try to push the mercantilist bullshit in the name of protecting domestic industries and national security.

So then these are protectionist policies and not in the spirit of pure capitalism. And these policies are in place for "the good of the nation" as such any policy good for the nation is supposed to be a rational action notwithstanding the effects of unintended or retaliatory consequences. And lastly, we're to "trust" a single man's unilateral tariff power that all will be well.

Is that all correct?

> You're saying we should make products in a less efficient and more expensive way to avoid relying on other countries?

Not "other countries", just China.

Now, I'm not an us citizen and I don't like Mr Trump particularly, but consider the following: when you say "less efficient" what are you referring to? Is it technology? USA are certainly not behind China on technology. So what is missing to the equation? It's labor. China is so "efficient" because of its ultra-capitalist-masked-as-communist regime. Also, you're not considering environmental impact (that the US, while not excelling at this, actually do consider).

All this (carelessness of environmental impact and no freedom of thought) are basically unfair competition and Donald Trump is right on this initiative.

As a left-leaning person I just cannot understand how is it even possible to accept as the norm the fact that a totalitarian regime like China's has got such a nice treatment so far.

My 2¢

> Also, you're not considering environmental impact (that the US, while not excelling at this, actually do consider).

The US is a bigger polluter (per capita) than China. The current administration at the EPA seems to view environmental considerations as hindrances to industry competitiveness.

That isn’t true. The USA is a bigger producer of carbon per capita, but not pollution, which is defined very differently. This is why hebei cities have many AQI days above a normal 500 yet everyone freaks out whenever AQI in the states breaks 100 during a forest fire.

The EPA has never really bothered that regulate carbon, but they come down hard on the kind of air, water, and soil pollution that exists in China.

Should the USA do more about carbon? Ya, global warming sucks. But the EPA has solved the pollution problem that it was originally envisioned to solve.

The US is a bigger per-capita polluter only because the average Chinese "capita" can't afford to (or otherwise doesn't for some other reason, but knowing Chinese living conditions, I'd bet affordability is the main factor) do/buy/use nearly as many pollution-causing things as the average American "capita".

As a specific example, the US is (according to Wikipedia at least) second only to San Marino in vehicles per capita (910 for every 1000 people). China is in 73rd place, with a much more modest 154. Electricity consumption is similarly different, with the US' per-capita electricity consumption being triple that of China's (despite China having almost double the total electricity consumption of the US).

If the average Chinese had the same purchasing power as the average American, I can guarantee that China's per-capita pollution would skyrocket to beyond US levels.

> Not "other countries", just China.

It's not just China. There's also Mexico, Canada, Europe ... I don't know exactly the current state of affairs but Trump certainly doesn't punish China because of its bad working conditions.

I agree with the principle of bringing local jobs back, bolster our own industries to be more self-sufficient, however I think it is being done in the most disruptive and unstabalizing way possible. We should be going for a firm but gentle push, instead of swinging a sledgehammer around our heads and hoping we don't break the wrong skulls.

Just wondering, but what does a "firm but gentle push" look like that brings "back" local jobs? "Bringing back local jobs" is the entirely wrong way to solve the issues facing those that are losing jobs in declining domestic industries. It's just the easiest for a (probably) blue-collar worker to engage with and the easiest for a politician to sell, even if it's pure fantasy.

> "Bringing back local jobs" is the entirely wrong way

if so, what is the right way?

Workers need new jobs, most likely in new industries. That's how it's always worked.

But a coal miner learning a new skill/new skills is a lot harder for him than just getting his old coal mining job back... Unfortunately one of those (well maybe both of them) isn't going to happen.

This is just as true for steel manufacturing.

To compete with China 25% tariffs are nothing. We're talking about goods costing a fraction of what is made in the western world (if they're still made at all). In the end only common people will be pissed because their full-Chinese cellphone costs $250 instead of $200 compared to the half-Chinese one which still costs $600, and not a single job will be created. To me that's pure propaganda.

The irony is that to compete with China it would be also necessary a huge low cost workforce the US alone cannot provide; too bad Trump just built a wall and enacted laws to keep a good part of that workforce unavailable for hire.

People seriously overestimate the level of intent in Trump's decisions. The people who advise him might be more mindful but he certainly is not.

> Canada

too late.

>our grandkids and their children will be able to benefit from having all that industry in the U.S. instead of China.

When those products were made here, it led to toxic chemical plumes and widespread soil contamination around the factories that produced semiconductors. [1]

>I'm sorry to my grandkids who are now living in a barren wasteland.

Trichloroethylene contamination produces heart defects, kidney and liver cancer. You are advocating to literally produce a toxic wasteland. [2]

1. https://www.nytimes.com/2018/03/26/lens/the-superfund-sites-...

2. https://en.wikipedia.org/wiki/Trichloroethylene#Physiologica...

So... your okay with Chinese kids with heart defects, kidney and liver cancer. The USA has more enforcement over these kind of things. If toxic pollution is your only concern, yes it is better to have those industries in USA.

>So... your okay with Chinese kids with heart defects, kidney and liver cancer.

Show me where I said that. Of course not. You seem to be ok with every country that hopes to participate in the technological economy having their own contaminated region.

Step back for a second. Think of the earth like a single-unit closed system. Would we rather have 195 regions contaminated with TCE or one/two?

Your petty nationalism would force those kids to stay in their country AND have them deal with the toxic waste of their protectionist government-subsidized industry because they'll have no other choice but to.

You're also making the argument that somehow we'd have the political will to both institute tariffs that protect the industry AND police those industries when they harm our environment. Guess what buddy, those are contradictory ideals. The USA isn't some magical place where we can defy these incentives.

Your assertion that we'd be better at managing waste here is especially fantastical considering the present EPA chairman. Scott Pruitt has undermined the protection of our environment at every opportunity. [1]

1. https://www.nytimes.com/2017/12/19/health/epa-toxic-chemical...

> Show me where I said that.

it seems like a logical implication, unless you're also entertaining the idea of production ending altogether.

> Would we rather have 195 regions contaminated with TCE or one/two?

i'm not sure, would 195 be better, or have some advantages? will all of these 'regions' be identical?

> Your petty nationalism would force those kids to stay in their country AND have them deal with the toxic waste of their protectionist government-subsidized industry because they'll have no other choice but to.

and you advocating that china be the location of choice for toxic waste will surely result in something different?

> Show me where I said that

Most Chinese people lack the freedom to live and work where they choose. Most Americans have that freedom.

So if it is handled here in the US then not only will there be less pollution but far fewer kids would be impacted.

> the supply chain will be created in the U.S.

Metric or Imperial?

Are there no American sources of these components?

The tariffs seem to be targeted at protecting such companies.

No decision is good for everyone. Unfortunately for you, this one isn’t

This is one of those "bad for everyone" decisions.

Care to explain your reason for thinking that?

It is actually quite self-explanatory: if an action that is intended to protect one party (US electronics manufacturers) at the expense of another party ends up instead harming the former, then by definition said action is good for no one.

It’s actually good for every country not affected by it.

Name even one country not adversely affected by increased tariffs? I’m genuinely curious who comes out ahead on this.

Do you have any references/information showing that it harms the majority of US electronics manufacturers? Just wondering how you came to that conclusion

If everyone has to pay the tariff, then everyone has their costs go up, and you've basically just created a tax on the industry.

Agreed. Does everyone have to pay this tarrif? Or are you suggesting certain things should be immune from tariffs?

