Bunnie Weighs in on Tariffs

[Bunnie] has penned his thoughts on the new 25% tariffs coming to many goods shipped from China to the US. Living and working both in the US and China, [Bunnie] has a unique view of manufacturing and trade between the two countries. The creator of Novena and Chumby, he’s also written the definitive guide on Shenzen electronics.

All the marked items are included in the new tariffs

The new US tariffs come into effect on July 6th. We covered the issue last week, but Bunnie has gone in-depth and really illustrates how these taxes will have a terrible impact on the maker community. Components like LEDs, resistors, capacitors, and PCBs will be taxed at the new higher rate. On the flip side, Tariffs on many finished consumer goods such as cell phone will remain unchanged.

As [Bunnie] illustrates, this hurts small companies buying components. Startups buying subassemblies from China will be hit as well. Educators buying parts kits for their classes also face the tax hike. Who won’t be impacted? Companies building finished goods. If the last screw of your device is installed in China, there is no tax. If it is installed in the USA, then you’ll pay 25% more on your Bill of Materials (BOM). This incentivizes moving assembly offshore.

What will be the end result of all these changes? [Bunnie] takes a note from Brazil’s history with a look at a PC ISA network card. With DIP chips and all through-hole discrete components, it looks like a typical 80’s design. As it turns out the card was made in 1992. Brazil had similar protectionist tariffs on high-tech goods back in the 1980’s. As a result, they lagged behind the rest of the world in technology. [Bunnie] hopes these new tariffs don’t cause the same thing to happen to America.

[Thanks to [Robert] and [Christian] for sending this in]

150 thoughts on “Bunnie Weighs in on Tariffs

  1. So any idea how many jobs are lost because US companies moved assembly to China to avoid 25% tariff? I don’t think this tariff is well planned. More like just slapped on because the leader of the countries are squabbling like a pair of babies who refuses to be nice.

    1. Kind of like arguing you need a political science degree just to say one’s leader is an idiot. BTW tariff hasn’t kicked in yet so there’s no “right track” …yet.

      1. Also, you don’t have to be a chef to know what food you like.
        Or a musician to tell which tune is the most fun to listen to.
        Everybody is entitled to an opinion and being an “expert” in something doesn’t mean you are always right?
        We’ll wait for a few years and see what happens.

    2. You mean the “successful business man” who inherited vast fortunes and declared bankruptcy several times? The one who cheated on almost all his business partners? The one who dodge the draft? The one who is a tax evader? (if not show me your tax returns) The one who cheated with all of his many wives? What makes you think he is doing something for YOU? He is just making deals for his hotels at the cost of the americans (this latest tariffs are a clear example, the ZTE deal another). This orange baboon is a disgrace. You will see how bad things will go. Welcome to the third world, USA, you have become a BANANA REPUBLIC.

      1. >>The one who is a tax evader? (if not show me your tax returns)
        A) that’s not how burden of proof works B) the IRS audited at his taxes before election and didn’t find anything. You don’t -need- to see his records, it’s just the custom.

        1. “the IRS audited at his taxes before election and didn’t find anything”

          No. Trump claimed to be under audit as an excuse to not release his tax returns. There was no evidence that he actually was being audited. Nor was “I’m being audited” even a valid reason to not release the returns.

          Nor did the IRS release any such result.

    3. >>[Do you own] your own 737 with your name in gold letters on the side

      No, because that’s gauche. Save the cult worship and argue the policy.
      Tariffs are always a bad idea. You can’t fight economic globalization, tariffs are just more corporate welfare paid for by the consumer and international competitors to dying domestic industries.

      1. And when all the other countries have tariffs? How do you level that? Now, countries that subsidize exports I’m all in favor of. Suck them dry unless it destroys industry you need for security.

        1. This is why it is important to play nice with your neighbors, if you keep them on a friendly basis then you don’t have to keep asking yourself “And when all the other countries have tariffs?” and you can get on with running the country. Perhaps you should look at the history of Albania to see what happens to a country that is paranoid of its neighbors.

    4. “The economic metrics released so far, indicate America is on the right track.
      There might be some temporary pain from these tariff measures, but in the long run it will be beneficial for America.”

      This is what kills me about business people, mba’s and pseudo business people. Everyone talks about metrics and the right track as if they have any idea about what the end game is. Yet talk to any of these people any they all have different ideas of the final destination. If you cant agree on the final destination then how can you even begin to believe that anyone is on the right track and that is even before you start taking into account chaos and random events that change the course of history. The point is that we are sailing on a ship with no idea of our final destination and yet people want to say that the captain is putting us on the right course when no one aboard can agree on where we are going. so please explain to me how your supreme leader has you on the right track when he is saying that he wants to bring American manufacturing jobs back to the US yet he is enacting policies that actively encourage US companies to move manufacturing offshore.

      1. Certainly not zero. If things become more expensive, demand drops, people lose their jobs. It’s that simple. And the jobs won’t come back, because they are utterly unsustainable in a high wage country like the US.

    5. “The economic metrics released so far, indicate America is on the right track.”

      Which is just an extension of the economic performance under Obama. Actually, a little worse than the economic performance under Obama at the end of his term.

