The Axiom, "Free Trade Benefits All" does not hold up in today's world. It has to be "Fair Trade". The case for permanent Import Duties on China

[SKEP + 229]

FREE TRADE WITHOUT FAIR TRADE IS MEANINGLESS

Its like OPEC Production cuts .  .  Everyone talks a big game but nobody complies.

Its like NATO . .  . Europe loves NATO as long as US pays for it, does the fighting for it and sacrifices the soldiers lives for it.

In case you haven't noticed China is at war with the US. It has been so for 20 or 30 years.  It's an economic war and the Chinese are winning.  The US has folded up until now.  Up until Trump.

The globalisation of manufacturing has decimated US manufacturing.  US companies have moved manufacturing to China for two reasons (1) cheap slave wage labor and (2) avoid paying any corporate income tax.  

Corporations are lured by the promise of access to a billion consumers . . . but they pay a steep price. Any free access to their consumers is but a temporary accommodation that will ultimately go away.

China (1) subsidizes manufacturing, (2) predatory pricing (3) dumping product (4) forced technology transfer (5) steals proprietary technology secrets (6) China's Belt and Road.  

There are trade inequalities all over the world .  .  .  .  but China's action are downright abusive .  .  beyond the pale. They violate WTO rules with impunity.

US companies are all too willing to cooperate. But .  .  .  are the Nike and Apple's of the world really US companies or are they "soldiers of fortune". They don't manufacture in US. They don't pay any ( or very little) Corporate Income Tax in US. 

Transfer Payments / Tax Avoidance

A previous poster said Nike manufactures $200 Air Jordans for $6 in China.  Here's how it works. An overly simplified explanation.

Example # 1

If Nike ships the $6 Jordans to US and sells them to a retailer for $100 they have $94 profit X 20% tax.  Nike pays $k US Corp Inc tax and nets $71.20 after tax. 

HERE IS HOW IT REALLY WORKS

Example # 2

Nike sells the $6 Jordans to "Nike Trading" wholely owned subsidiary incorporated in a NO TAX country like Bermuda, Cayman Islands, etc. Nike Trading sells the Jordans to Nike USA for $100.  The tax free sub, Nike Trading, makes $94 profit. Nike USA sells to US retailer for $100 .  .  . So no US profit and thus $0.00 US income tax ( example #1 $18.80 US tax paid). Nike profit after tax is $94 vs. $71.20 a big difference.

Example # 3 

Now if you apply 10% tariff on the $100 transfer price from Nike Trading selling  to Nike USA , Nike now pays $10 tariff negating over half of their benefit from avoiding the US 20℅ income tax by moving manufacturing Offshore. and using Transfer Pricing.

The lesson is in the #3 scenario if you mfg in China and want to avoid US Income Tax using transfer pricing from an offshore tax haven you will now have to pay the tariff on the full high transfer price

If you think Nike doesn't care about taking10% off both their US Revenue and Profits you're nuts.

That will affect future decisions by Nike and any other company that mfgs in China and sells to US consumers. IMPORTANT: Nike could move their headquarters out of US but they can't move US consumers.

Maybe they and others should have a serious sit down with Chinese officials.

Nike LTD China is not a US company.  US owes them nothing.  It's a shell to avoid US taxes and pay slave wages.  I don't blame them.  But don't cry to US about tariffs.  Complain to your country of incorporation, the Chinese Communist Party.  Tell them to sign a deal. You can always move to Vietnam.

Import Duties the Great Equalizer

the point of this exercise is that Chinese based manufacturers thru transfer pricing minimize or eliminate paying US Corp Income Tax  .  .  .  but when new tariffs apply they maximize the cost of paying tariff.

FIRST, understand the primary objective is to have China play fair, not to get multinational companies to pay US Corp Income Taxes. You're not gonna change that. Can't control that. 

While US can't and doesn't want to compete with China on wages, as factory automation advances less and less manufacturing costs will be attributed to manual labor.  All else being equal US has a manufacturing future.

The primary US concern  is China's egregious violations of international trade regulations (6 listed above) including mandatory technology transfer and theft of intellectual property. China has been allowed by Clinton, Bush and Obama to violate regulations unabated.

US Tariffs will reduce the top line (revenue) and the bottom line (profit) by the amount of the tariffs on all US sales per example above.  

Manufacturers can move operations anywhere in the world . . . but they can't move US consumer. 