[flagged]

> or did anything useful for humanity

China has been around for a long, long time and has gone through many phases, including the current incarnation. In this time they have done a great many things for humanity. Including, one could argue, hugely reducing the cost of manufactured goods.

You talk about fairly competing like the US does not massively subsidize many, many industries, undercutting other countries. Not to mention some of the stuff it did in the 80's around south America.

And let's not talk about the fact that the US stole a lot of trade secrets and IP during its industrialization from Britain and other countries.

Feeling threatened by another nation going through its industrialization process and iterating upon it is not a good look, IMO, especially when now the glove is on the other hand so to speak.

The problem you describe is reasonable. But this tariff is worse than doing absolutely nothing about it.

Companies have three options:

1. Do nothing in the US except [perhaps] selling the finished product, and use whatever components you want.

2. Use chinese components in US manufacturing.

3. Assemble in the US using no Chinese components.

Given the scenario you've described, presumably #3 > #2 > #1. And right now, almost everything is taking route #1.

So what does this tariff do for companies currently taking route #1? The tariff doesn't affect finished products, so there's no direct impact on them.

If they want to move something to the US, they'll find themselves in #2, the group that's hit with the tariff. Is it a good thing to discourage that?

It also discourages products that are currently america-only from adding chinese components. That might have prevented today's situation if it were enacted in 1980, but it's pretty much irrelevant today.

Yes, because China being lower on the developmental scale than the US is a bad thing.

Also, copying isn't cheating. Copying/imitating is the free market at work.

Copying isn’t cheating but they have spies in the top tech firms in this country. Everywhere in the world that’s cheating. Stealing confidential proprietary anything anywhere in the modern world will send you to jail, whose sending China to jail?

Donald Trump and your mad about it.

Many would love to see a single US official going to jail for starting wars under false premise, installing puppet regimes and ruining whole ecosystems to support business interests, from banana imports to oil and gas, and cheap clothes.

At 5% you would laugh it off as a sales tax.

I'm curious if these tariff taxes will meaningfully lower the budget deficit.

> I'm curious if these tariff taxes will meaningfully lower the budget deficit.

I think the consensus on this one was that it wouldn't.

I understand your point and am not in favor of these tariffs, but does anyone else think it's kind of silly that every single chip and component and interface comes out of China?

How much of the tech industry goes poof if they decide to stop exporting to the US entirely? Seems like a precarious position.

Put another way that might make more sense to your average HN reader: what if all software came out of China like all hardware does? Wouldn't that concern you? I'd imagine some folks here would struggle to pivot to a new field outside of development.

>How much of the tech industry goes poof if they decide to stop exporting to the US entirely? Seems like a precarious position.

How much of china's goes puff.

Yes they are more dependent on us than we are them, but this is irrelevant and does not actually address the question at all.

It is very relevant: the fear that china would immolate to cause us harm is deterred by the same reason all the people that surround you don't pick up a knife and stab you to death. Its not in their interest.

Trade wars are reasonable tools of diplomatic negotiations, and china does break some rules that harm the interests of the U.S.

It’s a double edged sword. It is a factor that’s considered somewhat in policy but at the same time it very hard to predict and generalize such conclusions because things can also land the other way.

For example it’s possible some permutation of trade war impacted US tech in the short term yet had the long term effect of reestablishing more manufacturing in the US. This kind of thing has happened, lots of examples.

Remember, China is not a manufacturing leader simply because people are working cheaply. There is a masssive ecosystem, self-reinforcing, supporting new growth, and in general making it easy to get things built there. These elements are critical yet not fundamentally tied to wage discussions.

They have fantastic systems and infrastructure in place to make it all possible at this point, that are mostly independent of what salaries are.

I don’t mean to imply wages don’t matter, they do influence things of course. It’s just that they are a highly visible point of contention compared other extremely important enablers that are not very visible to casual observers, who may still be very vocal on these debates.

So, to encourage manufacturers in the US to build more stuff in the US, they will increase tariffs on components so that it will cost even more to build something in the US than to build it in China.

Good plan, hello Canada!

I am in the middle of starting a business around a product that will get slammed by this. I was going to import the components and have the boards built here.("Made in the USA" labels are huge for my target market.)

Assuming I am parsing all of this correctly it will end up being better for me to have the PCBs assembled into the products in China and not create jobs in the USA.

You can't use the "Made in the USA" label like that anyway. It must be all or virtually all made in the USA. At best you could label it "Made in USA from Imported Parts" or "Assembled in USA."

https://www.ftc.gov/tips-advice/business-center/guidance/com...

My intention was that the casing and PCBs would be made in the USA. The only China sourced parts would be the PCB components.(Not finalized/assembled PCBs.) As far as I know that would qualify for "Made in the USA".

You are 100% correct in this. You can call your device just fine as made in the USA even if your passives, ICs and so on come from elsewhere. The other commenters don't understand anything about electronics.

By that reasoning a frozen meal could say "made in the USA" meaning the cardboard box was made in the USA.

* Case (Plastic) - USA Origin

* PCB (Milled, Drilled, Components Soldered) - USA Origin

* Connectors - USA Origin

* Firmware - USA Origin

* PCB Components (Items affected by the tariffs) - China or Otherwise

As far as I know that would qualify as "Made in the USA" or at the minimum "Assembled in the USA". Over 75% of the components have USA origins and the final transformative step is done in the USA.

Please note that I am not trying to be deceptive in my future product's labeling.(6+ months until launch.) However, with political changes like these tariffs they are something that can basically change my stance on how I decide to source in the USA.

Who wrote that horrible document? How exactly does someone determine whether "All or virtually all" is applicable in their situation without specific values. Sure there are examples, but they are not exhaustive.

In Canada the definitions are simple and clear:

A "Product of Canada" must have its final transformation done in Canada, and at least 98% of the costs are incurred in Canada

Something "Made in Canada" is as above, except the value is 51% and includes a statement about whether imported parts were used.

> "get slammed by this..."

Wait, a second... Do you really know this? Have your supplier prices already increased? By how much on average of each imported component? What's the total increase per unit shipped?

Yeah, I'm worried because a nonprofit I'm working for recently decided to manufacture a convention badge in Ohio rather than China because it was barely economically feasible... with this tariff change it may eat too far into our donations.

Sorry to hear you're getting hit by this! I wrote the Verge piece, and would love to talk to you about how this is affecting your business plans. Drop me a line at russell@theverge.com.

You mean "assembled in the USA"?

I think 'Designed & Built in the USA' or 'Designed & Assembled in the USA' might be better nomenclature.

* assembled in the USA.

I don’t fully understand he tariffs, but wouldn’t you be subject to 25% tariff anyway if it was made in China?

Are we to infer that BOM is the big cost for you, even though you're doing all the manufacture in USA? That seems unlikely to me, based on what I've heard about electronics manufacturing.

This isn't as much about encouraging the USA to make stuff as it is about IP theft.

Can you expand on that?

> The United States today released a list of products imported from China to the US on which additional tariffs will be placed as a measure aimed at pressuring China to change its practices the US says force US companies to give up intellectual property and transfer technology. Some industries have been dropped form the list such as pharmaceuticals, while a new list has now been announced, officials told reporters this morning. This story is developing and will be further updated shortly.

> A US official speaking on background as a “senior administration official” told reporters on a short-notice phone call today that China is using state-funded companies to outbid US companies, and is intruding and stealing IP from companies.

