I hope there are positive economic and environmental results from this move.
What will be the unintended consequences I wonder?
Stopping the subsidies won't stop the differences in volume and optimization (but it can be argued that subsidies no longer make any sense).
First, it's not necessarily the case that these ships are traveling in direct A → B → A... routes, they could be going from China to the US to South America then back to China, carrying some proportion of finished goods and raw materials along each leg.
Second, having to fill up the containers with something at the origin, and unload all that something at the destination, are both huge logistics efforts to manage. Not at all 'free'.
Small businesses who use dropshipping direct from Chinese companies will stop being able to compete with big businesses who buy in bulk and ship from US warehouses. This will benefit the likes of Amazon more than anyone else.
Not sure if that's an unintended consequence though.
A _huge_ chunk of Amazon is low effort Chinese clone / drop shipped crap or straight up forgery. I don't feel sorry for /r/entrepreneur denizens' loss.
It will help the kind of small business with core competencies revolving around producing things and hurt the kind of small business with core competencies revolving around buying things on Alibaba and selling them on Amazon.
People who actually wanted to do things well often couldn't even afford to ship their product for the entire price of product + shipping for lots of dropshipped things under the old ways. I'm happy that the class of business that monetizes outdated shipping policy are going away.
You think intermediaries (e.g. dropshippers) can't add value to a supply chain? I don't know why you'd be so uncaring about /r/entrepreneurs when these are generally just people trying to get by as best they can. Having said that, this treaty withdrawal is still a good idea.
You think intermediaries (e.g. dropshippers)
can't add value to a supply chain?
I don't see what value an extra intermediary adds in that situation?
they also cut out other middlemen like wholesellers and brick-and-mortar retailers. Done well, and at scale, this could be one of the more serious thrats for Amazon in the future.
Yes, it's pretty standard to find the same company with store-fronts on AliExpress, Ebay and Amazon. It's sometimes worth checking for differences in prices though due to lag in updating each catalogue.
E.g. if a dropshipper is selling mobile phone covers at scale, and stops using supplier x because the poor quality is affecting the dropshipper's brand, this puts more pressure on the supplier than if individual end-users stopped buying their products. Same applies to all brokers. They glean great power over suppliers in this fashion, while improving the experience for end-users (prime example: Amazon).
can being the operative word. Amazon, New Egg, WalMart et al. opening themselves up to a certain sort of very low effort intermediaries sucks quality out of their platforms and makes online shopping a minefield of avoiding knockoffs (sometimes with Amazon impossible, to the extent where there are certain things you just shouldn't buy) and fake or paid-for reviews.
Fixing artificially low shipping won't kill this sort of behavior but it will make it easier and more profitable to compete against.
Trump should focus on putting more money in our pockets rather than making things more expensive and hoping the pipe dream of any manufacturing is coming back to US is a reality.
Also, if you're really buying clothes from China for $1-$5 you're almost certainly supporting child labor.
I walk to work, so I don't want to subsidize your commute or travel by roads, and I don't fly often so I'd rather not subsidize the FAA as well.
I agree that we shouldn't pretend that we can make everything domestically--but we also cannot allow our economy and basic goods--by virtue of subsidies, no less--to atrophy while we become dependent on the parasitic influence of the PRC. China is not a free country, they are a aggressive totalitarian regime and it is a shame that the US will soon be 100% dependent on them for every good we buy.
Well its a 144 year old treaty so probably Ulysses S. Grant and the 43rd Congress.
As a consumer I think it's advantageous. I'd much prefer to pay no shipping when compared to paying significant amounts for shipping, regardless of where the package originates.
This kinda reminds me of the conversation I had with my brother in law regarding the likes of SingAir, Emirates, and Qatar and just how much better they are when compared to US carriers that charge more on the same route despite providing an inferior product comparatively. He started on about how those air carriers are government subsidised, it's not fair, and I shouldn't be flying with them because of that. I told him I didn't care about the underlying business model, I want new aircraft, well trained staff, good quality food as well as service. Every one of those government subsidised carriers over deliver on every one of those metrics when compared to their US equivalents.
Sure, some people will take a stand because they feel the need to do so. But in general I don't believe most people care how their goods and services are subsidised, only that they believe they've received a better deal when compared to similar offerings from other providers.
For the person you’re replying to, it seems clear that the most important thing about the word “cost” is how much they personally pay — third parties are irrelevant.
“Sound”. “Cost”. The meanings of words are not as precisely identical as our subjective feelings tell us.
The US subsidises gasoline quite aggressively when compared to other countries around the world. You can see this in fuel costs; routinely US gasoline used to be cheaper by the gallon than Australian gasoline was by the litre. I've never once heard an American complain that their fuel is too cheap despite the fact that their taxes and government are directly responsible for said low cost.
So sure, people living in the US are paying those costs "as a whole", but you don't pay any additional cost when you order a package.
It's like how driving on public roads is free, in the common sense of the word, even though of course the costs are still "paid" somehow, by somebody.
Given that the USPS is a government established and run service, thus backed by the USG in terms of its liabilities, the idea that somehow the USPS is "saving" this health benefit money somewhere is ludicrous.
It's just as stupid as the SS "trust fund" and "lockbox", which is nothing more than a paper shuffle of US treasuries from one drawer in a filing cabinet to another.
I agree about the mess of the social security paper shuffle though
https://www.politifact.com/georgia/statements/2013/jul/24/am... http://fortune.com/2015/03/27/us-postal-service/
I don't know how unintended, but I would imagine that cost of imported goods will go up, since the costs are usually passed onto the consumer
As the article states, there are also businesses who rely on these rates for their inventory or materials. Those businesses will also get impacted, and the extra cost will likely be passed down to consumers. Stuff on Amazon might not be so cheap anymore