Already we're seeing the anti-tariff gang scare tactics , the talking up increased consumer prices. No increase so far. If Apple increases iPhone price they will lose marketshare, buy a Samsung Galaxy.

 Apple recently moved the Mac Pro mfg to China because they said they could not get a screw they needed in the US fast enough. Then they built a mega factory in India after India threatened to put a tariff on iPhones. Good for India. 

Do Nike and Apple stop manufacturing in China. No, they will sell to Chinese Markets .  But (1) they and others may put pressure on China to sign a deal (2) It will affect all future new manufacturing facility decisions.  Actually Nike has already moved some mfg to Vietnam. 

Plus, that 10% Revenue reduction from the tariff on US sales (the largest Consumer Country by far) will sting quite  a bit. It would hurt their share price. Ouch !

Manufacturers are already starting to leave China as a result of possible tariffs. This exodus will accelerate as the tariffs continue or become permanent. All future manufacturing facilities will take the US Tariffs into consideration. As factory automation advances manufacturing in a stable US comsumer economy becomes a realistic option. 

Anyone that thinks the Trump tariffs are not a big deal to China is clueless.  The tariffs 10% and 25% are effective.  They are very important to companies that manufacture in China that want to sell to US consumers.. They will halt China's design on world economic dominance. The mfg might go anywhere or maybe Mexico or Canada. 

Winning doesn't mean all manufacturing comes back to US.

Winning means manufacturing goes anywhere but China. 

Some countries already have tariffs, Value added taxes or subsidised industries that protect their companies.  Free trade only works when all play by the rules. France has subsidies for Airbus. Germany tariffs on imported cars. Add Japan and South Korea to the list.  Apparently WTO TRADE RULES are only ment for US. 

The beauty of Trump Tariff Strategy is it is simple, effective and easy to implement.

Trump could have let China slide on the trade issues and they would immediately have rewarded him by (1) letting North Korea sign a No-Nuke agreement and (2) purchasing tons of soybeans.  This would have measurably increased his odds of re-election. Clinton, Bush and Obama would take that deal. If Biden elected he'll take that deal. But its not good for US. Give Trump the thin skinned, arrogant, bombastic megalomaniac some credit for standing his ground.

Should US do Nothing ? Just sit there and take it ? No. 

China Economic Hegemony has to be put in check. 

Anyone have a better plan ?

Tariffs will work.  Tariffs are working. 

When Trump says, " I'm perfectly happy just keeping the tariffs" he is not kidding. 

The BEST OUTCOME for all parties is a fair trade deal.  But if China doesn't want to negotiate in good faith . .   . Trump's tariffs are a great alternative.

I always agreed and supported free trade. But when you dig a little deeper and realize the US is the only one playing by the rules it changes your perspective.

ITS NOT ABOUT AVOIDING US CORPORATE INCOME TAXES.

ITS ABOUT CHINA OBEYING INTERNATIONAL TRADE LAW .  .  .  .  ITS ABOUT PUTTING CHINA'S COMMUNIST PARTY ECONOMIC HEGEMONY IN CHECK.

US needs to win the economic war , so there won't be a military war.

China (and Russia) are going around the world being antagonist to US policy efforts.  We don't owe them anything. 

Losing some soybean sales is nothing compared to what we will lose by sitting idle. 

More important to US security than the $Trillions spent by the US Defense Dept is a strong US Economy. 

Without Russia's oil and gas they are a third world economy (with Nukes).

China is an economic force that needs to be watched. 

All fair trade efforts with China will be for naught if Biden gets elected.  China has the goods on Joe. His son Hunter made killing on some shady deals ($1.5 Billion) when his father was VP. Talk about foreign influence on a US politician. 

Does anyone know if Biden has been asked, during recent Dem debates, about his son's financial dealings with China and Ukraine while he was VP.

 

Edited August 10, 2019 by SKEP

[Meredith Poor + 883]

"In case you haven't noticed China is at war with the US.  It's an economic war and [no one is] winning.  The US [makes the high tech goods like processor chips and aircraft, as well as soybeans and meat products people trust. The Chinese make batteries, assemble cell phones (from US parts), and lots and lots of appliances and furniture that can be made by high school graduates].  Up until Trump" 

[Meredith Poor + 883]

"Nike sells the $6 Jordans to "Nike Trading" wholely owned subsidiary incorporated in a NO TAX country like Bermuda, Cayman Islands, etc. Nike Trading sells the Jordans to Nike USA for $100.  The tax free sub makes $94 profit. Nike USA sells to US retailer for $100 .  .  . So no IS profit and $0.00 US income tax " Meaning that we need to start a trade war with Bermuda and the Cayman Islands.