> USTR last year launched a “Section 301” investigation into China’s practices on technology transfer and intellectual property and concluded that it has long been engaging in unfair practices. The Section 301 report found China guilty of pressuring US companies to partner with Chinese companies, licence under less favourable terms than Chinese companies, using state-funding to buy US companies in order to get ahold of their IP, and engaging in intrusion and theft to get commercial advantage.

> The United States has raised these concerns for years, and gave China the chance to take steps to resolve the concerns, the official said, but “that’s not what they did.”

http://www.ip-watch.org/2018/06/15/breaking-news-us-imposes-...

Thank you.

You realize that Democrats are supporting these tarrifs on China as well. China has already won the trade war by dumping steel and aluminum and stealing intellectual property for decades. This isn't even controversal.

Who said anything about Democrats? also last time I checked the majority of the US Government is controlled by Republicans.

I think he wanted to highlight the bi-partisan support for the action.

I think he wanted to distract away from who's responsible for this action.

Why would the comment distract? It's not a contentious issue, but the bipartisan support has less visibility because it's almost solely attributed to Trump.

Does that materially change whether or not it does or doesn't make it more expensive to build products in America that rely on Chinese components?

I can't speak specifically to these new items, but just to give an example, many auto experts came out and said the steel and aluminum tarrifs would raise car prices, but so small it's a rounding error. Typically under $100 or $200 per car.

Point being, people jump to conclusions without seeing the impact on the total cost of goods. Meanwhile dismissing the point, putting more capital into the pockets of US based companies which improves the economy.

This will eat into profits for US based electronics manufacturers, who in many cases may already be under contract for assemblies or finished products at particular price points. It will also make it even more uneconomical to manufacture electronics assemblies or finished products in the US, a business that has been drying up for years.

You can't just look at the end product, you have to see the tariffs' impact all the way down the supply chain.

The effect on the final product may be minimal but the intermediate manufacturer of, e.g., the rails that hold the car seats in place may end up having to lay off half their workforce. If the product that makes up 80% of your business has a 15% margin and now your main raw material input rises in price by 25%, you could be in serious trouble.

Because china won't retaliate? Which won't cause us to retaliate? seeing a pattern?

So let me ask you, do you think the people in charge do not know this? Do you buy into the media push that Trump is a petulant, reactive child who does not listen to advisers? Do you think our government is truly led by the whims of a single individual?

Tariffs are a political tool. There is some objective here that is not being publicly outlined because it would defeat the purpose of the strategy.

Example: Other countries involved in this "trade war" are placing tariffs specifically on bourbon. Why? What do they have to gain by that sort of rule? Absolutely nothing, other than putting political pressure on the representatives and senators from Kentucky. (Source: NPR, radio earlier this month where a representative of Canada said exactly this. I wish I could find the audio.) This is the very definition of other sovereign countries interfering with American politics. I would bet that the tariffs being placed here locally are designed to have similar effects.

I mean, I can answer those questions, but the OP comment was a critique of the policy, not the policy makers.

Yes, I understand that perhaps OP's comment might have been influenced by the policy maker, but nothing in their post makes any mention of anything beyond a simple policy critique, so this line of argumentation is, at best, putting words in their mouth.

If a policy is, to one's opinion, good or bad, then it should not matter whether or not the policy was proposed by someone we like or someone we hate, and to that end, it shouldn't matter one whit how popularly supported it is by our legislators, even where that popularity is enjoyed across partisan lines.

Arguing against a policy critique with a critique (or commendation) of the policy-makers is totally non-sequitur.

Your argument is that there's some super-intelligent strategy at work here but it must be kept secret in order for it to work.

This is literally baseless nonsense.

America has a single goal that is beyond transparent: prevent the rise of Chinese apex-technological manufacturers. Everything was okay when China was making shoes and Christmas lights but now they're fabricating increasingly sophisticated computer chips [0], producing more electronic cars than the rest of the world combined [1], and kicking out all sorts of fancy 5G telecom equipment that does more but costs significantly less than what Western manufactuers can offer [2].

The "strategy" here is too little and far too late. Trump's only victory here will be, like so many other victories, purely symbolic: his base might get riled up and support him for taking on the "Chinese" who "stole" all their jobs... but China's competitiveness here won't be affected. Cutting off Americans from China's competitive electronics will just drive up prices in America and make American companies less competitive on the global market. The rest of the world (the other 7.3 billion on the planet) absolutely love China's cheap but capable electronic products. The only thing at this point that will actually stop China's growth here is literal bombs and tanks.

[0] http://mckinseychina.com/whats-next-for-chip-makers-in-china...

[1] https://nextshark.com/china-now-makes-electric-cars-every-co...

[2] https://telecom.economictimes.indiatimes.com/news/mobile-net...

> Do you buy into the media push that Trump is a petulant, reactive child who does not listen to advisers?

Well, I have listened to him speak, so yes.

>you buy into the media push that Trump is a petulant, reactive child who does not listen to advisers?

You don't have to buy anything. Just listen to the man himself and it's crystal clear.

But how does this fix the issue and what does the Democrats supporting it have to do with that?

A family member who's been an electrical engineer for many decades made an interesting observation: the United States industrialized China. When labor got too expensive in the US, manufacturing moved overseas. Capital became available in China to build and build and build because they knew that American business wouldn't be able to resist the competitive pricing.

I still remember overhearing my engineer family member on the phone with an American supplier 15 years ago and the supplier saying "all my factories are in China - the last competitive place left!"

It's even worse. In order to do business U.S. companies had to partner with a Chinese company, and U.S. compnay willingly transfered their IP to their Chinese partner, their Chinese partner then transferred that IP to their partner. the Chinese Government, who then transferred the IP to any other Chinese company that could benefit from the IP.

That's how the U.S. supercharged China'a manufacturing while simultaneously destroying the USA's manufacturing. Also the U.S. companies never got the access to the Chinese market they sold their souls to get.

And now the same people responsible are extremely upset that someone's trying to reverse the damage.

It's absolutely bizarre how almost no one seems to realize this.

For the anti-protectionists: Can you direct me to extensive empirical evidence that protectionist policies are harmful in the medium to long term?

I often hear that Asian countries have followed protectionist policies for decades, and they seem to be doing well. Norway is also highly protectionist at least with regard to agriculture and as far as I know they have achieved their desired results. When does it work and when does it not work?

Wikipedia is always a good place to start: https://en.wikipedia.org/wiki/Protectionism#Impact

Edit: It's also worth mentioning that it is unlikely these tariffs are meant to last in the medium-to-long term. This is a trade war so knowing what's a long term strategy vs a short term tactical maneuver is intentionally obfuscated in order to maximize leverage against the opponent.

Each side is just trying to rack up bargaining chips before sitting down and coming up with comprehensive trade agreements.

Or... that's how things could work. You can never know anymore.

This wikipedia article is a lot more biased than the french version. Here, it’s clearly anti-protectionism by defending the age-old myth of "comparative advantage".

Comparative advantage is the fundamental principal of economics. It is not a myth.

Wait, I didn't realize the basic principal of comparative advantage was in doubt. I'm a bit confused by your worldview - do you think that every person should produce exactly what only they need and never trade with others? What is the purpose of trade between individuals or groups?

Except if the others countries are flooding yours with cheap goods to destroy your industry and economy.

Like I've said, the french version put at least some criticism on this neoclassical point-of-view of the perfect market: https://fr.wikipedia.org/wiki/Avantage_comparatif#Objections...

Look up Smoot-Holly.

I used to do a lot more embedded systems work. I've been 100% software lately and, looking at this list, I'm glad I started on that transition. I don't know what the exact BOM impact would have been on past projects, but it would have been rough.