  2. There will be minimum impact to the hacker community because most parts are bought through Amazon, eBay and AliExpress. These low dollar shipments have no import duties or taxes applied – I believe imports have a $200 cutoff.

    1. If you buy through Amazon or Ali, the distributor would have had to pay the tariff to get it in the country, and they are most certainly going to be ordering far more than the cutoff. And it is quite likely they’d just pass on the cost in the form of ‘shipping and handling’ fees or just add it into the list cost.

      Some of them may decide to instead move their operations to Canada and Mexico, or just give up on supplying the US market altogether.

      1. I don’t think you understand how aliexpress works. There is no distributor, shit takes the slow boat. Amazon sellers are a mix of the same and on-shore distributors offering Prime, but since they take a 300-500% markup, the impact of a 25% tariff shouldn’t be noticeable.

    2. because this parts has been very expensive in Amazon, eBay and AliExpress. for example , i can only use $10 to buy a DSO138 in china .but it’s price in American Amazon is $20.So,only Dealer will reduce his profit。

    3. Most of the stuff I’ve ordered direct from China comes via the post marked as a “gift” with some onscure return address.
      The people this will f*** in the a** are legit American firms, employing Americans, like Adafruit and Sparkfun.
      Thanks, Trump, and your butt boys Miller and Ross. I’m going to order a new Huawei Mate 10 Pro in your honor, kiss my ass.

    1. No, you will pay exactly what you paid before because the $0.35 value is way below the cutoff and there will be no import duties or taxes. In other words, there will be ZERO IMPACT TO MOST HACKERS! And if you are importing enough to be taxed then you are probably no longer a hacker.

      1. What, so small business owners can’t be hackers?

        Looks like the only people this tariff hurts are small businesses that do some of their assembly in the US with American workers. Sounds about right.

        1. Not just assembly in the US, we have off shore assembly but buy components in China. So, we will be effected, unless they spin off and have shipments bought and shipped from the offshore to their warehouse. Not sure why we quit doing that in the first place.

      2. > In other words, there will be ZERO IMPACT TO MOST HACKERS!

        Hackers have little impact on GDP anyway.

        The consumer electronics industry, that matters a bit. Small domestic manufacturers like the ones I’ve worked for are going to hurt bad.

  3. ” I’m not calling bias” goes on to post great detail on all of Bunnie’s perceived biases.
    If you wanna call bias, call bias HaD isn’t known for people being shy with their opinions.
    Talk straight and grow up.

  4. Don’t loads of western companies source their products and have production in China? Sounds like there’s no problem of a ‘westerner’ doing business in China.
    I really disagree with your final statement. Doing nothing is not worse than doing something that will make things worse. Obviously we’ve yet to see how your tariffs will play out, but it sure seems ill advised.

  5. “As a result, they lagged behind the rest of the world in technology. ”

    One can “lag behind the rest of the world” by offshoring all their smarts as well. Don’t need a tariff for that.

    “This incentivizes moving assembly offshore.”

    “Incentives” makers to pay someone offshore to build their design for them and ship it here. Sort of an offshore maker-space.

  6. We still have a 60% tariff on almost any imported product, doesn’t matter if finished or not. That’s just federal tariff, and it’s calculated over the price of product plus shipping. Other tariffs are usually calculated over the price after federal import duties.

    A $50 item (with shipping) would cost around $110 after all duties.

    Welcome to Brazil.

    1. I ship to Brazil and there is plenty of paperwork involved. IS it true that the budget of the customs office comes from the import fees? That is lots of incentive to find every little error and interpret every item as the one wit the highest.

    1. On the “free trade” MYTH:

      https://theconservativetreehouse.com/2018/04/04/very-important-economic-confrontation-neil-cavuto-vs-larry-kudlow/

      Excerpt:

      The multinational trade and economic system, run by corporations and multinational banks, now controls the product outputs of independent nations. The free market economic system has been usurped by entities who create what is best described as ‘controlled markets’.

      The Big Club… (and you ain’t in it)

      Understanding how trillions of trade dollars influence geopolitical policy we begin to understand the three-decade global financial construct they seek to protect.

      That is, global financial exploitation of national markets.

      FOUR BASIC ELEMENTS:

      Multinational corporations purchase controlling interests in various national outputs and industries of developed industrial western nations.

      The Multinational Corporations making the purchases are underwritten by massive global financial institutions, multinational banks.

      The Multinational Banks and the Multinational Corporations then utilize lobbying interests to manipulate the internal political policy of the targeted nation state(s).

      With control over the targeted national industry or interest, the multinationals then leverage export of the national asset (exfiltration) through trade agreements structured to the benefit of lesser developed nation states – where they have previously established a proactive financial footprint.

      1. “The multinational trade and economic system, run by corporations and multinational banks, now controls the product outputs of independent nations”

        You would prefer government planned economies?

        1. We had the social market economy, Soziale Marktwirtschaft, until Schröder ruined that and Merkel finished it off. Worked nice for us, everyone, even the lower end, had a nice life and the middle class could easily get a house if they wanted. With one person in the family working.
          Now we need both adults in a family working for at least some luxury.

      2. The biggest oversight in naive lassiz-faire libertarian thinking is the plain fact that the invisible hand may fix some aspects of a market at the outset, but it does absolutely nothing to prevent early winners from capturing the system itself and rewriting it to prevent anyone from ever challenging them. Which is exactly what has happened.