Are we focusing on China's misbehavior when we should be focusing on Nike's misbehavior?

[Jan van Eck + 7,558]

21 minutes ago, Meredith Poor said:

Are we focusing on China's misbehavior when we should be focusing on Nike's misbehavior?

Although the use of "Nike" is a generalized stand-in, and with the caveat that there is no evidence presented that the actual Nike Corp. is engaging in these third-country shenanigans, nonetheless the suggestion by Meredith that the corporation is engaging in misbehaviour is accurate.  What these corporate managers are doing is taking the position that anybody who pays US taxes is a fool.  So (very expensive) accountants et al are hired specifically to figure out ways to avoid paying taxes - thus undermining the US Treasury and US economic health, but advancing their own individual interests.  To illustrate, GE Capital pays its tax attorneys a salary of $1 million a year specifically to figure out ways to make sure that GE pays nothing in taxes.  Instead of simply paying the attributed tax and hiring competent engineers and managers, you get this distortion of corporate aims and focus to avoid taxes.  Huge amounts of corporate management effort goes into this avoidance behaviour inside the USA.  It is a logical result of Byzantine tax laws, but it is also destructive of the US Treasury. 

The country is better off if Nike and GE pay their tax bills.  That said, the country is also better off if both concentrate their manufacturing inside the USA in the first place. 

[Danlxyz + 62]

I don't see anything wrong with a small, maybe 5% to 10% tariff on all imports. After all items produced incountry  mean jobs for workers. This allows them to develop the skill set to advance in society much better than unemployment would.  The argument for no tariffs is that everyone can get lots of low priced stuff. Just this week i bought a set of tin snips which were made in China for only $6!

As far as taxes, companies take advantage of the rules and do their best to minimize taxes.  It is legal to do this.  The solution is to change the tax law.  Maybe disallow any expenses to interconnected companies when determining taxable income.

My suggestion is to replace the income tax with a 20% gross receipts tax on all goods and services. It would be much simpler.

[SKEP + 229]

On 8/4/2019 at 10:02 AM, Jan van Eck said:

Although the use of "Nike" is a generalized stand-in, and with the caveat that there is no evidence presented that the actual Nike Corp. is engaging in these third-country shenanigans, nonetheless the suggestion by Meredith that the corporation is engaging in misbehaviour is accurate.  What these corporate managers are doing is taking the position that anybody who pays US taxes is a fool.  So (very expensive) accountants et al are hired specifically to figure out ways to avoid paying taxes - thus undermining the US Treasury and US economic health, but advancing their own individual interests.  To illustrate, GE Capital pays its tax attorneys a salary of $1 million a year specifically to figure out ways to make sure that GE pays nothing in taxes.  Instead of simply paying the attributed tax and hiring competent engineers and managers, you get this distortion of corporate aims and focus to avoid taxes.  Huge amounts of corporate management effort goes into this avoidance behaviour inside the USA.  It is a logical result of Byzantine tax laws, but it is also destructive of the US Treasury. 

The country is better off if Nike and GE pay their tax bills.  That said, the country is also better off if both concentrate their manufacturing inside the USA in the first place. 

US has no control over Bermuda or Cayman tax rate laws

US has no Control over Nike or Apple international subsidiaries. 

You say, " No proof Nike. .  .  .  engaging these shenanigans". THEY ALL DO IT.

ALSO, ITS NOT THE TAX EVASION THE US SHOULD BE MOST CONCERNED ABOUT.  

ITS THE NUMEROUS INTERNATIONAL TRADE VIOLATIONS BY CHINA. I LISTED IN ORIGINAL POST.  US HAS TO WIN THE ECONOMIC WAR SO THERE ARE NO MILITARY WARS IN THE FUTURE.

THE US CORP INCOME TAX IS A SECONDAEY ISSUE. A DISTANT SECOND.

An import duty on Chinese manufactured goods for egregious wanton violation of international trade regulations will halt China in its tracks.  Its the equalizer. 