I can't get over this Don Quixote-esque crusade. This just hurts American competitiveness.

That is Putin’s point. That’s why there is a lot of investment in influence of the awful sources of information used by the President.

Hopefully, when this guy is gone we look at reigning in the power of POTUS, which is clearly too strong now.

We'll see. The reason why the president has this power is congress also abused it. The ideal countermeasure for this is an educated electorate who doesn't fall for the false promises of trade barriers. As long as people buy into the lie of protectionism, there will be someone selling it.

This is insane. The ppl it is going to hurt the most are the tinkerers and innovators. As long as you assemble your completed phone / tv in China it doesn't matter. But for hackers trying to build cool stuff or develop ideas into products, they have to pay 125% more...

25% more, 125% total.

sure... price * 1.25 :) still... crazy.

You said "125% more", which is incorrect.

If you had said "125% of the price", then that would have been correct.

yes, i don't disagree. this is all beside the point though -- the tariffs will have the opposite of the desired effect though: pushing more assembly to China and making it harder for innovators in the US.

It's important to be accurate.

https://ustr.gov/about-us/policy-offices/press-office/fact-s...

"The 284 product lines being proposed will now undergo further review in a public notice and comment process, including a hearing. After completion of this process, USTR will issue a final determination on the products that would be subject to the additional duties.

USTR will provide an opportunity for the public to request exclusion of a particular product from the additional 25 percent duty. USTR will publish the details of this product exclusion process in a subsequent Federal Register notice."

Try to understand it strategically.

If there's a 25% tariff on Chinese components, it makes Japanese, Taiwanese, Korean, developing-economy players more competitive. If the tariff is projected to last it will cause a sizable diffusion toward other players. Consider also that tech goods growth is projected to continue and China wants to start fabbing silicon. China doesn't want the brakes pumped on that exponential curve.

I'm by no means a trump supporter, but let's play devil's advocate here. Suppose that China's leadership had a long term plan to build up their manufacturing base while wrecking ours. So they set up a monetary policy to keep their own wages suppressed and their goods cheap and they heavily subsidize the industries that they want to establish. American corporations go along with this since in the short term it allows them to bust their unions and reduce labor costs. And it's still US companies that own many of the Chinese factories, so from the CEO's point of view they haven't lost anything. Then years later when the job is done and the industries in question have been captured, the Chinese government kindly informs the us companies that they no long own the plants, they have been nationalized. How else could the us respond other than by its own protectionist policies?

A lot of argument against tariffs seems to assume that prices in the US will rise and stay increased permanently assuming production stays in China.

Wouldn't the downsides of tariffs actually only remain until production moves to say, Vietnam, etc.?

No. It's not that easy to move. Factories don't work in isolation. One of the major advantages of China is that all the suppliers are located very close to each other so you can get very fast turn arounds. Some people have the mistaken notion that it's only because of cheaper labor, which is only partly true. But in the area where a lot of the manufacturing is happening, Shenzhen, labor cost isn't that cheap because the cost of living has skyrocketed.

This is an old but really insightful article on why manufacturing happens in China: https://www.nytimes.com/2012/01/22/business/apple-america-an...

It's similar to why tech startups largely start in or move to Silicon Valley. It's the ecosystem of VC, pool of talent (Stanford, Berkeley, the other UCs, and tech companies), and existing large tech companies.

This all can change but not overnight.

Wendover Productions did a nice video on manufacturing in Shenzhen: https://www.youtube.com/watch?v=E7Jfrzkmzyc (Highly relevant to the big picture and issues around the tariffs)

This is similar to the the original dynamic that allowed Silicon Valley to be Silicon Valley and produce ICs, then computers, home computers and game consoles, etc.

What would the benefit be to the United States for production to shift to Vietnam? Simply to avoid it being done in China? I thought the idea was to increase domestic production.

The idea is to address China's IP theft in the tech sector, amongst other shady trade practices.

Wouldn't that lead to the same trade deficit Trump decries, and thus new sanctions?

A production move would be expensive, and presumably hasn't already happened because of cost differences between China and, say, Vietnam. You might be able to keep the cost increase down, but not non-existent.

Can anyone speculate as to how this changes the landscape with respect to Foxconn and their new electronics manufacturing presence in the United States? They do manufacture a lot of technology. What might be different after the tariff vs before for this new United States presence? Will it work just like other United States corporations or is it different because it is international with a Chinese presence?

Does this apply to small quantities imported for personal use?

Yes.

Where can I verify this? As I understand it, we already have a bunch of tariffs in the 5% range that only apply to commercial/industrial imports.

Is there a list of which American companies directly benefit from this?

[flagged]

What's more likely:

- other countries ramp up their cheap, robust manufacturing capacity to compete with China - design and prototyping moves to other high knowledge worker, high innovation countries without a 25% import tariff on Chinese tech goods

Now items will be completely assembled in China before they are imported. This will just shift even more production to China.

If we assume that this sort of thing is of short-term detriment and long-term benefit, isn't now the best possible time for it? Admitted unemployment is lower than it has been in a long time and admitted inflation is still quite low. Complaining about protectionism now and calling for it when the economy is in the crapper would be reminiscent of the Arkansas Traveler...

Of course we don't have to make those two assumptions, but they're built into common arguments for protectionism.

Surely this will just encourage closer ties between those outside the tariff area?

The idea is to get the US making their own stuff. If you can tip the scales to the point it's cheaper to make it locally, somebody will...

... Eventually. That takes a lot of time, and raises prices across the board leading to inflation and unemployment. It's a very risky roll that could easily backfire in the most spectacular way.

Not sure how long this can last. But factories need time to be built. If the tariff got repealed in less than a year, it's just net negative for US economy and nothing will be really changed.

I think generally trade war makes sense as a short time lever for something else, but may be a bad idea for long term growth .

lol you would need 800% tariffs for it to be worth it to build US factories to make these things

Wonder how Apple is taking this

EDIT: Interesting, didn't know Apple manufacturing policies until now.

Apple doesn't assemble their devices domestily. This tariff does not include complete phones. I'm sure they are perfectly fine with these tarrifs, they are a barrier for potential competitors who don't already have established supply and assembly facilities in China/Tiwaian.

They assemble Mac Pros in the US. They've also apparently been considering assembling some other stuff in the US; I assume those plans have come to a screeching halt.

Thanks for the clarification. As you say though, this will likely stop further domestic assembly operations from being established. It will be business as usual for the big players who do assembly in China, the rest will be encouraged to move them back there. In no way does this seem like it could have the intended effect.

Could this policy actually be the result of Chinese politicians and/or businesspeople engaging in pay-for-play with Trump?

Or is there another explanation for why this policy doesn’t affect certain completed products from China? I just don’t get that part of it at all.

Mac Pro is assembled in Fort Worth.

They don't manufacture devices in the US, so they should be fine.

They partnered with Flextronics to assemble the Mac Pro in Texas.

9030.40.00 Instruments and apparatus specially designed for telecommunications

Doesn't that mean iPhones will have the tariff?

Completed smartphones and TVs aren't on the list, so they aren't under this one.

Question:

What effect does domestic tax policy have on international trade, and is it a bigger or smaller factor than tariffs?

For instance, if you have very high taxes on things required for production (e.g. wages, etc.) and low taxes on consumption (e.g. sales tax, etc.) then it seems to make sense to try to produce elsewhere and import even if there is no comparative advantage and you have to pay a tariff. Does that explain the U.S. trade deficit at all?

