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Comment by Taniwha | Hacker News Reader

I have a sideline building open source hardware, I build and warehouse in China and sell all over the world .... I don't see these tariffs, I don't send the US govt money each time someone orders something, I just send stuff by mail to customers, they're the one doing the importing and end up paying local taxes in whatever country they live (just as I pay taxes importing stuff here in NZ when appropriate).

People seem to forget that this is a really just a new tax that's being paid by Americans

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And if the Americans decide that the increased tax makes the total price more than what they want to spend, they'll stop buying your products. That is the intention behind these tariffs.

What is the goal of Americans not buying stuff? What is it they hope to achieve?

The goal is to force companies to move the manufacturing they took to China back to the US. The only reason companies manufacture in China is price. It is cheap to manufacture in China and then import it. Make it expensive to import from China and the companies will be forced to move manufacturing back.

It's quite simple actually. This tariff is essentially is price disadvantage for China made products; products made in the US now have a relative advantage. So this is done in the hope that it will make sense for people to buy US made products and will also encourage local (US) companies to manufacture and sell in the States (since the tariff protects them from competition).

It's a great move IMHO. I visited a WTO (world trade org) event in Mumbai recently and the US representative (https://en.wikipedia.org/wiki/Richard_N._Haass) was somewhat happy with what Prez. Trump is doing with import duties.

I think it's largely a zero-sum-game - WTO rules allow a country targeted with unilateral trade sanctions to respond in equal measure without sanctions - which China is doing.

Unlike a communist country they're free to pick targets that are political targets, in particular they're being smart, going for Trump's rural base. Meanwhile real people, in both countries are losing their livelyhoods.

> I think it's largely a zero sum game

If I get your point right, I think that depends on a few things:

(1) how much the 'Trump's rural base' in question depends on the Chinese market for their exports (not as much as the reverse IMO);

(2) Whether US cos. will be able to take advantage of the higher tariffs on China made goods and hence sell more (therefore increase / stabilise employment);

(3) If it doesn't really impact imports from China, and Americans just end up paying higher prices due to the tariffs, then how the GOV uses this new income from the tariffs? This could be used to strengthen local industry and increase employment, etc.

> which China is doing

China was doing this either ways by levying high import duties on products brought in to China, while US practiced free market and low key became somewhat of a victim to subsidised Chinese manufacturing.

Disclaimer: my views may be naive, and would love to be corrected or given more insight on the subject to prove my view otherwise.

I'm pretty sure that prior to this silly trade spat China simply charged their national sales tax (17%) against imports - which is fair since that puts imports on a level playing field with local products. This is not unusual, NZ, where I live, does the same thing (15%). US states with sales taxes do too.

I think China is targeting pork and soy beans (lowest prices now in a decade)

> prior to this silly trade spat China simply charged their national sales tax

Not true. Developing countries like China and India have long imposed "import duties" (aka customs or tariff) on certain categories of products to safe guard local industry and employment while making special trade agreements only with a few countries.

They even change the tariffs on a yearly basis without caring about consumers of imported goods in their country (prices of imported cars and items like the iPhone vary every year in India).

To be fair, it probably doesn't affect a lot of individuals in the US, since our de minimis is $800 [1]. Compare to e.g. Canada ($20 CAD).

[1] https://www.cbp.gov/newsroom/national-media-release/de-minim...

It doesn't affect a lot of US consumers, but it will affect a lot of US retailers.

Let's say after 2019-01-01 I want to purchase a $500 gadget that's being hit with the 25% tariff. I can either:

1. Buy it from Amazon or a local retailer and pay $500 x 1.25 x 1.085 (state and local sales tax) = $678

2. Buy it online from AliExpress/BangGood and pay $500 + shipping

Why would you not pay an extra 25% when buying from AliExpress?

Because it's below the $800 minimum on which import duty is required for a parcel imported by a single person on a single day. So Amazon would have to pay the duty on whatever they import, and you wouldn't.

It does become a loophole if the duty is much higher than the price of shipping.

The grand parent says individuals can import a thing up to $800 before tax.

Fair enough, but this protects local businesses trying to compete with imported goods from China, since Americans don't have to pay the taxes (tariff) in question for goods made in the US. It's been like this in India for decades, and as a small, profit centric business person, I take it with a sigh of relief.

I think there are two answers to that. The first is you are a small time player. The medium to big players do have to abide by the tariffs. And what they do is shift the factories and supply lines to other countries or back to US. The cost to consumers will be the same - for the company, it is a large upfront asset purchases that depreciates over time, and expense reduction over time.

The second is US is introducing a bill to have USPS start collecting electronics information on merchandises so customs inspectors can screen parcels for fentenyl and others. If your customers didn’t declare your goods correctly, and didn’t pay the tariff, the goods might be detained or disposed. Which would then mean troubles for you and your customers. Your customers might buy from other vendors after figuring out that buying from China isn’t worth the hassle

I think it's more that the tariffs apply to the US importers, not to the manufacturers (unless they are the same people) - when you buy something from me (or Aliexpress for that matter) you are the importer, when you buy an iPhone Apple is the importer

Agreed. However do you see the 'retaliatory' tariffs imposed by China? At least, I hear from US media that China is apparently imposing similar tariffs, wondering if the categories are similar (or if they even have as large an impact as the US ones).

These tariffs aren't new to China however. Do import duties ring a bell? Countries like China and India have been imposing (and raising) them on various products for many reasons (mostly protecting local industry, generating employment, etc).

Import duties in the US however, have been relatively non-existent. To give you an eg: A non local made car that costs $60k in the USA costs $150k++ in India (and duties make petrol here more expensive too).

Not yet, but I haven't done a new build recently - I think that China's aiming more at farm imports rather than chips so I'm probably OK (besides China let's me claim back any taxes I pay when I re-export a manufactured product)

Are you sending from where you warehouse in China? Then maybe your parcels will attract attention and get hit by the tariffs. If you are shipping from NZ then I would guess not, and maybe you even have a new found advantage compared to competitors shipping from China, assuming there are competitors in your space.

shipping from China is far far cheaper than shipping from NZ (or almost anywhere else) it would almost double the cost of my products - NZ shipping costs would be higher than US tariffs - >90% of my customers are NOT in the US

The US is also applying tariffs against other countries too.

...but those taxes (theoretically) serve as disincentives from purchasing the Chinese goods, no?

>>People seem to forget that this is a really just a new tax that's being paid by Americans

More expensive items are less likely to be bought, people have choices, so don't dismiss that so easily. Trump hopes that China caves in and makes concessions, giving better terms to USA companies. Less sales means less jobs in China, less dollars in their forex accts etc etc.

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