China Communist Party and Communist Secretary General Xi violates all trade laws. BUILDING (and controlling) railroads, ports and other infrastructure around the word in exchange for natural resources.  China forces technology transfer, dumps products, predatory pricing etc etc etc.  CHINA  builds aircraft carriers, submarines, Air based in international territory. China claims ALL of China Sea as their territory.  

THE SOLUTION SIMPLE: TARRIFS. 

China negotiated a fair trade agreement back in the Spring . . .  .  that wasn't the problem .  The problem was they didn't want to put it in print . . . . so they could continue to Lie, Cheat and Steal like they always have.

If it's not in writing there is no enforcement.

Same old .  . .  Same old.  Like Korea, like Iran, like Russia.  Past Presidents strike agreements that never last, never are enforced. 

Why do China, Russia, North Korea and Iran think they can get away with this.  . .  .  Because they have in the past.  US Pesidents have to get reelected. They don't.  The difference this time is Trump doesn't give a fart. He is the " Negotiator"

I agree with this one Trump strategy.  I don't care if China won't sign the deal.  The tariffs will be the ruin of China's economic juggernaut. Then Trump should reinstate the ban on sales of tech to companies like Hauwei.  China will grow but not at its present projectory

China would have let North Korea sign an agreement with Trump if he let China slide on trade.  Clinton, Bush and Obama would take that deal in a second.  Biden will take that deal if elected.  Despite Trump being a thin skinned, bombastic, arrogant megalomaniac he is right on China trade. Give him credit for standing his ground.

 

Some US companies will bitch . . . tough.  Cowboy up.  Sell tech to Japan, South Korea and European companies. 

Edited August 5, 2019 by SKEP

[Jan van Eck + 7,558]

3 minutes ago, SKEP said:

US has no control over Bermuda or Cayman tax rate laws

Sure it does.

4 minutes ago, SKEP said:

US has no Control over Nike or Apple international subsidiaries. 

Sure it does.

4 minutes ago, SKEP said:

so they could continue to Lie, Cheat and Steal like they always have.

 

4 minutes ago, SKEP said:

They're done.

Well, at least you got that off your chest.  As long as you feel better. 

Chine is not done at this point.  China will continue to be a large supplier to the US consumer market.  Korea will continue to be a large supplier to the US industrial-goods market, as will Japan and Germany.  The disengagement process will take several Presidential election cycles, possibly as many as five, and if the Democrats prevail in that chain, then it will likely be undone - and rapidly.  The picture remains quite uncertain at this point.  Although Trump has dramatically started the disengagement process, there is much turmoil inside the White House staff, the in-fighting undermines the disengagement process, and Trump himself does not have the attention span to focus on the envelope of process.  So it remains a chaotic scene.  We shall see how it all plays out. 

[SKEP + 229]

4 hours ago, Jan van Eck said:

Sure it does.

Sure it does.

 

Well, at least you got that off your chest.  As long as you feel better. 

Chine is not done at this point.  China will continue to be a large supplier to the US consumer market.  Korea will continue to be a large supplier to the US industrial-goods market, as will Japan and Germany.  The disengagement process will take several Presidential election cycles, possibly as many as five, and if the Democrats prevail in that chain, then it will likely be undone - and rapidly.  The picture remains quite uncertain at this point.  Although Trump has dramatically started the disengagement process, there is much turmoil inside the White House staff, the in-fighting undermines the disengagement process, and Trump himself does not have the attention span to focus on the envelope of process.  So it remains a chaotic scene.  We shall see how it all plays out. 

Respectfully disagree. 

Any decision to build or expand in China will now have to take into consideration a US tariff.  

How do you think Nike, Apple and others will feel about taking a 10% or 25% haircut on US profit .

You say no big deal.  IT IS A VERY BIG DEAL. 

There is only one place to find US consumers . .   That's in the US.

India threatened to put a tariff on iPhones. 

GUESS WHAT ? ? ? 

Apple just built a NEW iPHONE MEGA FACTORY IN CHINA ! ! ! 

China is not done.  It will decline.  It will slow them down. It disarms them .  

Other low cost labor countries will benefit.  

Ultimately as Manufacturing Automation advances US will benefit.

You know Adidas athletic shoes are manufactured in Germany on a completely automated line.  No mfg employees.

 

Edited August 4, 2019 by SKEP

[SKEP + 229]

26 minutes ago, Jan van Eck said:

Sure it does.

Sure it does.

 

Well, at least you got that off your chest.  As long as you feel better. 