The strategy he is following is hitting them hard and making them come to the table to actually negotiate.

The chinese have abused us for quite a long time.

So what happens with the tariff when it is collected? Does it go to subsidize the industries hit adversely by this?

This is the thing I was least looking forward to with trump. So disappointing.

I thought the normalization of Nazi principles while debasing the U.S. government was pretty bad. But electronics costing more does really suck.

I guess its harder to make a rationale that a tariff on TV's is for national security - that said, you need to return the assembly work, before you can return the component lines.

Can someone explain the motive behind something like this?

If your company relied on some sort of margin related to commodity electronic components: congratulations you were doomed anyway, this just hastens it. Let's face it, hardware is not where the money is. Hardware is a tool of software now and forever. If you can't figure out how to make the money with software to pay for the hardware then forget it! I hear Amazon is hiring again.

Just wait until China imposes tariffs to services from US headquartered companies.

A Chinese tariff would have been great policy 40 years ago. Now it is just stupid.

Sure does smack of tossing ol' Briar Rabbit into the briar patch. "Punishing" them by making their finished goods a ton more competitive by kneecapping our own industry? Wha?!

Forget Russia, should we maybe be looking into what China may have done to get this guy elected?

> Forget Russia, should we maybe be looking into what China may have done to get this guy elected?

You don't think they could be related?

It's punishment for stealing hundreds of billions of dollars of IP, illegally subsidizing businesses to steal market share, and general national security by not outsourcing knowledge and infrastructure critical to national security to save a few bucks.

It's easy to let someone push you back inch by inch instead of fighting back, but eventually you're on the edge of a cliff and have nowhere else to go.

I'd take short term pain over one day waking up and realizing that China has total control over manufacturing for everything essential for modern life and in exchange we got cheap consumer goods for a few years.

I understand the rationale, which is pretty clearly laid out here: https://ustr.gov/sites/default/files/Section%20301%20FINAL.P...

What I don't understand is the response. The burden of this cost has entirely been placed upon US businesses purchasing products from (in many cases) the only place you can buy them and then assembling the completed product in the US with US labor.

As someone doing small-scale production in the US, the simple way for me to avoid these tariffs is to have China assemble everything. Finished consumer goods have been explicitly avoided in this list. Can you explain to me how this is helping US manufacturing?

It prevents the tariff from being applied to iPhones and MacBooks.

Yes but I see your comment as a rationale for an additional tariff that covers your circumstance.

In what way would you punish China for their bad actions regarding US technology?

Sometimes doing nothing is better than doing something. In this case, doing something (a) does not harm China, as intended, as they are still the only viable place to purchase these items, yet (b) actively harms business in the United States, as we are paying the additional cost ourselves.

a multilateral action like say a non terrible version of the TPP...

> What I don't understand is the response. The burden of this cost has entirely been placed upon US businesses

I don't think that's true, which is proven by the fact that China is strongly opposed to the tariffs and plans to retaliate with their own. China's exports will go down, so it will cost them too.

If the USA goes up 25% and then China goes up 25%, then it will impact China's GDP far more than USA's. China's economy relies much more on trade with the USA than the other way around.

> The burden of this cost has entirely been placed upon US businesses

This is imho the right thing to do: on the large volume, it might make it economic enough to just build such components in the us, recreating old jobs of the now lost middle-class.

I don't know why you're being downvoted; China absolutely does all of those things. They are not playing fair in the global market and never have. One can debate whether or not the tariff is the right approach, but let's not pretend that China is a victim.

GP never said China was a victim, just that a tariff screws over US companies, not China.

Sure, I didn't mean it that way. I was referring to what I assume the down voters were thinking, but I wasn't very clear.

If manufacturing moves elsewhere and a few million already disgruntled Chinese are out of jobs, Chinese government has big problems. Their impotent threat towards the US ag industry is also laughable when we produce 40-50% of the worlds soybeans and corn. Increasing food prices for the millions of unemployed workers is surely a winning strategy

Cheap labor is plentiful, there's only one US consumer market. China has no leverage here.

Whereas the US has always played fair in the global market and never used its dollar position, tarriffs, sanction, invasions etc for market advantage?

The dollar floats in value. The Chinese manipulated their currency to make their exports cheaper for years... which worked. Only recently have they eased off on that. They also heavily subsidize shipping to make it cheap to export, make it difficult to sue anyone stealing IP, etc etc.

Sanctions in the US have been about avoiding wars, rather than trade. There are also other global reserve currencies... value of dollar was earned.

Invasions have been shady for raw materials, for sure. Chinese are getting that in smarter ways now, but building their new “Silk Road,” which is a way to ensure they get raw materials mined by Chinese labor by Chinese companies in foreign land by propping up existing corrupt officials. Basically they took a US playbook and made it “better.”

China imposes massive tarrifs on the US, subsizes the majority of its economy, and is one of the most protectionist economies in the world. No one ever said the US is perfect in all things, so I'm not sure who you're arguing with, but if you want to compare specifics on China v the US you're going to lose.

You're comparing apples and oranges. When has the US government stolen trade secrets from foreign companies and then bootstrapped new domestic companies to compete against them?

China has surely done all the things you're accusing the US of, but they aren't being punished for that.

Be careful. The US doesn’t exactly “play fair” either.

Not every single Chinese tech firm does these things. It's possible to develop a more nuanced view of China other than "China bad tariff good".

Why not investigate which firms committed which crimes and punish those specific firms? It's a smarter approach that helps our justice system and China's.

But "smarter" isn't part of this administrations playbook.

While I agree that you could find firms that have not stolen IP to make their product, trying to nail down the sanctions to individual businesses would never work. The number of entities you would need to track and audit is enormous and it's way too easy for someone to launder the information around to supposedly "good" businesses.

You're talking about the entire supply chain, so you would end up punishing firms that are otherwise innocent because unbeknownst to them they bought resisters or capacitors or silicon plates from a bad actor.

A smart approach is just not feasible at this scale.

Sure, but I don't think that's a practical solution. Also, tariffs like this aren't intended to harm individual businesses; the intent is to pressure the Chinese government, a government which directly supports and plays a role in IP theft and market manipulation. Why would the US spend an insane amount of resources to lessen the effect when the effect is exactly what they're after?

When two elephants fight, many ants die. There is no precision guided ammo in trade wars. Its brute force!

I would have downvoted for the "general national security" bit.

Everything else, sure. But national security, especially expressed like that, is just another "WON'T SOMEBODY PLEASE THINK OF THE CHILDREN".

The are subsidies everywhere. The US government subsidized the oil industry for dozens of years, same for agricultural sector and major sectors of the economy (See Great Depression). Currently, electrical vehicles are also receive subsidies in most states.

I'm not a big believer in IP (go Free software!). I find though if we have to strictly follow IP, then the US would have to pay for the use of paper and gunpowder, and many other inventions originating in China.

What I hate so much about that it assumes it's all due to Chinese secretly stealing American IP. Nope - just go to China. People are working extremely hard and industrious. There is also 1.4 billion Chinese. And while there are good American products, there are also great German-made robots and tech, Korean chips, French nuclear reactors that Chinese would rather have than American products. Focus on building better products, work hard, and it will work out.

This goes beyond subsidies. We're talking about espionage, theft, forced technology transfers, and mandatory joint ventures if you want to set up shop in China.