    2. What’s needed is fair trade vs free trade.
      If an item is manufactured in a manner that would be consistent with following rules domestic operators must follow then there’s no tariffs
      But if worker rights ignored and environmental laws are bypassed to where you have workers putting in 15 hour days and rivers that look like something out of a Dr Seuss book than there needs to be tariffs.
      The same goes if there’s subsidies or the factory is a state run operation and thus not really subject to any taxes.

      1. > But if worker rights ignored and environmental laws

        The one(s) who’s going to decide that the rules has been broken will also abuse a system with no doubt by hyping some cases of violation on competing part and totally ignoring the same for its own part. Double standards are ruining the legal systems from the very begging of human civilization.

  7. Singapore at one time imported almost everything including fresh water, but it eventually became a petroleum based superpower. Given the lack of extradition laws and excess wealth — the island now generally acts as a shipping center for Asia, provides international money laundering services, and various proxy-intelligence schemes tapping international communications.

    We’ve reviewed incidents where a tracked GPS enabled product on loan to a local US company for evaluation — was removed and entered their local university to be reverse engineered.

    Singapore is far worse than simple China opportunists, because it includes well funded professional political con artists. However, they do not actually manufacture very many components on the island.

    @Bunnie — Your island’s dirty little secrets have been internationally known for years, and structuring is illegal in America.

  8. Can someone enlighten me? I totally understand that paying 25% more for something may be unpleasant, unpleasurable, harder on the pocket book etc. But does this really hold back an entire industry to the extent that Bunnie asserts? Blaming ISA cards still happening in the 90’s on it? If I have to pay 25% more for $4 chinese arduino clones, I don’t care. I’ll still buy them. I don’t think tariffs are meant to stop trade. They’re not even meant to punish or penalize it. Tariff is a TAX and a CONTROL, both of which are within the definition of government. There are heavy taxes on other things like alcohol and tobacco, but those taxes seem to have had little effect on whether or not people smoke and drink themselves stupid.

    1. >> I don’t think tariffs are meant to stop trade. They’re not even meant to punish or penalize it.

      They are entirely meant to protect domestic industry at the expense of international trade, which does nothing to lower the trade deficit. Barring them being part of an economic sanction. In either case tariffs are always punishment or penalties to competitors. It’s the whole reason ‘favored nation status’ is a big deal, tariffs get slashed which opens up a foreign market to the US vast spending power.

    2. No, he is probably just worried that the production run orders will slow due to perceived risk.
      Tariffs are usually enacted to try to offset competitive disadvantages, balance trade deficits, and apply political leverage.
      There are other uglier uses as well:
      https://en.wikipedia.org/wiki/Robber_baron_(industrialist)

      Trump’s team assumes it is still the 1980s, and doesn’t understand:
      1. The means of US tech production are mostly already gone
      2. The trades needed to run a factory line are mostly gone
      3. Zero-sum game theory doesn’t apply to emerging markets
      4. People now average 7 IQ points lower than in the past
      5. Corollary with #4, the attention economy is an incentive for group think bias

      1. 1. No they are not gone. Reduced maybe, but this is because of off-shoring efforts of the bean counters over the last 20 years. There are still lots of places making things – i.e. PCB assembly houses can be found in practically every US state. Source: http://www.smta.org
        2. No, look at #1. There are plenty of people who know how to run and maintain the equipment and tooling needed.
        3 – 5. Just ways to prop up #1 and 2. I’d love to see a link, especially on #4. And who cares – IQ means nothing.

        1. 1. Replaced by Robots made in China, using 90% parts shipped from China, and or simply outsourcing like everyone else in America
          2. Really? Elon Musk’s tent assembly line solution sounds well thought out to you?

          >I’d love to see a link, especially on #4.
          https://www.huffingtonpost.ca/entry/people-getting-dumber-human-intelligence-victoria-era_n_3293846
          I was mistaken: it was 14 points, and 7 points since the late 1970’s.

          >And who cares – IQ means nothing.
          America is funnier than you know

    3. ” If I have to pay 25% more for $4 chinese arduino clones, I don’t care”

      No, the issue is if you’re a company in the US and you need to buy $1 million dollars worth of components in order to make your products, now the components are probably going to cost you an additional 250,000

      So now the company needs to figure out where to get the extra $250,000, Maybe it was planning to use that money for operations or payroll.

      1. Can you give an example of the US company, the product of which has at least 20% of its price from the value of its components? AFAIK, about any US product has at least 50% of its value coming from a promotion and shit. The effect of this importation taxes will effect in raise of the prices just because companies will use it as an excuse rather than because of the real economics.

    4. Comparing national economics and the budgets of entire industries to your own mundane purchase of a single silicon widget is so silly that it seems like you’re being intentionally obtuse. Economics doesn’t compare well with the budget of a single household, no matter how much people try to use it as a metaphor.

  9. Manufacturers will always go where it is cheaper to make. Tariff on China will only move manufactures in other countries were labor is cheap, name it: India, Pakistan, Vietnam…

    U.S.A. can impose tariff on any countries both those countries will do the same on U.S.A. damaging U.S.A. economy not improving it. Mondialisation is here to stay. Isolationism is not the solution.