 

Jan

In the name of "Full Disclosure" and "Transpatency" does your company manufacture in Asia ? China ?

[Jan van Eck + 7,558]

15 minutes ago, SKEP said:

You know Adidas athletic shoes are manufactured in Germany on a completely automated line.  No mfg employees.

"Adidas" is the trade name given to the shoes by Adi Dassler, the entrepreneur that started up the company.   He was an immigrant to Canada and (at least) the original production lines were in Canada. He is an interesting fellow. I have not followed his successes for some years, but if he has a plant in Germany today, you can bet it is for that market. Has he closed his original Canadian manufacturing plants? 

[Jan van Eck + 7,558]

2 minutes ago, SKEP said:

Jan

In the name of "Full Disclosure" and "Transpatency" does your company manufacture in Asia ? China ?

No.  Emphatically not.  I don't do "Asia," and I certainly am not going  to get into bed with the Communists in China.  In all candor, I choose not to get into bed with authoritarians that will put you in jail and steal your assets.  You can do that if you want, not this boy.  I only manufacture in the USA, but do have an assembly operation in Canada.  I do buy out-sourced  components from abroad, but will be doing that in-house as CNC machines are brought on-line.  Trust this explains. 

[SKEP + 229]

2 hours ago, Jan van Eck said:

No.  Emphatically not.  I don't do "Asia," and I certainly am not going  to get into bed with the Communists in China.  In all candor, I choose not to get into bed with authoritarians that will put you in jail and steal your assets.  You can do that if you want, not this boy.  I only manufacture in the USA, but do have an assembly operation in Canada.  I do buy out-sourced  components from abroad, but will be doing that in-house as CNC machines are brought on-line.  Trust this explains. 

Got it

[Sebastian Meana + 278]

Free trade while it benefited a lot of countries, it doesn't benefit everybody, different countries would benefit of different things, in different ways, the "Free trade benefits all" Axiom is supposing every place is the same in every way that all places in the world are flat, temperate and ethnically unified.

Different countries will always have different interest, that's why the Bronze age collapsed, a free trade globalized world needs stability, add some instability and your free trade globalist world collapsed, there's no way you can make 200 countries agree in everything.

Free trade has existed thanks to the US after 1945, before that the USA was the primordial example of a protectionist internalized country, that America is returning with little interesting in keeping a world that doesn't benefit her

[Jan van Eck + 7,558]

11 minutes ago, Sebastian Meana said:

Free trade has existed thanks to the US after 1945, before that the USA was the primordial example of a protectionist internalized country, that America is returning with little interesting in keeping a world that doesn't benefit her

That is not entirely accurate.  The USA, after 1945, had a quasi-protectionist system known as "MFN tariffs," or "Most Favored Nation."  If you were either a neighbor (i.e. Canada) or were being showered with largesse for political purposes (i.e. Israel) you got MFN status.  There, depending on the category of the item, the duty could vary between zero and perhaps 7%.  Typically duties ran about 5.5%.  Then NAFTA came into place and duties started falling to zero, starting with autos and auto parts between Canada and USA, then also Mexico.  As various trade treaties expanded, duties continued to fall away.  But to say that it was "free trade" from 1945 to the Clinton era is not quite accurate. 

The USA was doing two things:  (1) effectively eliminating high-cost, noncompetitive business enterprises, such as shoe manufacturing; (2) buying world stability (especially to China) by granting access to US markets. Shoes were primarily manufactured in Maine and the lowest cost ones were $90.  Thus Maine employment was supported, but at large cost to the rest of the country.  When shoes went out of business, it also took along the shoe machinery manufacturers.  All that business went abroad, including to Italy, where the Lira could float and thus those small shops could export, counting on Lira devaluation to stay in business.  When the lira converted into the Euro and devaluation was no longer possible, then the Italian manufacturers took the hit and the business went to Asia.  Who gains from this?  Arguably, the US consumer, but also the Asian country, bringing in needed employment and currency, for which US goods including machinery, farm tractors, and food supplies could be obtained.  They also spent the coin on military goods and small arms, and thus undermined the real purpose of the US dropping tariffs; the exchange for a more settled planet.  This has not been lost on the Trump Administration, which has had to continue the role of World Policeman  (as in the Hormuz arena) yet receives no real benefit for that trillion dollars a year spent on a bloated military. The USA now starts to go back to its roots and isolates itself from the people who flatly refuse to clean up their act. It is hardly a perfect policy, but since nobody else is much interested in world peace, it gets long in the tooth for the USA to continue as policeman. 