"if you want to set up shop in China"

That is a funny line of logic that gets thrown around a lot, considering that the advocates' stated preference is for industries to move out of China. Isn't wide dissemination "about espionage, theft, forced technology transfers, and mandatory joint ventures" enough a deterrence for companies to stop going into China? Apparently not.

> punishment for stealing hundreds of billions of dollars of IP

I feel like its more the other way round...the American IP system is overly expensive and outdated, and should be reformed instead. The repercussions of this are felt most heavily on domestic industries too.

I concur. There seems to be a common thread in entrenched entities when their hegemony erodes before their very eyes and their well worn levers of power suddenly stop bearing fruits.

It's like when someone loses their wallet, and their first instinct is to completely discount the possibility they just misplaced it, and jump straight to the conclusion that someone stole it.

Start at your only acceptable conclusion, and work backwards to construct a plausible scenario that you can parade around as the obvious culprit.

Right! If we adopted a chinese approach instead of trying to force ours on them we might actually improve intellectual property laws.

Your comment is just a giant [citation needed].

None of this is true. “IP” produced by a nominally US corporation with hundreds of offices around the world is not attributable to the US government.

This is just some super simplisitic nationalist BS masquerading as trade policy.

It would be great to move a bunch of technology/manufacturing back onshore, but that's a different conversation.

This appears to be done for political reasons: https://www.nbcnews.com/politics/white-house/trump-was-angry...

It’s not clear these tariffs will change this. It’s still in China’s interest to gate entry to their markets.

> general national security by not outsourcing knowledge and infrastructure critical to national security to save a few bucks.

That's the best argument?

ZTE was literally being used to spy en masse. maybe start there instead of "general national security".

Care to explain Canada and the EU getting tariffs?

Look at the early history of the jet engine to see how countries other than China engage in similar tactics.

I wish that congress would stop delegating authority to the executive.

There are arguments for both branches having some ability to levy tariffs.

I wish countries would sanction Trump's companies.

Canada appears to be considering it. http://thehill.com/policy/international/392281-canadian-fore...

FWIW this is exactly why Presidents are supposed to divest themselves of business interests. It is a very bad thing that foreign powers have the ability to apply leverage specifically to his private interests. He's suppose to act in the interests of Americans, but if he were to exempt Canada after they threaten to sanction the Trump organization, that would be the very definition of a conflict of interest.

That would be awesome. I'd love for other countries to not blame ALL of us, for the actions of 1 individual...and would be nice to see him throw a huge hissy fit about it on twitter.

Difficult to do legally; just because the US may be breaking WTO rules isn't license for everyone else to do it.

The WTO allows for countries that are being wronged by another country (which is breaking trade rules) to enact retribution. That is 100% legal.

The USA already did sanctions on individuals with the Magnitsky targeted sanctions of individual Russians that were deemed responsible for the accountant's death in prison.

At this point, my wish is for the supreme courts of the EU and individual countries within to all indict Trump for his various crimes, refuse him entry, and to embargo any and all of his products/services/businesses as well as those of his family members.

But, the way things are going, neither of our wishes are coming true any time soon.

You’re considered a consumer of the things this targets

Their real concern is protecting the supply side folks. Basically themselves

You should only be buying from an American supplier, even though we just spent 30 years shutting them all down

Because no one in this admin has a damn clue

Factories won’t be growing up out of the grown churning out parts in 6 mos because of this

The ignorant are shooting themselves in the foot as the ignorant do

> You should only be buying from an American supplier, even though we just spent 30 years shutting them all down

> Factories won’t be growing up out of the grown churning out parts in 6 mos because of this

If you wanted to reverse the trend of all the American suppliers getting shut down, and re-build the American manufacturing base, what actions would you take to accomplish that?

Eliminate tariffs (and non-tariff barriers) and convince manufacturers they'll stay gone. Separate health-care payments from employment. Ensure that there's an adequate supply of vocational training. Add two zeroes to housing starts everywhere the median house price exceeds three times the median income. Nothing that isn't patently obvious, in other words.

What about the (many) tariffs and unfair laws on China's side ?

Vocational training requires industry to already exist. That's a chicken and egg issue.

What's with this "rebuild the American manufacturing base" part? The US is already one of the top manufacturers in the world.

We make “a lot of” a few things

What the US lacks is an ability to spin up new manufacturing in the way China can

https://www.inc.com/glenn-leibowitz/apple-ceo-tim-cook-this-...

People that work in manufacturing in America are better described as “assemblers”

The skills to design and “ship” new manufacturing process do not exist here. A dictatorship invested in skills training, with the help of American government (there’s a paper trail in government records leading back to Reagan PAYING to export manufacturing. Not just tax breaks but giving cash money to invest in building new overseas; cause supply side demanded it. I’ll leave it to the reader to investigate under their own agency).

IMO Tesla is leading a revival here, or at least trying to. Cars and their battery/solar work is what people see them as: bleeding edge energy and manufacturing

Wall Street seems to think they’re just a car company. Which is, again IMO, what people shorting Tesla are confused about

People with a clue realize it isn’t just cars and battery pack sales alone

Then why are people in this thread so convinced they can't compete with China on components even with 25% tariffs?

> What's with this "rebuild the American manufacturing base" part? The US is already one of the top manufacturers in the world.

Maybe so, but the US's manufacturing currently isn't strong enough to balance its massive trade deficits:

https://en.wikipedia.org/wiki/List_of_the_largest_trading_pa...

As a basement hacker selling goods on Tindie this tariff schedule covers nearly every tool, consumable, and component parts I use in everything I do. My cost of business just went up by 25% today across the board.

The full schedule: https://ustr.gov/sites/default/files/enforcement/301Investig...

Example items of interest to people designing electronic goods in the US:

------------------------------------------------

8532.10.00 Fixed electrical capacitors designed for use in 50/60 Hz circuits and having a reactive power handling capacity of not less than 0.5 kvar

8532.21.00 Tantalum fixed capacitors

8532.22.00 Aluminum electrolytic fixed capacitors

8532.23.00 Ceramic dielectric fixed capacitors, single layer

8532.24.00 Ceramic dielectric fixed capacitors, multilayer

8532.25.00 Dielectric fixed capacitors of paper or plastics

8532.29.00 Fixed electrical capacitors, nesoi

8532.30.00 Variable or adjustable (pre-set) electrical capacitors

8532.90.00 Parts of electrical capacitors, fixed, variable or adjustable (pre-set)

8533.10.00 Electrical fixed carbon resistors, composition or film types

8533.21.00 Electrical fixed resistors, other than composition or film type carbon resistors, for a power handling capacity not exceeding 20 W

8533.29.00 Electrical fixed resistors, other than composition or film type carbon resistors, for a power handling capacity exceeding 20 W

8533.31.00 Electrical wirewound variable resistors, including rheostats and potentiometers, for a power handling capacity not exceeding 20 W

8533.40.40 Metal oxide resistors

8533.40.80 Electrical variable resistors, other than wirewound, including rheostats and potentiometers

8533.90.80 Other parts of electrical resistors, including rheostats and potentiometers, nesoi

8535.10.00 Fuses, for a voltage exceeding 1,000 V

8535.21.00 Automatic circuit breakers, for a voltage of less than 72.5 kV, but exceeding 1,000 V

8535.29.00 Automatic circuit breakers, for a voltage of 72.5 kV or more

8535.30.00 Isolating switches and make-and-break switches, for a voltage exceeding 1,000 V

8535.90.40 Electrical motor starters and electrical motor overload protector, for a voltage exceeding 1,000 V

8535.90.80 Electrical apparatus nesoi for switching, protecting, or making connections for electrical circuits, for a voltage exceeding 1,000 V, nesoi