    1. it’s not “cheap to make”, it’s “maximize profit” It would certainly be cheaper for Rolls Royce to make cars in Vietnam or Suriname but they would receive much less profit.

    2. I believe the tariff only applies to components, not finished products. So in this case manufacturing becomes more expensive in the US if you use Chinese components, so an American company might be better off moving manufacturing to China and importing the finished products, which would not be encumbered by the tariff.

      1. Guess where most of the components are made these days. If the us were to try and start making components again it would probably take a decade to spin up production to levels to sustain finishing of USA made products

  10. The thing I’ve liked most about Hackaday was the lack of politics and trolls. I didn’t have to hear from the NPR/CNN/FOX news programmed “experts” who seem to delight in being jerks to each other as they speculate on potential misery. It might have crept in now and then in comments, but this is the first time I’ve seen that sort of garbage as a story.

    I’m disappointed Hackaday. This story did nothing to inspire, inform or elevate. Instead it is more of the doom and gloom I can get elsewhere if I wished. If you want to go the Slashdot route go ahead. We can gather elsewhere.

      1. Ok, perhaps I don’t read enough of the comments to make a statement about the level of trolling here. Typically I only read comments when the subject is of particular interest to me where perhaps a bit of sarcasm and taunting comes into play, but at least it would be on the topic of hacking not political FUD. Again, I don’t read enough comments to make a call on that in general, but at least that was my experience here.

        1. Oh, no, this is a bad one. Even worse than any post that talks about a woman doing stuff.

          I just like the idea of someone suggesting Hackaday doesn’t have trolls.

    1. I hat to be dismissive of your opinion, but I’m left with don’t let the door hit you on your ass on the way out. However threat like yours and other one must be idle ones as Hackaday hasn’t gone anywhere yet

    2. Well it would be nice to live in a world where politics and economics never touched us, but they do. Ignored problems, aren’t solved problems. just delayed solutions with lots of pain in the meantime.

  11. Has been said POTUS Trump doesn’t bother with the details of anything, and my guess a large portion of the Trumpty dumptys can’t be bothered either,meany they will never see that the Trump tariffs will not return jobs to the USA or stop the exporting some of remaining USA production to other countries.

  12. LOL, some of you here are so funny.

    I’d wager a pint that few of you have any family friends who lost jobs in the automotive, steel, manufacturing industries. Hundreds of thousands, millions of men and women lost their jobs because China started subsidizing businesses in China to expand those industries there.
    They also subsidize all of the mom and pop little manf’s with cheap/almost zero cost shipping to the US in support of this economic policy. Yes, thats one of the reasons it mind-bogglingly cheap to mail order something from halfway across the planet.
    Oh, and the forced requirement to part with your IP to setup shop in China has been a major part of how China has improved its competitiveness.
    Its hilarious to read fellow nerds complain about having to pay an extra quarter or buck for this or that gadget or IC.
    Sure, lets allow China to game the system and import through NAFTA backdoors via Mexico and Canada and continue to shaft American industries and workers. As long as I can get my arduino clone for $3 shipped to my door.
    America used to make solar panels, however now they’re pretty much non-existent. If you want a more recent example.
    America has been screwed over Wall St. for decades now. The Dems and Repubs on both sides have taken their kickbacks and pushed ‘free trade’ that isn’t really free trade for ever now. All the benefits of NAFTA, etc have never appeared, however a small segment of the population has increased its bottom line and bank accounts incredibly.
    I’ll take some of the short-term pain if that means American companies getting back into manf. and production and actually building stuff instead of providing ‘services’.
    Subsidizing China and all of our “Allies” at our expense is plain stupid.
    If the rest of the Western world wants to become fully dependent upon China, for the short-term gains, then let them. Nothing like giving China another lever over which to exert pressure.

    1. “They also subsidize all of the mom and pop little manf’s with cheap/almost zero cost shipping to the US in support of this economic policy. ”

      That’s actually just them taking advantage of international postal treaties and the ePacket service offered by the USPS. It’s not China subsidizing them, it’s *us*.

      https://www.washingtonpost.com/news/storyline/wp/2014/09/12/the-postal-service-is-losing-millions-a-year-to-help-you-buy-cheap-stuff-from-china/?utm_term=.f9790b9f36e1

      “America used to make solar panels, however now they’re pretty much non-existent. If you want a more recent example.”

      I’m sure Trump’s stance of opposing anything that doesn’t fill the pockets of fossil fuel companies will help with that.

    2. US industry lost everything in the CAD revolution. US industry was designed around Detroit automobile production. Every n years, Detroit automakers would close down their factories, throw out all of the old machinery, and install new machinery. New car models required different parts, but the machinery was designed to make a single part and no other. This came to a halt in the 1980s with GM’s embrace of computers. They bought one last line of computer controlled production machinery, and that was it. No more turnover of machinery when the model changes, just change the software. Millions lost their jobs due to this one change. The toothpaste is not going back into the tube.

      1. Oh and by the way I have personally have lost two jobs in the automotive business when my employer told me “sorry but they are not buying our stuff any more”, my mother was laid off from a Detroit supplier, I don’t show up for my high school class reunions anymore, its too depressing because many of my classmates are homeless.