[SKEP + 229]

11 hours ago, Meredith Poor said:

"Nike sells the $6 Jordans to "Nike Trading" wholely owned subsidiary incorporated in a NO TAX country like Bermuda, Cayman Islands, etc. Nike Trading sells the Jordans to Nike USA for $100.  The tax free sub makes $94 profit. Nike USA sells to US retailer for $100 .  .  . So no IS profit and $0.00 US income tax " Meaning that we need to start a trade war with Bermuda and the Cayman Islands.

Are we focusing on China's misbehavior when we should be focusing on Nike's misbehavior?

Nike's behavior is perfectly legal. Can't control that. 

The US concern is China playing fair. 

The example of Nike's transfer pricing to avoid US Corp Income Taxes demonstrates how this now EXPOSES THEM TO ANY US TARIFFS INACTED.

Edited August 5, 2019 by SKEP

[footeab@yahoo.com + 2,132]

10 hours ago, SKEP said:

If it's not in writing there is no enforcement. / China

Uh, WTO rules China agreed to are "in writing" and there is no enforcement.  Signing a piece of paper means nothing to the Chinese and several other countries I can name such as Botswana, Argentina, and Vietnam.

The only way to deal with said countries is massive tariffs.  Personally, I would start at 100%. 

As for tax avoidance through .... Malta, Bermuda, etc, just have a tariff equal to the delta between USA corporate income tax and Bermuda, Ireland, etc corporate income tax rate. Make it valid for ALL countries.  That way the EU, our ~~ allies~~  would not whine either. 

[SKEP + 229]

On 8/4/2019 at 8:31 PM, Wastral said:

Uh, WTO rules China agreed to are "in writing" and there is no enforcement.  Signing a piece of paper means nothing to the Chinese and several other countries I can name such as Botswana, Argentina, and Vietnam.

The only way to deal with said countries is massive tariffs.  Personally, I would start at 100%. 

As for tax avoidance through .... Malta, Bermuda, etc, just have a tariff equal to the delta between USA corporate income tax and Bermuda, Ireland, etc corporate income tax rate. Make it valid for ALL countries.  That way the EU, our ~~ allies~~  would not whine either. 

WTO has no leverage to enforce Communist Secretary General Xi signature to an agreement.

The Trump agreement will clearly state what was agreed to, including (1)that the terms would be written into Chinese law and that (2) tariffs would be lifted only AFTER full compliance. This should work in my opinion. If they renegade after that then slap the tariffs back on. I think China would lose if the went back on trade legislation written into law. 

As far as "Personally, I would start at 100%." Six of one, half dozen of another.  Trump's slow increase would be more acceptable to the importing companies.  Not that US owes them anything. 

Not sure what you mean with the tax avoidance. 

Edited August 6, 2019 by SKEP

[footeab@yahoo.com + 2,132]

46 minutes ago, SKEP said:

WTO has no leverage to enforce. Communist Secretary Xi signature to an agreement that clearly stated what was agreed to, including that the terms would be written into Chinese law and that tariffs would be lifted AFTER full compliance would work in my opinion. If they renegade after that then slap the tariffs back on. I think China would lose if the went back on trade Lewiston written into law. 

As far as "Personally, I would start at 100%." Six of one, half dozen of another.  Trump's slow increase would be more acceptable to the importing companies.  Not that US owes them anything. 

Not sure what you mean with the tax avoidance. 

Shock therapy works best.  Gets everyones attention.  That way the problems get dealt with instead of playing pretend games.

??? China was accepted into the WTO in 2001 via Jang Zemin's signature which according to you, doesn't count?  Only Xi's.....  WTO rules were written into Chinese law.  In fact, nearly the entire Chinese "law" was lifted 100% from the west.  Regulations and all.  None of them are followed other than at the whim of whomever is in charge.  Laws do not mean a damned thing in a lawless society.  "Compliance".... and then tariffs lifted.  What a joke. How will you determine that?  Hrmm?  You are not allowed IN China and those that are can easily be restricted to no travel allowed as foreigners can only stay at certain hotels and if the locals do not want you in, no hotel for you and you get booted.  What business importing will turn them in?  None.  All they care about is cheap semi decent quality product.  Apple?  HAHAHAHA and then get booted from China... yea, right. 

