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WSJ: U.S. consumers buying finished foreign goods rather than pay more for U.S. products

yllus

Elite Member & Lifer
Aug 20, 2000
20,576
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This appears to be an unnecessary lesson now about to be taught to American businesses and consumers: A globalized world exists whether economic illiterates reside in the White House or not. The WSJ reports that rather than paying more for U.S. good that require tariffed foreign materials, some consumers are opting to just buy the whole thing from foreign sources. Also, supply chains are in danger of moving outside of U.S. borders to allow products to be finished and then imported.

Wall Street Journal - Steel Tariffs Are Taxing Some American Companies

New tariffs intended to bolster the American steel and aluminum industries are starting to have the opposite effect in a key part of the U.S. supply chain.

U.S. steel producers are benefiting from tariffs that make it more expensive for companies to buy the metals overseas. But some U.S. firms that use the metals to make everything from refrigeration parts to wheels say the tariffs have led to higher materials prices that are forcing them to charge more for their products. These firms say that in some cases, customers are turning to foreign suppliers that use cheaper, tariff-free metals to make the same products they can then export to the U.S. without bumping up against the new trade barriers.

The fallout, while so far limited, illustrates how efforts to protect some U.S. companies can cause unintended pain for others.

“This is a nightmare for steel consumers,” said H.O. Woltz III, chief executive of Insteel Industries Inc., a North Carolina maker of concrete reinforcements. Mr. Woltz said some of Insteel’s customers have indicated they will boost imports.

...

Aneesa Muthana, owner of Pioneer Service Inc. in Addison, Ill., said her company recently lost two orders—worth about $60,000 annually—from a longtime customer.

Pioneer Service doubled the price of some refrigeration and climate-control parts to account for higher steel costs, she said. In response, the customer tapped a Chinese competitor to supply the parts. “This is really hurting manufacturing,” Ms. Muthana said.

One option for manufacturers with established supply chains abroad is to shift production outside the U.S. to take advantage of lower costs.

“A few of our customers have moved some of their production back to Europe and Canada because of the increases in prices for raw materials,” said Jerry Pines, chairman of Millenia Products Group, a fabricator based in Itasca, Ill. Mr. Pines said the effect of tariffs on pricing and availability “has made the marketplace the most difficult place to operate in the 50 years I have been in the steel business.”

Tool maker Stanley Black & Decker Inc. is considering replacing American suppliers with foreign ones for components of products made in the U.S.

“All options are open,” CEO Jim Loree said in an interview. “If that made sense in a given situation, there is a high probability we would pursue that.”

Lippert Components Inc., an Indiana maker of parts used to make RVs and boats, has begun importing some additional components made from steel and aluminum and is considering importing more.

“We’re finding alternative sources,” CEO Jason Lippert said. “There’s cheaper alternatives overseas.”

Jeffrey PizzoIa, chief operating officer of Ohio wheel maker Americana Development Inc., is among the manufacturers that have filed requests with the Trump administration to impose tariffs on finished goods imported from China. Attempts to pass on higher steel tariffs have helped push customers to take their business to Chinese suppliers, he said.

“We’re just asking the U.S. government to level the playing field,” Mr. PizzoIa said. “The tariffs are just pushing it perhaps to a breaking point for us.”

Other manufacturers’ customers are delaying orders.

“We have had several projects go from, ‘let’s roll’ to, ‘let us think about it,’” because of concerns about the availability and higher cost of raw materials, said Bill Assenmacher, chief executive of CAID Industries. Customers usually expect the Tucson, Ariz., industrial metal fabricator to start a job within two to four weeks, he said, but in today’s market, “we may have to go a couple of months to find material.”

...​
 
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FIVR

Diamond Member
Jun 1, 2016
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This is what happens when Trump trash makes decisions for the economy. Silicon Valley will adapt and prosper, while flyover country pays the price.


God in his heaven, all's right with the world.
 
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FIVR

Diamond Member
Jun 1, 2016
3,753
907
106

Jeffrey PizzoIa, chief operating officer of Ohio wheel maker Americana Development Inc., is among the manufacturers that have filed requests with the Trump administration to impose tariffs on finished goods imported from China. Attempts to pass on higher steel tariffs have helped push customers to take their business to Chinese suppliers, he said.

“We’re just asking the U.S. government to level the playing field,” Mr. PizzoIa said. “The tariffs are just pushing it perhaps to a breaking point for us.”


Trump trash "free market" solution to the problem they created by begging for handouts: Beg the government for even more handouts.

 

1prophet

Diamond Member
Aug 17, 2005
5,288
503
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Globalization is about the transfer of wealth to the 1% using the disparity of economic systems and lack of basic human, labor, environmental, safety rights that allows companies to kick profits upstairs while the lower classes end up in a competitive free fall for the few remaining scraps.

Trump is a day late and a dollar short trying to fix what our supposed pro-labor middle class democrats were supposed to be doing for the last four decades if they weren't so busy gulping down the corporate pig slop while being republican-lite.

These same hypocritical democrats that like to promote higher teacher salaries, better schools, repairing the dilapidated infrastructure, living wage jobs, free healthcare, free college education, etc. conveniently forget that someone has to pay for all this,

and it definitely isn't the rich whom they like to vilify in public but have no problem accepting their campaign contributions for that secret loophole/tax exemption they sneak into the law while claiming to be working for the common people.

This is the result of the race to the bottom in the name of cheaper being better at the expense of wages, labor, environmental and safety rights using foreign government subsidized outsourcing, using illegals to avoid paying taxes and living wages, using H1-b's to avoid paying/replacing Americans whom were told all they have to do is get an education and the ensuing high salary will take care of their school loan debts,

Made in America is not about some jingoistic nationalist slogan that it has turned into that Trump has taken advantage of, but rather it is about taking care of the country that in turn allows the middle class to be able to pay for the teachers, schools, infrastructure, healthcare, living wages which results in that higher standard of living that Americans were told was part of the American Dream,

and that ain't going to happen if your idea of growth is dollar store/walmart type of employment that needs food stamps to make ends meet so you can enjoy your cheap imported junk in the name of saving money so you can buy more of the same soon after it breaks while discarding the broken waste to some third world country that has to deal with the pollution and waste so you don't have to.
 

Jhhnn

No Lifer
Nov 11, 1999
62,150
14,361
136
No, Domestic policy is to blame for that Wealth transfer.
Couldn't be! Not 40 years of trickle down Reaganomics!

We've simply allowed the fruits of technological progress to go almost exclusively to the ownership class. Whole classes of employment have been diminished or disappeared. It's perfectly obvious that if the people want a bigger share of the pie that we'll have to get it out of the other end in taxes & redistribution. Well, other than to conservatives.

As multinational Capitalism reaches higher & higher levels of organization & efficiency they need American labor less & less.
We've adopted the POV that the only legit stakeholders in corporate America are the shareholders, bondholders & execs. When they automated & liquidated the Rust Belt & moved on to greener pastures all the people & communities who depended on them to make a living got freedumb instead. It's the same for all of the other Americans affected by automation, better materials, better engineering & better transportation.
 

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