    3. Well stated. I am also amazed at how many Hackaday readers are missing the obvious in regards to costs from China. People are apparently ok with a $7 clone of something that costs $40 for a quality, US made original and then not be surprised when it fails in 6 months instead of 10 years like the $40 item. Or not realize that having it shipped to the US for $1 is a scam from the Chinese government subsidizing their own shipping costs and taking advantage of an outdated US postal regulation. Yet, ask them to pay more than $7 and all of a sudden they are on a rampage.

      Alas, the general hackaday readership has no clue about professional manufacturing costs or impacts apart from what they read in biased news media, facebook, or other sources of shock and awe or clickbait streams. Regardless of which side of the political fence you sit, this isn’t new. Trump is just smart enough or dumb enough shake the waters of convention, whether wise or detrimental. Confusingly, his approval rating is 1% less than Obama’s and Clinton’s at the “second June” mark, so figure that one out. I am still kind of at a loss at where this country is headed and the only place I can get half way decent US related news is BBC.com………

    4. I hear you, where I work now just recently slowed down our own US foundry and skipped China going to Vietnam for our aluminum castings, most steel castings and fasteners come from China, surprisingly a good part of our electronics come from Canada but that just means its labeled “made in China” in French and English.

      1. And yes this is going to affect the company I work for as line items 8482.x in list 1 are for bearings and that covers some of the parts that we use, If the tariff’s stay in place then probably a lot of our manufacturing will move to our sister company in Mexico as that will raise our US cost by about 3 to 5%.

      2. @nic0mac
        As a Canadian manufacturer, one has had to _always_ prove all component origins were domestic for NAFTA exemption. Even if you added a China made charge manager IC, than the product would be subject to regular duty, taxes, and broker fees. You really _can’t_ cheat as you would lose ISO, RoHS, and ITAR documentation necessary for exemption. This also would invalidate FCC and ULC design rules regarding component lot model consistency.

        Your news people seem to be trying to divide communities, families, and investment relationships.

        It is OK not to know something, but at least try not to repeat their outright childish lies.
        https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2012/april/nafta-certificate-origin-frequently-asked-questions

        I didn’t like TPP or NAFTA either, but because it gave US manufactures (typically 100 times larger) unrestricted market influence to drive out smaller local competitors to monopolize entire markets (anti-trust law is weak up North). Many look forward to your government canceling NAFTA, as it will be interesting seeing how many jobs it costs on both sides of the border.

        Please ask if you don’t know, and don’t make up silly lies… if you are too lazy to Google something.

        1. @beaver Power, I wasn’t saying that these items were being snuck through Canada to evade tariffs, It was just a statement. We are a contract manufacturer and some of our clients are Canadian, when they need some controls added to our product they will designate the supplier (usually Canadian) and we receive the parts with all QA and function checks already done. I don’t know Canadian import/export laws but I assume that any duties are being taken care of and since most of our products are shipped to another (3rd) country for integration with their product I’m not sure how its figured out, that’s for accountants. Sorry if I made it sound like something fishy was going on.

          1. On a lighter note, I’m sure that if accountants are anything like hackers I know they are all meeting in a bar after some convention comparing lists of taxes/duties for a final product, ” Our product had 12 boarder crossings covered by 6 tariffs, 4 trade agreements and 3 different VATs to get to final assembly, who can beat that?” LOL I’m sure that can be made into a drinking game somehow….

    5. Since you only want to hear from people personally affected by globalization, I grew up in a steel town and the mill my father worked at went out of business in 2001.

      How is a 25% tariff going to make American jobs or punish China if the cost to make many of the products on the list in another country is more than 25%?

      American versions of electronic parts are typically at least double the cost of Chinese versions. Since the percentage is so low there is no incentive to switch to a different country. This just makes everything 25% more expensive to buy which is past onto US citizens as a tax by another name. I am not against taxes but I am against hiding taxes in ineffective tariffs. If this was about bringing manufacturing jobs back, the multi-billion dollars collected would go into human and durable goods capital.

      You glossed over the, this hurts US fabrication/QC facilities. Because the tax is most on components and not products, it hurts US companies that use Chinese parts but assemble and test products in the US. Many companies, and more specifically “hacker/maker” companies such as, Adafruit and Sparkfun do assembly in the US. This discourages that type of assembly because a product made with Chinese parts on US soil will have the 25% tariff on parts but Chinese parts made on Chinese soil will not. Promoting Chinese assembly is the opposite of protecting US IP.

      The don’t worry everyone buys stuff under $800 crowd direct from China is also showing another example how this hurts some US businesses. There is a type of company that adds value by providing QC, documentation, and support direct to China sales may not offer. That business would be ordering over $800 in good and using those goods to generate revenue for their (for some reason you think is a bad word) ‘services’. They then become less competitive with direct sales and have to increase the price without a value added to the customer, effectively being a sales tax.

      America business leaders actively gave up some manufacturing in the US over decades. If we want it back it is going to take decades to rebuilt the infrastructure to do so and actions that actually are aimed at rebuilding infrastructure.