Remember all the stories about horrid air quality in China?  All of the coal fired power plants supposedly all have the exact same standards used in the West.  "Miraculously" the air in Beijing cleared up when they were enforced only because the Chinese people and officials made a gigantic stink.  No one in China gives a damn about the laws on the books or WTO regulation.  Costs  them $$$ and hurts their competitive advantage to the outside world.  Guanxi rules in China.  Not rule of law.  Travel outside the west.  Most of the world operates this way.

WTO has enforcement as it allows any nation to enact tariffs if the rules are not followed.  Now be honest, WTO IS the USA as they have veto power on all judicial appointments.  You might notice not one judge has been appointed in over a decade.  Its called the USN with a helping hand from the Brits, Spanish etc, and the Swift banking system.

[SKEP + 229]

On 8/4/2019 at 9:58 PM, Wastral said:

Shock therapy works best.  Gets everyones attention.  That way the problems get dealt with instead of playing pretend games.

??? China was accepted into the WTO in 2001 via Jang Zemin's signature which according to you, doesn't count?  Only Xi's.....  WTO rules were written into Chinese law.  In fact, nearly the entire Chinese "law" was lifted 100% from the west.  Regulations and all.  None of them are followed other than at the whim of whomever is in charge.  Laws do not mean a damned thing in a lawless society.  "Compliance".... and then tariffs lifted.  What a joke. How will you determine that?  Hrmm?  You are not allowed IN China and those that are can easily be restricted to no travel allowed as foreigners can only stay at certain hotels and if the locals do not want you in, no hotel for you and you get booted.  What business importing will turn them in?  None.  All they care about is cheap semi decent quality product.  Apple?  HAHAHAHA and then get booted from China... yea, right. 

Remember all the stories about horrid air quality in China?  All of the coal fired power plants supposedly all have the exact same standards used in the West.  "Miraculously" the air in Beijing cleared up when they were enforced only because the Chinese people and officials made a gigantic stink.  No one in China gives a damn about the laws on the books or WTO regulation.  Costs  them $$$ and hurts their competitive advantage to the outside world.  Guanxi rules in China.  Not rule of law.  Travel outside the west.  Most of the world operates this way.

WTO has enforcement as it allows any nation to enact tariffs if the rules are not followed.  Now be honest, WTO IS the USA as they have veto power on all judicial appointments.  You might notice not one judge has been appointed in over a decade.  Its called the USN with a helping hand from the Brits, Spanish etc, and the Swift banking system.

WTO regulations were not written into Chinese law.  You just can't make things up. 

China was accepted as an " emerging market" economy.  Different rules. Easy rules.  Even though they are now second largest economy in the world they claim "emerging market" status.  

You want shock present .  Plesse. Crazy.

You sound like a John Bolton fan. If you were in office you would probably drop a nuke on Bejing. Think. 

Your shock treatment would shut down everything. End possibility of any North Korea negotiations.  Retaliation against US companies. Even start conflicts. Reckless behavior starts wars.

Trump would lose support of the public and other countries. 

Edited August 14, 2019 by SKEP

[footeab@yahoo.com + 2,132]

3 hours ago, SKEP said:

WTO regulations were not written into Chinese law.  You just can't make things up. 

China was accepted as an " emerging market" economy.  Different rules. Easy rules.  Even though they are now second largest country in the world they claim "emerging market" status.  

You want shock present .  Plesse. Crazy.

You sound like a John Bolton fan. If you were in office you would probably drop a nuke on Bejing. Think. 

Your shock treatment would shut down everything. End possibility of any North Korea negotiations.  Retaliation against US companies. Even start conflicts. Reckless behavior starts wars.

Trump would lose support of the public and other countries. 

Wow

Parenting 101.  Do as you say instead of being a lying honorless coward where no one listens to anything you have to say while holding out the carrot.  Resolves the problems quickly every time.  Yes, lots of screaming the FIRST time.  Second time there is only a little grumbling and by the third time?  No one bitches and your child LISTENS when you say something and obeys.  Diplomacy works the same way. 

Now Trump/Bolton etc are complete idiots who cannot get a basic message across to save their lives to their own voter base let alone their allies or competitors.

