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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (129940)	2/7/2017 10:55:34 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 217617

You've raised various trade issues, but few of these suggest any unequal barriers to the Chinese market. 1.) The Forbes article you posted the link to cites the anti-dumping tariffs China imposed on GM and Chrysler-Fiat cars after the US government heavily subsidized them in 2008 with bailouts. This came after we imposed anti-dumping duties of up to 239% on Chinese solar panels and similar duties on Chinese steel. I've previously addressed this yesterday. Anti-dumping duties are part of the trade treaties for a reason, we impose them to negate the advantage of subsidies by foreign governments. We can't complain when other countries follow the same rules on dumping we do and charge extra anti-dumping imports to cancel out the subsidies our government gives some businesses. 2.) The Grey Market. This is NOT a trade issue. The US Supreme Court greatly distressed many US manufacturers when they ruled on an American who was purchasing American textbooks which the US publisher sold in Thailand for 80% less than American prices. The court ruled he could continue to import these books for Thailand and create a grey-market for the "international version" of these textbooks. This is not an issue of import duties. - We experience the same here in the US. I've bought Brioni suits in Milan for 1/3 of the cost I'd pay here at Barneys NY in Los Angeles because the importer is tacking on a huge profit margin. When I come back to America there was always a hefty import duty on these items so I would try to avoid this by mailing the suits back to myself. Due to the Supreme Court ruling I can go on Amazon and purchase the "international version" of cell phones without a US warranty for less than the American version - but this has nothing to do with import taxes, it the manufacturer trying to segment the world market with different prices. Many luxury goods manufacturers have sold their products in China at a far higher mark-up than they charge in Europe. This led to daigou, what we call the Grey-Market. Last year China imposed steep import duties on good travelers bring back or purchase direct through e-commerce. Happy with this crack-down on the grey market many Luxury Good makers reduced the price of their goods sold in China. 3.) IP theft. The Hacking Extradition Treaty Xi Jinping came to the White House to sign in September 2015 stopped outright IP theft organized by the People's Liberation Army after the Cyber Division of the FBI documented the extent of this theft. The problem of knock-off goods is endemic in all nations, including the United States. You can buy a fake Rolex here too. This is an ongoing battle for luxury good makers. I remember visiting a new Mall in Guadalajara Mexico in 1983 and every luxury brand appeared to have an outlet there, selling goods for suspiciously low prices - and of course these were all fakes. This is now less of a problem in Mexico, but the level of fake goods in China are similar to Mexico in 1983. China has improved cooperation between IP owners and their police organizations, but much more can be done. This is something that can be improved upon - but it has nothing to do with import duties.

To: RetiredNow who wrote (129940)	2/7/2017 11:07:07 AM
From: Elroy Jetson	Respond to of 217617

The final issue you raised is 4.) Trump's idiotic misunderstanding of VAT taxes. Most nations around the world impose a national Value Added Tax while the US does not. When an Australian company sells their product in Australia they have paid a 15% VAT tax at each stage of production or import which is included in the price of the product. When a competing US company sells their product in Australia they're also charged the 15% VAT on import, which is included in the price of the product. The same is true in Europe and China. When Australia exports their goods to Europe or China, the Australian VAT tax is refunded on those exports but those good pay the European VAT on entry to Europe and the Chinese VAT on entry to China. They don't pay a VAT tax on entry to America because we don't have a VAT tax. But when they're sold in Los Angeles I pay a 9% sales tax on Australian goods just like I pay on American goods. Foreign VAT taxes in no way disadvantage US exports because the same tax is imposed on their domestic products. If Trump thinks a VAT tax is a huge trade advantage he can impose a 15% national VAT tax on all goods in America - the largest tax increase citizens in our country have ever seen.