      1. Yes it will hurt to some degree but this is about leveling the trade deficit, There are already tariff’s on US goods in China, Want to buy a US car in China well there’s a 20 some percent tariff on it as well as the already higher price, California raisins have a 30% tariff on them for example. Imposing our own tariffs is a way to open negotiations into getting some of the products we still produce in the US into Chinese markets on a level playing field. If China doesn’t respond then the US will be purchasing more of its goods from other countries where the trade deficit is more even.

          1. No, US companies don’t have to pay “Chinese wages”. But if the tariff’s on american goods were removed then they would have a chance to compete on the better quality and brand premium at least, even if they are higher priced. Example – GM sells a few North American cars in China despite the outrageous price but because of the tariffs they will never sell well, so instead GM partnered with some Chinese companies and most of what they sell in China is Chinese cars that look like North American cars.

        1. If you really want to “level the playing field” then you might consider the fact that US companies are burdened with the heath care costs of their employees, another way to “level the playing field” would be for the government to pay employee health expenses just like all the other countries that you want to be “level” with.

          1. Hmm, “Healthcare in China consists of both public and private medical institutions and insurance programs. About 95% of the population has at least basic health insurance coverage. Despite this, public health insurance generally only covers about half of medical costs, with the proportion lower for serious or chronic illnesses.”
            So instead of my paying a 10% co-pay I would get to pay 50% or more if we leveled this area, and the company I work for would still be paying for my health care just as a tax to the government instead of offering me a choice of 3 plans. lol

          2. So according to that article, Chinese will be healthier for 6 weeks longer then Americans, but the unhealthy Americans will live 2 years longer then a Chinese person on average. I can live with that.

        2. As a negotiating gambit, also keep tabs on Chinese expansion of their designs on the South China Sea. I will not be surprised if that comes to a halt very soon.

      2. What kind of jobs would you like to see in the USA?

        Manufacturing jobs are currently done by people making less than an acceptable USA wage offshore.

        If you want to bring those jobs back to the USA, you have two choices:

        1. Earn a Chinese salary, or
        2. MASSIVELY increase the sales price..

        …because there are no costs saved by moving it onshore. Chinese shipping costs are already massively subsidized with no tariffs.

        Offshoring is good because it temporarily benefits (cheaper products) the domestic market (which created the IP) while the offshore area slowly enters the global market (influx of cash). As the offshore area’s wages increase, as it enters the global market, the domestic market needs to focus on protecting its GDP from an equal.

        1. American factory jobs were lost to automation, not foreigners.

          “In 1909 it required 303 man-hours to make one car; in 1929 the time had been reduced to 92 man-hours”

          https://www.iww.org/history/documents/iww/unemployment_and_the_machine/6

          “The Jeep Toledo South plant needs just 13.57 employee-hours to assemble a vehicle”

          http://www.motortrend.com/news/toyota-chrysler-have-north-americas-most-efficient-plants-1859/

          Those jobs are Not Coming Back. Wake up

    6. No doubt China subsidize its industries as U.S.A. subsidize largely its argiculture. The fact is China respect OMC rules which creation was promoted by U.S.A. But now that those rules are no more in favor of U.S.A. they discard thoses rules. Like changing the football rules in the middle of the game because your loosing it. Pretexting national security to impose 25% and 10% on steel and aluminum imports to cirvumvent OMC rules is a far fecth one to say the least.

      1. Your analogy doesn’t address the opposition’s argument.
        They’re saying the football rules were changed in the middle of the game because the USA is realizing the rules MASSIVELY favored one side.

        One example someone pointed to was the US Postal system’s agreements to deliver Chinese packages for effectively nothing, while not extending the same offer to domestic packages.

        1. No, the US was responsible for setting up the rules in the first lace, and is now suddenly the oppressed one? The real security argument is that countries follow rules and avoid mercantilism and war. Out 18T economy with 4% unemployment is hardly suffering from this trade deficit.

          1. Hyperbole isn’t better than strawman.

            No one is saying USA is oppressed, just that the rules (regardless of who wrote them) favor China and China no longer compensates this imbalance with lower labor costs. In fact, USA companies have made the imbalance worse (reference postal and ebay agreements) and many argue these changes should have been made sooner.

  13. sorry about the no intended double posting to another’s comment. Journals for limited interests have always written about events that can effect that group’s activities. In that light I never will have problem with hackaday covering them,unless Hackaday appears to be rejecting calm, sane comments to posts. In world where no one can know everything there is to know about everything. Comments can be more informational that the post that spurs the comments. Near as I can tell the Trump tariffs, can’t change anything, while allowing Trump to thell his willfully ignorant supporters he is saving US jobs. Consumers will pay more for the good they now purchase; as the supply chain players, and the retailers deposit mor money into their bank accounts.

  14. The irony of course is that the TPP, which Trump backed out of signing, would have given us and our trade partners more leverage against China without even getting into a tariff fight.

    And it would have ended Canada’s tariff on American dairy products which suddenly the Trumpkins think is the most important thing ever.

    1. The TPP was a dangerous proposal negotiated outside of legal proceedings. Closed door meetings between industry heads instead of legal representatives of the countries involved is not how you write a treaty. It had all sorts of copywrong and drm clauses that would have been bad for everyone.

