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To: Elroy Jetson who wrote (140467)	4/6/2018 7:54:25 AM
From: TobagoJack	Read Replies (1) \| Respond to of 217948

stoppage of rare earth export would temporarily bring much of important portion of usa semiconductor industry to halt or very expensive workarounds can count the the swiss to ensure that outcome in the mean time, there are other mechanisms of action at work ... ft.com US companies on edge over China tariff threat to supply chainsLong list of components facing punitive levies could have damaging knock-on effects 17 hours ago 4 The Trump administration says the ultimate goal of its threatened tariffs on imports from China is to bring back manufacturing jobs in the US. Jason Andringa, who runs an agricultural and construction equipment maker in Iowa, says they could have exactly the opposite effect. His business demonstrates how complex international supply chains mean that new tariffs can have damaging unintended consequences. Vermeer, where Mr Andringa is chief executive, imports cabs assembled in its plant in Tianjin, China, that it uses for its drilling vehicle made in Iowa. Using the lower-cost imported cabs helps Vermeer stay competitive against German and Chinese rivals, in the US market and around the world. But the components were on the commerce department’s list of imports from China threatened with a new 25 per cent tariff. If the administration follows through on that threat, Vermeer’s competitive position will be eroded. “We have 600 jobs at our Iowa factory as a result of being able to import products, and we have American production sold into global markets,” Mr Andringa says. “If the US goes ahead with a unilateral tariff, it is going to create global opportunities for companies in other countries to go after.” A farmer in Iowa who plants soyabeans and doesn’t know if there will be tariffs in China is not going to be quick to invest in equipment. Even if it is just a tactic for talks, the dampening effect is real Dennis Slater, Association of Equipment Manufacturers Vermeer had been planning to launch a new product line, using another Chinese component, to offer customers a lower-priced alternative. “A 25 per cent tariff makes that strategy obsolete,” Mr Andringa says. The threatened new tariffs come on top of the problems already caused by the jump in the price of steel, caused by an earlier round of tariffs imposed last month. Platts benchmark US-made hot rolled steel coil has risen by 34 per cent since the start of the year. Although Vermeer can pass some of that increase on to its customers in higher prices, it will have to absorb some of it in lower profits. The list of 1,333 categories of Chinese products facing possible tariffs excluded many of the largest US imports, including phones, clothes and shoes, to minimise the direct impact on consumers. The result has been that many components and pieces of equipment used by businesses have been threatened instead. “The administration thinks you can force everyone to bring supply chains back home to America,” says Rufus Yerxa, president of the National Foreign Trade Council, a group that argues for open markets. “But in a world of very globally integrated markets and supply chains, tariff policies are going to have a negative impact on jobs.” In the long term, he added, any country could repatriate its supply chain if it wanted, but that would mean having much higher costs and giving up the benefits of trade. The pressures on US manufacturers caused by the proposed tariffs are compounded by the threatened retaliation by China against US exports, including soyabeans and aircraft. Customers facing potential blows to their sales in China will be less willing to invest in new machinery, says Dennis Slater of the Association of Equipment Manufacturers. “A farmer in Iowa who plants soyabeans and doesn’t know if there will be tariffs in China is not going to be quick to invest in equipment,” he says. “Even if it is just a tactic for talks, the dampening effect is real?.?.?.?People in the US who might want to buy products are really facing uncertainty now.” Manufacturers do not want to be seen as opponents of President Donald Trump, Mr Slater says. The economic policies of his first year, in deregulation and corporate tax cuts, were very welcome. But he now wants the administration to listen to manufacturers. “We’re saying: ‘please understand the significance of its impact on industry’,” Mr Slater says. “If you really want to hurt manufacturing, start a trade war.”

To: Elroy Jetson who wrote (140467)	4/6/2018 8:04:45 AM
From: TobagoJack	Respond to of 217948

in the mean time, other special ops deployed without dazzle-dazzle tweet-storm low-key, going for the jugular, where it matters, wsj.com Could China Scuttle Qualcomm’s $44 Billion NXP Deal?Shares in the car-chip specialist are now trading almost 10% lower than Qualcomm’s bid price Stephen WilmotApril 6, 2018 5:30 a.m. ET MisstepNXP shares vs offerSources: FactSet, Qualcomm NXP share priceQualcomm offer2017’18707580859095100105110115120125130$135 NXP is the world leader in automotive microchips, a field expected to grow rapidly as cars become ever more like computers on wheels. This is the attraction for Qualcomm, which is under pressure to revive growth by diversifying away from the sluggish smartphone market. It needs the deal all the more for having aggressively rebutted its rival Broadcom ’s $120 billion takeover proposal this year. The White House’s decision to block the Broadcom bid on national security grounds could make it hard for Qualcomm to propose remedies in China that involve sharing technology or selling assets, as Western chip companies have done in the past. Almost two-third of the company’s revenues come from the country. Car chips are likely also of strategic importance to China, whose “Made in China 2025” plan specifically cites both microchips and electric cars as areas of focus. This gives it a reason to find ways to promote its own chip industry as part of any package of remedies. If investors’ concerns are understandable, particularly in light of this week’s escalation of tensions over technology sharing and trade, the risks of the Qualcomm bid collapsing may be priced in. NXP now trades for roughly 12 times earnings before interest, taxes, depreciation and amortization, compared with 11 times for Infineon ,the second-largest player in car chips—even after the recent tech selloff. Arguably the market leader deserves a premium; it traded at one in the past. If the deal breaks down Qualcomm will need to pay NXP a breakup fee worth roughly $5 a share. Bargaining ChipEnterprise value to EbitdaSource: FactSetEarnings before interest, taxes, depreciation and amortization .timesIncreased offerDeal with QualcommNXPInfineon2014’15’16’17’184681012141618 It is easy to see how China might use its ability to block Qualcomm’s bid for NXP as a bargaining chip. But even if it did, the downside for NXP stock looks limited. This could be a bet on an easing of trade tensions worth taking. Write to Stephen Wilmot at stephen.wilmot@wsj.com