8536.10.00 Fuses, for a voltage not exceeding 1,000 V

8536.20.00 Automatic circuit breakers, for a voltage not exceeding 1,000 V

8536.30.40 Electrical motor overload protectors, for a voltage not exceeding 1,000 V, nesoi

8536.41.00 Relays for switching, protecting or making connections to or in electrical circuits, for a voltage not exceeding 60 V

8536.49.00 Relays for switching, protecting or making connections to or in electrical circuits, for a voltage exceeding 60 but not exceeding 1,000 V

8536.50.40 Electrical motor starters (which are switches), for a voltage not exceeding 1,000 V

8536.50.90 Switches nesoi, for switching or making connections to or in electrical circuits, for a voltage not exceeding 1,000 V

8536.69.40 Connectors: coaxial, cylindrical multicontact, rack and panel, printed circuit, ribbon or flat cable, for a voltage not exceeding 1,000 V

8536.90.40 Electrical terminals, electrical splicers and electrical couplings, wafer probers, for a voltage not exceeding 1,000 V

8541.21.00 Transistors, other than photosensitive transistors, with a dissipation rating of less than 1 W

8541.29.00 Transistors, other than photosensitive transistors, with a dissipation rating of 1 W or more

8541.30.00 Thyristors, diacs and triacs, other than photosensitive devices

8541.40.20 Light-emitting diodes (LED's)

8541.40.70 Photosensitive transistors

8541.40.80 Photosensitive semiconductor devices nesoi, optical coupled isolators

8541.40.95 Photosensitive semiconductor devices nesoi, other

8541.50.00 Semiconductor devices other than photosensitive semiconductor devices, nesoi

8541.60.00 Mounted piezoelectric crystals

8541.90.00 Parts of diodes, transistors, similar semiconductor devices, photosensitive semiconductor devices, LED's and mounted piezoelectric crystals

8543.20.00 Electrical signal generators

8543.70.60 Electrical machines and apparatus nesoi, designed for connection to telegraphic or telephonic apparatus, instruments or networks

8543.70.80 Microwave amplifiers

8543.70.95 Touch screens without display capabilities for incorporation in apparatus having a display

8543.90.65 Printed circuit assemblies of flat panel displays other than for reception apparatus for television of heading 8528

8543.90.68 Printed circuit assemblies of electrical machines and apparatus, having individual functions, nesoi

8544.11.00 Insulated (including enameled or anodized) winding wire, of copper

8544.19.00 Insulated (including enameled or anodized) winding wire, other than of copper

8544.30.00 Insulated ignition wiring sets and other wiring sets of a kind used in vehicles, aircraft or ships

8544.49.30 Insulated electric conductors nesoi, of copper, for a voltage not exceeding 1,000V, not fitted with connectors

8544.49.90 Insulated electric conductors nesoi, not of copper, for a voltage not exceeding 1,000V, not fitted with connectors

8544.60.20 Insulated electric conductors nesoi, for a voltage exceeding 1,000 V, fitted with connectors

8544.60.40 Insulated electric conductors nesoi, of copper, for a voltage exceeding 1,000 V, not fitted with connectors

8544.70.00 Optical fiber cables made up of individually sheathed fibers

9011.10.40 Stereoscopic microscopes, provided with a means for photographing the image

9011.10.80 Stereoscopic microscopes, other than those provided with a means for photographing the image

9013.20.00 Lasers, other than laser diodes

9013.80.70 Liquid crystal and other optical flat panel displays other than for articles of heading 8528, nesoi

9014.10.70 Electrical direction finding compasses

9026.10.20 Electrical instruments and apparatus for measuring or checking the flow or level of liquids

9026.20.40 Electrical instruments and apparatus for measuring or checking the pressure of liquids or gases

9026.80.20 Electrical instruments and apparatus for measuring or checking variables of liquids or gases, nesoi

9026.90.20 Parts and accessories of electrical instruments and apparatus for measuring or checking variables of liquids or gases

9030.20.05 Oscilloscopes and oscillographs, specially designed for telecommunications

9030.33.34 Resistance measuring instruments

9030.33.38 Other instruments and apparatus, nesoi, for measuring or checking electrical voltage, current, resistance or power, without a recording device

9030.39.01 Instruments and apparatus, nesoi, for measuring or checking electrical voltage, current, resistance or power, with a recording device

9030.40.00 Instruments and apparatus specially designed for telecommunications

9030.90.68 Printed circuit assemblies, NESOI

9031.90.54 Parts & accessories of measuring & checking optical instruments & appliances of subheading 9031.41 or 9031.49.70

9031.90.59 Parts & accessories of measuring & checking optical instruments & appliances, other than test benches or profile projectors, nesoi

9031.90.91 Parts and accessories of measuring or checking instruments, appliances and machines, nesoi

9032.10.00 Automatic thermostats

9032.89.20 Automatic voltage and voltage-current regulators, designed for use in a 6, 12, or 24 V system

9032.89.40 Automatic voltage and voltage-current regulators, not designed for use in a 6, 12, or 24 V system

9032.89.60 Automatic regulating or controlling instruments and apparatus, nesoi

9032.90.21 Parts and accessories of automatic voltage and voltage-current regulators designed for use in a 6, 12, or 24 V system, nesoi

9032.90.41 Parts and accessories of automatic voltage and voltage-current regulators, not designed for use in a 6, 12, or 24 V system, nesoi

9032.90.61 Parts and accessories for automatic regulating or controlling instruments and apparatus, nesoi

9033.00.20 LEDs for backlighting of LCDs

9033.00.30 Touch screens without display capabilities for incorporation in apparatus having a display

This is the true story here. How does putting tariffs on parts that hackers/innovators use to prototype new products help the American people? If you don't have enough funding, and a large enough customer base to get your electronics manufactured offshore, you get hurt by the tariffs.

I feel like China may welcome this with open arms, bolster their own manufacturing by cutting out DIY'ers.

> How does putting tariffs on parts that hackers/innovators

Who said tariffs were supposed to help hackers / innovators? It is to protect manufacturers.

Too many examples.

It's a small fraction of the overall list. I only included those things which might be of interest to a hobbyist/startup designing and manufacturing electronics for consumer use. The point here is that the list is far-reaching and all-inclusive. If you're looking to start a business making hardware, there is almost nothing that you'd use in the design, prototyping, or manufacture of your device that _isn't_ on this list.

You can't buy these parts from US companies?

You can, but at a substantially higher multiple than 1.25x that the post-tariff rate represents.

The electronics supply chain in China is hard to comprehend how strong it is in terms of price and availability.

A lot of those aren't made in US, even if they are made by US companies.

Your cost of business does not include any labor, payments for property, taxes, etc?

His bottom line just went up in proportion to the cost of his materials. Clearly all of those things still affect his bottom line.

On a relevant note -- I hope that consumers are still willing to buy his products now that his prices must go up. It's a bummer that this is really going to stifle the small business innovation from tinkerers like the OP.

Since my prior comment was downvoted into obscurity, I’ll jump on yours and reiterate my point and ask...

What do you manufacture? Would you be interested in a startup that offered you a waiver of these tariffs?

My prior point was you will start seeing start ups pop up left and right offering “tariff free imports/importing for US manufacturers as a service”. Somehow that is controversial enough to be downvoted without a reply I’m not sure why.

