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Just Your Standard Bull...

published: May 31st 2019
by: Michael Sturgess

The trade war between the US and China continues. Earlier this month, it was reported that Trump increased tariffs on $200 billion worth of Chinese goods, increasing the rate from 10% to 25%. He also increased the list of goods that are subject to tariffs to include a great deal more products classified as consumer goods.
     Curiously, certain items like smartwatches, Bluetooth devices, and safety items like bicycle helmets, high chairs and car seats were not subject to tariffs.
    Depending on the news source you read or listen to, the actual effect these tariffs have had has varied. According to some sources, US businesses and consumers have borne the brunt of the cost of these tariffs. So, to this I say, “well DAH!”
    No matter what the item may be, the final price will include production costs, freight, advertising, taxes and yes tariffs if applicable. The real question here is this. If the tariff for Chinese goods were listed on your bill or sale tag as a separate line item—whether you buy online, or at a store—would you change your mind? Would you look for a similar good from a different manufacturer? How about this—would you look for more goods made in the good ole USA? Or even perhaps look to buy a similar product from a country with a favorable trade status?
    For the first time in my lifetime, we have a president who truly fights and believes in fair trade practices. Trump is trying to put an end to industrial espionage and out-of-kilter trade imbalances. He also knows the American farmer and rancher has made sacrifices in these areas, so he lobbies for disaster assistance for them. Did Carter do this when he placed embargos on US corn sold to Russia in the ‘70’s? No. I have always believed that if you use our product as a strategic wea-pon, you should have to pay for that privilege. Ap-parently, President Trump believes the same. I ap-plaud him for it.
    However, I believe we should really engage the American consumer in this fight for fair trade and list all tariffs placed on any purchased good that originates from a country that does not have favorable trade status with the United States. You want to hit China where it hurts? Start showing a 25% tariff charge as a separate line item on the sale tag.
    Here’s a great summertime example for us farmers and ranchers out there. Let’s say you have two ball caps, one that is manufactured in China and another Manufactured in Taiwan. Both have a wholesale list price of $5.00. However, Taiwan has earned a favorable trade status and China has not. So, the Chinese cap is subject to a 25% tariff, or $1.25 per cap, making the total wholesale price of the cap, before taxes to be $6.25 per cap. Would you still buy the Chinese cap?
    Give the American consumer the choice and you will see the table reverse. China will then bear the brunt of the tariff effect. And then, perhaps you may finally get them to the table to negotiate!

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