        1. That’s great if you don’t already have half a pie and they want to take a significant portion of your pie.
          Regardless of the exact terms of the TPP, companies don’t negotiate trade deals. They can have input, they can have a representative in the delegation, but closed door meetings with a take it or leave it resolution and no governmental option to alter things is no good. Treaties are for a country, not a few companies next quarters profits.

          A Corporatocracy is not likely to be a benevolent government. We saw whispers of it in the early 1900s and echos of it in modern Russia and China. It leads to robber barons, and plutocrats who own the mine, your house, your car, and the store you buy your groceries in using company tokens.
          There’s too much corporate influence as it is.

  15. No opinions on the tariffs, but through-hole was more common than SMT (by sales volume) until the early 90s. I was designing in the 90s and still have the trade magazines with the data. If we’re counting the number of individual electronic designs, through-hole was more common for even longer since most designs are from small and mid-sized companies that couldn’t deal with the MOQs of SMT components of the day. MOST countries outside the USA lagged these dates by five years as well.

  16. Gone also is my rather benign comment about how I dislike that Hackaday is becoming political, and my disdain for people who feel a need to troll spewing NPR/CNN/FOX garbage in effort to spread misery. Wow, seems like things are worse here than I had previously stated. Looks like I need to find a new geeky news source.

  17. Ya, there’s no freedom of speech on HaD. I read comments with the understanding that HaD already filtered out those that don’t support their reality.

    Although I don’t think anyone is surprised to hear that someone effectively living and doing business in China would dislike USA tariffs, I WAS surprised that someone who depends so heavily on the benefits of taxation would be opposed to more though. Specifically, he lives in state-funded housing for nearly nothing and uses the equivalent of food stamps. He takes pride living off of very little of his own money.

  18. Instead of tariffs, I think a more effective way to make U.S. manufacturing more viable would be to adopt a single-payer healthcare system, so that U.S. manufacturers would not (directly) bear the costs of employee health benefits, and thus would not need to pass these costs along to customers.

    Healthcare costs in the U.S. are nearly double those of most developed nations, and have been contributing to the bankrupting of U.S. companies (and cities) for years. In contrast, the majority of the developed world has government funded/subsidized healthcare, which means that foreign companies only pay for the “supplemental” healthcare costs, rather than the bulk of the healthcare costs, as many U.S. companies do.
    Not surprisingly,when U.S. manufacturers fold these increased costs into the price of their exported goods, only the most agile and automated facilities can remain competitive in foreign markets.

    https://www.pbs.org/newshour/health/health-costs-how-the-us-compares-with-other-countries
    https://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-global-perspective

    1. And where would this magical money come from to pay for your socialist concept?

      A better way would be to create a “strategic materials manufacturer” tax bracket with a very low corporate rate. There would need to be careful restriction on that (entirely US made, no foreign investment allowed, no off shore manufacturing), but it would help far more.

      1. There is no magic money. One way or another, all government funds come from taxpayers.
        In other words, healthy, self-sufficient people are (on average) always going to ultimately pay more than 100% of their own healthcare costs. This is true under any system that subsidizes those that cannot cover their own costs.

        Your proposal does have the advantage of being much simpler to administer, although the downside would be that the viability of the affected businesses would now be dependent upon IRS tax code, which changes every year.

      1. Compared to the US private health care system, the VA looks pretty good. Even the Chinese health care system is providing the Chinese people with longer healthy lives than the US system.

        1. As I answered you above, that study only gave the Chinese a healthier life by 6 weeks however Americans outlived Chinese by an average of 2 years. Personally I’d prefer to live longer.

  19. Just wanted to point out that although most discrete components and many cheaper, high volume boards and assemblies are made in China, Not many of the moderately complex ICs are manufactured here. Very very few of the analog ICs. Very few high-frequency ICs. Higher quality electrolytics are almost exclusively imported. High qualtiy LEDs are almost entirely fabbed in Korea. etc etc.

    For what it’s worth to the discussion.

    1. TI,AMD,Intel,and IBM still make a lot of complex ICs in the US in fact the actual silicon part of most X86 and PPC chips are made in the US,Israel,or Germany.
      For some reason China has not made a decent clone of an X86 or PPC chip yet either too difficult or no motivation as Mips and Arm seem to be good enough for their needs.
      Though packaging is often done in other countries since it’s labour intensive which is why you might see something like diffused in USA and made in China.
      The chip itself was made at a US fab but was sent to China for packaging.
      The packaging operation involves much lower cost hardware than the fab operation so it would be a lot easier to move it somewhere else if needed.

    2. Hah, there are tons of fabs within miles of where I am sitting producing all sorts of ICs. Pretty much anything that a company does not want china to copy will be made here or other places like Israel or Ireland.

  20. Umm, so, you buy a million dollars of stuff from ‘china’

    China can ship to

    1: the states which then costs 1.25 million dollars
    2-Russia, South Korea, Japan….who sends stuff to the states
    ..cost, 1 million dollars plus a few Hundy shipping / forwarding fees

    For trumps plan to work, needs much more than just one country to have tariffs
    Also needs co-operation of freight forwarders and intermediary countries

    After all, why pick up the phone and order a million of stuff from China when you can ask someone somewhere else to order it for you and send it in

    1. That’s not how it’s [supposed to] work. The country of origin is still China unless they falsify paperwork or perform a manufacturing process on the goods that allows them to legally claim country of origin on the *new* goods.