PS:... N. Kor... "my button is bigger than yours"...+ 3 carriers nixed that problem.  Shock honest therapy.  People, respond to forthright upfront honesty.  Pussyfooting around just makes you weak, feckless, and without honor as it has the appearance that you are trying to HIDE something.  Now lets be honest here, if I am, or you are pussy footing around, we almost always ARE hiding something even if what we are trying to hide is that we are an incompetent coward. 

[SKEP + 229]

3 hours ago, Wastral said:

PS:... N. Kor... "my button is bigger than yours"...+ 3 carriers nixed that problem.  Shock honest therapy.  People, respond to forthright upfront honesty.  Pussyfooting around just makes you weak, feckless, and without honor as it has the appearance that you are trying to HIDE something.  Now lets be honest here, if I am, or you are pussy footing around, we almost always ARE hiding something even if what we are trying to hide is that we are an incompetent coward. 

WOW

Chill

I respectfully disagree with everything you stated.

Edited August 5, 2019 by SKEP

[Enthalpic + 1,496]

On 8/4/2019 at 8:02 AM, Jan van Eck said:

Although the use of "Nike" is a generalized stand-in, and with the caveat that there is no evidence presented that the actual Nike Corp. is engaging in these third-country shenanigans, nonetheless the suggestion by Meredith that the corporation is engaging in misbehaviour is accurate.  What these corporate managers are doing is taking the position that anybody who pays US taxes is a fool.  So (very expensive) accountants et al are hired specifically to figure out ways to avoid paying taxes - thus undermining the US Treasury and US economic health, but advancing their own individual interests.  To illustrate, GE Capital pays its tax attorneys a salary of $1 million a year specifically to figure out ways to make sure that GE pays nothing in taxes.  Instead of simply paying the attributed tax and hiring competent engineers and managers, you get this distortion of corporate aims and focus to avoid taxes.  Huge amounts of corporate management effort goes into this avoidance behaviour inside the USA.  It is a logical result of Byzantine tax laws, but it is also destructive of the US Treasury. 

The country is better off if Nike and GE pay their tax bills.  That said, the country is also better off if both concentrate their manufacturing inside the USA in the first place. 

Lets see trumps taxes... there are reasons he hides that.

Edited August 5, 2019 by Enthalpic

[Enthalpic + 1,496]

On 8/4/2019 at 8:43 AM, SKEP said:

Respectfully disagree. 

Any decision to build or expand in China will now have to take into consideration a US tariff.  

How do you think Nike, Apple and others will feel about taking a 10% or 25% haircut on US profit .

You say no big deal.  IT IS A VERY BIG DEAL. 

There is only one place to find US consumers . .   That's in the US.

India threatened to put a tariff on iPhones. 

GUESS WHAT ? ? ? 

Apple just built a NEW iPHONE MEGA FACTORY IN CHINA ! ! ! 

China is not done.  It will decline.  It will slow them down. It disarms them .  

Other low cost labor countries will benefit.  

Ultimately as Manufacturing Automation advances US will benefit.

You know Adidas athletic shoes are manufactured in Germany on a completely automated line.  No mfg employees.

 

They have about 4 billion more consumers (aka mouths) who, in theory, could be buying US products (food).

[John Foote + 1,135]

On 8/4/2019 at 9:02 AM, Jan van Eck said:

The country is better off if Nike and GE pay their tax bills.  That said, the country is also better off if both concentrate their manufacturing inside the USA in the first place. 

IMHO, the basic way of doing taxes will have to change to some participation tax. You play in the USA, you pay in the USA. The old VAT notion from other countries is too crude, too high, and misses too much as AI comes along.

Today it is fooling not to offshore a lot of manufacturing for tax reasons, and to satisfy global herd money. Where I work, to protect IP, do final integration and test offshore, in a high cost region, but low tax. The "value creation" portion happens there, as opposed to where much of the work is done (USA still). And if we don't offshore, not only to you pay more in taxes, but the holy grail of market capitalization punishes you. And in so many industries today there is more money in the stock than the core business. On this site we laugh about Tesla, which is an extreme example, but even blue chip earnings ratios are crazy compared to the pre-differential/hyper-low interest rate times. 

[SKEP + 229]

1 hour ago, Enthalpic said:

They have about 4 billion more consumers (aka mouths) who, in theory, could be buying US products (food).

More population . Don't consider peasants that live in the hinterlands "consumers" that will buy Air Jordans at $200 a pair.

Edited August 5, 2019 by SKEP