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Blaming this USA plant's closing on Trump's tariffs is a lie.
Element Electronics company is obviously lying.
If the USA levies tariffs upon components, I would suppose and expect we would do so upon similar imported components and finished products from all foreign nations. USA producers are at disadvantages to cheaper foreign labor, but they're at lesser rather than greater disadvantages due to such USA levied tariffs.
I don't doubt that the tariffs will to some extent reduce USA sales of the finished products. We all benefit from cheaper imports, but they don't fully compensate for USA's chronic annual trade deficits consequential reduction of our GDP and net numbers of jobs.
I'm among the proponents of the improved unilateral trade policy concept as described in Wikipedia's “Import Certificates” article. It is superior to pure free trade, tariffs, or any other trade policy we're aware of.
The electronics company likely operates on thin margins given it's point of the industry. When the moron-in-chief slaps something like the 25% tariff on things he's throwing around, that's a large chunk of their margins depending on how many imported parts they use.
These days, outside of stuff like Apple, electronics are dirt cheap.
If you don't like the trade deficit, vote with your dollars. Using tariffs in this manner, simply stupid policy.
Last edited by LordSquidworth; 08-08-2018 at 06:55 AM..
I would even go further and state that there is virtually no proof whatsoever to the OPs assertion. Tariffs don't help companies that work on thin margins; especially when they are competing against companies in Asia that make the same products. Hell, I ended up folding a growing electronics manufacturing arm of my own consulting company because I couldn't compete with foreign manufacturers. And at the time, there were no trade tariffs or other financial disincentives involved. Because of the cost of doing business, my margins were so thin that I made little profit, but local purchasers thought we were gouging them and wouldn't purchase our 'American made' products. That's when I discovered the 'Buy American' line is pure political BS. People should consider their own margins when it comes to survival.
Last edited by MichiganGreg; 08-08-2018 at 08:14 AM..
Per the company's notice, the plant closure is temporary pending the results of the petition to exclude their parts from the tariffs.
Quote:
As we are the only USA assembler of televisions, we believe the inclusion of our parts on the list of affected products is accidental and resolvable. Element is working hard to have our parts removed from the tariff list and we remain hopeful that the closure of our South Carolina factory will be avoided.
It was predictable that tariffs on flat-panel screens would have a major effect on many things, TV's, computers, phones, etc. There is reportedly a 10 to 20 percent margin on the TVs. The decision to cease manufacture comes when the margins fall below safe or acceptable levels even if they can eke out a profit.
It is already hitting Japan which exports many products to the US via China. Their economy is back in recession.
lchoro, MichiganGreg, LordSquidworth, due to the facts:
USA tariffs upon both the components and the finished products reduce USA producers of components and/or finished products price disadvantages in comparison to imports, and they consequentially do not reduce or increase comparative advantages among USA producers, the tariffs decrease USA producers comparative disadvantages to imported products;
(i.e. they are of net benefit to USA producers of both the components and/or the finished products).
Quote:
Originally Posted by Supposn
... If the USA levies tariffs upon components, I would suppose and expect we would do so upon similar imported components and finished products from all foreign nations. USA producers are at disadvantages to cheaper foreign labor, but they're at lesser rather than greater disadvantages due to such USA levied tariffs. ...
lchoro, if your statement's correct,
Quote:
Originally Posted by lchoro
Per the company's notice, the plant closure is temporary pending the results of the petition to exclude their parts from the tariffs. ...
Element Electronics is trying to extort profits additional to their products consequentially improved price comparison to imports due to the USA tariffs. I would hope that the Trump administration and the U.S. Congress do not submit to Element Electronic's blatant extortion attempt.
lchoro, MichiganGreg, LordSquidworth, due to the facts:
USA tariffs upon both the components and the finished products reduce USA producers of components and/or finished products price disadvantages in comparison to imports, and they consequentially do not reduce or increase comparative advantages among USA producers, the tariffs decrease USA producers comparative disadvantages to imported products;
(i.e. they are of net benefit to USA producers of both the components and/or the finished products).
lchoro, if your statement's correct,Element Electronics is trying to extort profits additional to their products consequentially improved price comparison to imports due to the USA tariffs. I would hope that the Trump administration and the U.S. Congress do not submit to Element Electronic's blatant extortion attempt.
Respectfully, Supposn
That's all well and good, but what isn't mentioned here is the fact that vital and key components of the target 'competitive finished products' are not, nor ever have been, made in the USA. By extension, it would be impossible for domestic TV manufacturers, reliant on foreign display components, to compete with foreign manufacturers for similar products, based on the same components due to
a) the disproportionate cost of labor here in the US, and
b) the increased cost of the display component to US manufacturers due to tariffs.
Even if the tariffs on the display component totally offset the tariffs on the incoming finished product from the foreign manufacturer, the foreign companies still have the advantage due to item a).
Now, if the US company automated the manufacture of the TV and eliminated all the burden and labor during the production stage of the item, yes there would be parity. But is that the reason for tariffs? To eliminate jobs?
To be fair, they probably have to maintain a certain margin of profitability to satisfy their lenders and other creditors, including their Asian suppliers.
lchoro, MichiganGreg, LordSquidworth, due to the facts:
USA tariffs upon both the components and the finished products reduce USA producers of components and/or finished products price disadvantages in comparison to imports, and they consequentially do not reduce or increase comparative advantages among USA producers, the tariffs decrease USA producers comparative disadvantages to imported products;
(i.e. they are of net benefit to USA producers of both the components and/or the finished products).
You don't understand what you're yammering on about. That's plain as day.
That's all well and good, but what isn't mentioned here is the fact that vital and key components of the target 'competitive finished products' are not, nor ever have been, made in the USA. By extension, it would be impossible for domestic TV manufacturers, reliant on foreign display components, to compete with foreign manufacturers for similar products, based on the same components due to
a) the disproportionate cost of labor here in the US, and
b) the increased cost of the display component to US manufacturers due to tariffs.
Even if the tariffs on the display component totally offset the tariffs on the incoming finished product from the foreign manufacturer, the foreign companies still have the advantage due to item a).
Now, if the US company automated the manufacture of the TV and eliminated all the burden and labor during the production stage of the item, yes there would be parity. But is that the reason for tariffs? To eliminate jobs?
MichiganGreg, the prices of USA assembled finished products reflect the cost of USA labor and any USA tariffs levied upon its imported components.
The prices of imported components or finished goods reflect the costs of cheaper foreign labor and any USA tariffs levied upon imported components. or entire finished products.
Thus due to the tariffs, Element Electronics USA produced products' price comparisons to imported finished products within USA marketplaces has been improved.
If any USA enterprise competes with imported components in USA marketplaces, their price comparisons to imported components will be similarly improved.
Those are the reasons for tariffs.
If currently some components are not being produced in the USA, due to the tariffs some USA enterprise may now be able to become a USA producer of such components. That's another reason for tariffs.
For these reasons, I'm opposed to granting Element Electronics waivers' of tariffs upon their imported components.
I'm among the proponents of the improved unilateral trade policy concept as described in Wikipedia's “Import Certificates” article. It is superior to pure free trade, tariffs, or any other trade policy we're aware of. The policy would significantly reduce (if not entirely eliminate) USA's chronic annual trade deficits of goods while increasing our GDP and numbers of jobs more than otherwise.
Google Wikipedia's “Import Certificates” article.
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