  21. From what I can gather, China has a pretty bad record on industrial environmental pollution in recent years. Maybe it is cleaning up its act, I don’t know, but anything like that is pretty hard when the government system is essentially corrupt. I would be happy to pay 25% extra on everything, if it was manufactured in a country that had better environmental practices (I know that pollution is also a problem in the US and Europe, nobody has a perfect record on this). Apart from lower wages, is this also one of the reasons that companies move manufacturing to China?

  22. I don’t think US electronics will need to go back to 1980s style DIP components as there are US suppliers that are state of the art and maybe more advanced than anything in China.
    But the problem is they’re nearly all industrial and aerospace contractors and are very expensive since they have not had to serve consumer space for decades.
    I good example IBM and Honeywell still manufacture circuit boards in the US but they’re for things like super computers and aircraft.
    They may step up and supply low cost components again but they will probably do so by opening up factories in Latin America and or places in Asia like India or Thailand.

  23. I think they will eventually get tired of eating diodes and old Nokia batteries.
    Fix the subsidized shipping the USPS does and then revisit the tariff feud in 5 years.
    Secure our R1 institutions against corporate espionage.
    End open source projects.

    1. +1 @ End open source projects

      Also, end government transparency, why should the people be able to read the law? I never feel that need. Before you know it the Chinese will copy our laws

  24. What is the point of trying to predict how the market will actually adapt to the changes when you can’t change a thing and you just make your risk of looking like a fool (for getting it wrong) become greater than 100%. This is just Bunnie being political. As I pointed out the other day, there is a price/volume sweet spot that may have shifted, but good luck trying to predict exactly what that shift will be and what its impact on the end consumer will really be.

  25. They should have gone the other direction and applied the higher tax to finished products but not to inputs and components. Encouraged manufacturers to move back to the USA (or at least out of China into a country not targeted by the tariffs).

    1. I agree wirh this statement. But I’m still glad to see that the tariff genie is out of the bottle/lamp. He ain’t. going back anytime soon either. Here’s to hoping that the rules are tweaked to target finished goods and not to raw materials and inputs to production processes.

  26. From what I gather from most of these comments, America is completely dependant on imported materials, and can no longer produce our own. We got lazy, and willing to accept cheaper stuff, we can just chuck into a landfill, and replace, rather than repair, since warranty work, or replacement is pretty much non-existent. Tough to fight for satisfaction from a company on the other side of the world. So, if we are unwilling, or unable to step-up, and go back to work, what happens when these other countries decide to raise their prices/profits? Wouldn’t we have little to know choice to pay the price they set for us, which we will gladly pay, since there is no other option, other than to do without.

    This problem started a long time ago, and we let it happen, we enjoyed it. Instead of putting our hard earned dollars back into our own economy, we kept sending out to support other economies around the world. I doubt we are going to see much a turn-around, people don’t like to work, and we like everything handed to us cheap or free. Parties are fun, but eventually it ends, and usually a mess to clean up, things need to be repaired or replaced, sometimes more expensive than expected.

  27. These tarifs are pretty harmful. You may not realise this if you’re not in the manufacturing business. Here’s my example:

    I work for a small startup in which we do automation and make small manufacturing machines. We make our machines in the US, with only the motors coming from China. Sheet metal comes from NJ, machined components comes from PA, electronics from VA, assembly happens in NY.

    My sheet metal DOUBLED the price last month. My machined components went up by 2.5X as well, why? Because the AMERICAN metal suppliers started speculating with metal prices. They are raising their prices (needlessly) as they try to understand what the new cost of imported metals will be. My sheet metal guy was telling me that previous metal quotes we’re good for 30 days, but now they’re just good for the day. No way to plan production that way (and notice that, as of June, the tarifs have not yet come into action). So he has had to bump his prices to absorb this variability and higher cost. The machine shops have similar stories.

    And i haven’t even talked about my motors yet. They’re $250 a pop and I’m bringing whole shipments of them. I will see a nasty invoice when they get past customs. All in all, my COGs are going up almost double.

    Who’s gonna pay? My customers: American small and medium businesses. I’m going to have to raise my price to cope with these crazy raise in costs. I may actually see my sales drop. Will all of us be able to keep our jobs? Not trying to be dramatic, but I know my company’s finances and how much we depend on each sale to keep the boat floating.

    So this is not just about your $0.25 imported LED going up a couple of cents due to tarifs. US made products are already going up, and will continue to do so until the market settles at a higher price point.

    It will affect everyone, you’ll see it hit you one way or another. I wished they had been more strategic about this.

  28. The entire world needs to rethink globalization and free trade as a whole. They have been nothing but dismal failures for most. Sold to Americans and the world as the ethical and right thing to do by the bushes and clinton; the liars in chief . Only the corporations and the fat cats on Wall street benefited from it. The rest not so much. Sure some were lifted out of poverty in some countries but only so long as the fat cats maximized profits.

    Globalization and free trade was engineered from the get go to maximize profits for the rich, if some of the poor managed to benefit from, their benefit is only a temporary side effect of that optimization.

    This is so much bigger than getting upset over LEDs getting a bit more expensive, or because schools won’t be able to afford some shit*y robots from China.

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