> Since my prior comment was downvoted into obscurity, I’ll jump on yours and reiterate my point

Please don't hijack HN threads that way.

We detached this subthread from https://news.ycombinator.com/item?id=17320879.

Notwithstanding that explanation of a double post you quoted, I didn’t intend to highjack, my comment is about the ability for manufacturers, such as OP I replied to, being able to avoid paying tariffs on component parts which OP’s top post is specificallu about.

It also seemed relevant to mention the original comment being downvoted (without any replies) in an entire thread where no one else mentions the ability for manufacturers to avoid these types of tariffs.

I dont get how this business would work. How is the startup that I'm buying parts from avoiding the tariff themselves?

Your point to me would seem to argue that forcing companies to dig holes is good because it will create a bunch of new hole digging startups.

>Your point to me would seem to argue that forcing companies to dig holes is good because it will create a bunch of new hole digging startups.

I’m definitely not arguing that it is good, just acknowledging that’s the way the World works. Just as you acknowledge you don’t understand how to avoid the tariffs, all these comments suggest the same, but I assure you the special interests who got this legislation past have no intention of paying them.

But now when you see the inevitable “tech start up(s)” who take advantage and offer it as a service being championed as disrupters, you can laugh with me at the irony.

How on earth could a startup provide that service legally?

Step 1: create what is called in the US a foreign trade zone (internationally Free Trade Zone)

Step 2: get VC to give you funding at ridiculous valuation

Step 3: market yourself as “tech” start up, that is hacking the (new) law, and disrupting globally industry (of course said start up isn’t actually doing anything new that the manufacturing industry hasn’t always done)

Sources: I was involved in one for an e-bike manufacturer (set up right next door to a craft brewery)

https://en.m.wikipedia.org/wiki/Foreign-trade_zones_of_the_U...

https://www.cbp.gov/border-security/ports-entry/cargo-securi...

The first sentence of the 4th paragraph of your second link would seem to dispute your strategy. "Under zone procedures, the usual formal CBP entry procedures and payments of duties are not required on the foreign merchandise unless and until it enters CBP territory for domestic consumption"

So the minute your startup sells me a chip for use in the US and it then leaves the free trade zone the tariff becomes due.

by manufacturing in the US, perhaps

How does that dodge the tariffs? (Legally)

Let's say I'm Apple. I make MacPro's in Ft. Worth, Texas. The parts come from China.

I now have to pay 25% more on those parts.

However, since I'm Apple, I have manufactures making iPhones in China.

So rationally, my best bet is to shut down my US based plant in Texas and move MacPro manufacturing to one of my factories in China.

That way I legally dodge the tariffs since the finished MacPros are NOT taxed.

While this is good for China, and a net zero for Apple, it kind of sucks for the poor American workers in Texas who are now out of a job.

How is that "importing"?

Surprisingly, I'm okay with this.

Americans have been told that globalization was the key to prosperity. And yes, today we have wondrous cheap smartphones and all manner of goods made overseas.

But if you ever visit the Rust Belt, you'll quickly realize that entire local and regional economies have been shattered by the decline of US manufacturing and haven't yet recovered.

Donald Trump won the election in part by recognizing and promising to address this economic problem. This move is an attempt to do exactly that: Fix things by reversing the free trade policies that got us into this mess.

Almost everyone here seems united in saying that this attempt by Trump to cure our economic problems will only make the situation worse.

If you were the PoTuS, you want to help the Rust Belt become economically viable again, and you have both houses of Congress and the American people behind you, what would you do?

Bashing Trump's solution is all well and good, but what's the alternative? Do nothing and let the American heartland's economy rot for another 30 years?

>If you were the PoTuS, you want to help the Rust Belt, and you have both houses of Congress and the American people behind you, what would you do?

I wouldn't lie and tell people we can force the world to give a damn about American cars like it was the 1950s all over again, because the world has moved on from that economy, and thanks to automation, even if we brought the factories back, there would be few if any jobs for human beings. We can't look back, we have to look forward, and prepare for the actual future. The coal mines aren't going to open, the days of lifetime employment at the steel mill or auto plant, two cars in every garage and a chicken in every pot are dead.

Beyond that, I don't know. It's a complex problem, but failing to recognize complexity, as the President seems to, doesn't actually make it simpler.

I'm from Pittsburgh.

We're doing extremely well focusing on new industries, like healthcare and technology.

No one is going to re-open a steel mill.

Great list - industrial, mechanical, electronic equipment and finished products - they frankly should have put 100% tariffs on that or require manufacturing in US.

On the bright side, at least MAGA hats are made domestically...

https://www.huffingtonpost.com/entry/trump-made-in-america_u...

Here is the list https://ustr.gov/sites/default/files/enforcement/301Investig...

Tractors, fork lifts, agricultural equipment

Lathes

Milling Machines

LED's

Lithium batteries

Touch screen

Not a lot of electrical "tech" goods besides these three above, maybe PCB and GPS equipment.

About the tractors, milling machines, and lathe. I like this, because the new products that are available ... are chinese crap. But they are so cheaply made, and impossible to fix. Every small farmer knows you want an old one, and rebuilt. They built the Massey Ferguson 35 , which came out I think in 1955, made up until 2002 a great small 44hp tractor. You want a new small tractor, it'll come from India or China and it'll break down fast with electrical issues. Maybe not a Japanese one, however. I was asking my mechanic why we don't just start building the old ones here, they said they just can't compete. It would be great if we started making them here again. The same goes for Lathe and Milling machine, if you want a good one, you need to find "old iron" and rebuild it (if it needs it). It doesn't appear that CNC parts are on this list, so you can still buy cheap chinese CNC parts to upgrade it.

The other stuff on the list, coincidentally, I am very interested in. Basically I am getting into hemp products and wanted to, at a hobbist level, build some of these machines for personal use. Now I want to investigate if there is a market for american made agricultural machines for hemp.

I don't see a lot of "tech" on this list, might be overblown. These are things we need to make here, make them right, and of high quality.

Did you not read the list, or are you unfamiliar with electronic components? Every single component commonly found in consumer electronics is covered in that document. That includes the individual components (passives, actives, everything), the circuit boards, the wires, the power supplies, the connectors, displays, switches, fuses, sensors... everything.

that stuff is not on the list. I re-read it three times. Can you point out the cut and paste? PCB, cases, and LED for displays and touch screens,yes I did see. I guess next time you go to harbor frieght for a $900,000 industrial PCB it'll be 25% more. Better use the 20% off coupon

the stuff isn't on the list. downvote this doesn't put it on there.

That list is full of electronic components towards the end. I hear transistors are in quite a lot of things these days.

Even with the US-manufactured heavy equipment, it's a little bit of a poison pill to buy anything new. It's excessively digital, which is a big problem when you are out in the shit and break down, besides being less reliable in general. Older equipment is overwhelmingly hydraulic and relatively simple, and there's a strong market of aftermarket parts because this stuff has been around a long time and is virtually indestructible if maintained. Equipment from the 80s or 90s, and even earlier, is holding its value very well because of this. Not unlike the situation we see with previous generation MacBook Pros.

> You want a new small tractor, it'll come from India or China and it'll break down fast with electrical issues. [...] These are things we need to make here, make them right, and of high quality.

I'm definitely in agreement with this perspective and goal, but I don't know if I agree about the right way to accomplish it. In the end the problem is customers systematically choosing cheap junk over quality built to last. Trying to raise prices on junk seems like a very roundabout, heavy-handed, paternal government approach...not that I have a better solution.

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