With the huge differences in per-country tariff, there seems to be a large incentive to reroute and relabel imports. E.g., build a bike frame in China, export it to a sister company in Japan, and export it to the US from there, claiming production in Japan. How effective are existing controls against that? (And what are they even, I'm ignorant.)
Bikes in the age of tariffs
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Re: Bikes in the age of tariffs
#12Re: Bikes in the age of tariffs
#13I've never been a political donor, I might've thrown $20 into a small donation a couple times. However, it seems financially irresponsible not to pour everything up to the legal limit into punishing everyone involved in this tax hike to the maximum extent.
Re: Bikes in the age of tariffs
#14> That is a factor that’s often overlooked: The Civic Type R—and also many high-end bicycle components—barely make sense from a strict business perspective. ... International trade has made it possible to pool the global demand for such niche products and make them all in one place, achieving economies of scale that make them (almost) cost-effective. This is such an interesting insight that would never have occurred…
Of course there are enormous benefits to globalization: economies of scale, efficiency and lower prices, quality from specialization (wine from France, beer from Germany, etc), increased competition, etc. To think protectionism will benefit the economy is ignorant.
The global system of free trade and human rights has been the most free, prosperous, and peaceful era of humanity by far. Whole nations lifted from deep poverty, such as China and India (with still more to be done!). Incredible prosperity for the wealthy. Freedom, self-determination, democracy and human rights as the global norms.
Why are we throwing it away again? Much could be done to reform it, but we'll just throw it out?
Re: Bikes in the age of tariffs
#15With the huge differences in per-country tariff, there seems to be a large incentive to reroute and relabel imports. E.g., build a bike frame in China, export it to a sister company in Japan, and export it to the US from there, claiming production in Japan. How effective are existing controls against that? (And what are they even, I'm ignorant.)
Good point. It still would increase costs, maybe not as much.
Re: Bikes in the age of tariffs
#16"the age of tariffs" ah yes, typical ethnocentric point of view of the US.
Does the author not know other nations have been engaged in charging tariffs for a very long time?
Re: Bikes in the age of tariffs
#17With the huge differences in per-country tariff, there seems to be a large incentive to reroute and relabel imports. E.g., build a bike frame in China, export it to a sister company in Japan, and export it to the US from there, claiming production in Japan. How effective are existing controls against that? (And what are they even, I'm ignorant.)
Good point. It still would increase costs, maybe not as much.
You forgot the part about going from China to Japan and the associated costs.
It could be cheaper? Could also be more expensive as well.
In any case, if too many people play that game, then it only raises the tariff on Japan. I wouldn't assume these tariffs are fixed. They seem to be tied to trade deficit. So..
yeah.
No real way around them over time.
Might even piss the US government off if you try that. Which is kind of like playing with fire right now. It's not clear to me that this administration believes in rule of law in the strict sense that everyone adhered to in the past.
Strange days ahead.
Re: Bikes in the age of tariffs
#18With the huge differences in per-country tariff, there seems to be a large incentive to reroute and relabel imports. E.g., build a bike frame in China, export it to a sister company in Japan, and export it to the US from there, claiming production in Japan. How effective are existing controls against that? (And what are they even, I'm ignorant.)
Re: Bikes in the age of tariffs
#19> Let’s do the math: Take a kid’s bike that retails at a big box store for $ 150. Let’s assume that bike costs $ 30 to make. The rest of the cost is shipping to the U.S., warehousing, transport to the store, marketing, admin costs, customer service, warranty, retailer profits, etc. Whether the bike is made in China, Vietnam or Cambodia, the new 34-38% tariffs will increase the cost by ‘only’ $ 10-12. (The old tariffs are already part of the pricing.) Add overhead and capital costs on those $ 10-12 (financing and insuring the higher purchase price, etc.). Now the price goes up by $ 15-20, or about 10-13% of the final price of the bike.
That's a great explanation of the direct impact of tarriffs for a business like this.
Re: Bikes in the age of tariffs
#20"the age of tariffs" ah yes, typical ethnocentric point of view of the US. Does the author not know other nations have been engaged in charging tariffs for a very long time?
The world's most powerful consumer country putting broad tariffs on all imports that will be historically as high as the 1800s and higher than most any other major economy is indeed a move to an "age of tariffs" and is a bfd.