eamondzhang
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China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 8:46 am

Thought the topic deserves its own thread. Please don't derail this thread.

China just announced an 25% tariff against some of the USA-built aeroplane as part of a border trade war between the countries.

The list levied tariff against aircraft, built by USA manufacturers, with an empty weight between 15,000 kg and 45,000 kg. Basically this means all 737NG series (admittedly only 22 on order now) are included, but the MAX 8 with a 45,070 kg empty weight is excluded.

Link (in Mandarin): http://www.mofcom.gov.cn/article/ae/ai/ ... 8484.shtml

Thoughts?
 
Armodeen
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:01 am

A warning shot across the bows to remind certain folks that China can do some real damage to certain important US companies if they feel threatened.
 
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MrBren
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:08 am

Protectionism always comes back as a boomerang, good luck American workers.
 
c933103
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:15 am

https://news.futunn.com/market/77079?src=3
Seems like only planes with Empty Weight between 15000kg and 45000kg would be affected?
 
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Zoedyn
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:17 am

Not sure this represents only a tit-for-tat trading battle with limited impact and scope, or is an omen of sth far more profound and bleak to come in years ahead that would drag the world into deep uncharted waters :?
Last edited by Zoedyn on Wed Apr 04, 2018 9:28 am, edited 1 time in total.
 
Olddog
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:25 am

If the empty weight numbers are correct, it is just posturing.
 
dtw2hyd
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:26 am

The US imposing tariffs on Chinese made aviation components and China imposing tariffs on US-made planes. It may be a wash for US-China trade. Everyone else pays more???
 
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Jayafe
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:30 am

"Next time you bother us we will modify one digit of the rule (to 46), and that will be all in China for your manufacturer best seller". First warning.
 
eamondzhang
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:34 am

c933103 wrote:
https://news.futunn.com/market/77079?src=3
Seems like only planes with Empty Weight between 15000kg and 45000kg would be affected?

Yes that's correct. Boeing's data shows 737NG being in this category, but MAX is out. Not sure how they define the Empty Weight for each a/c type (it's Chinese Customs after all).

Michael
 
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OA940
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:36 am

This is a warning. Can't say China is in the wrong here. Like Canada did with that Boeing order after the BBD scandal escalated. I have a feeling we're gonna see more like this in the coming years...
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Heavierthanair
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:42 am

G'day

The Chinese tariffs are in response to Trumps 25% tariffs

https://www.flightglobal.com/news/artic ... rt-447284/

I doubt the Chinese will be losing this battle :crazy:

Cheers

Peter
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neomax
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:42 am

dtw2hyd wrote:
The US imposing tariffs on Chinese made aviation components and China imposing tariffs on US-made planes. It may be a wash for US-China trade. Everyone else pays more???


Not Airbus apparently. The big winner here is Europe.
 
c933103
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:43 am

The China Custom Code for planes with empty weight between 15t and 45t being listed is 88024010, some examples of entries that fall into the category includes: Gulfstream G450/G550, A319-100, A320-214 MSN707, 737-700, 737-800
How many unfilled 737NG-800 orders are for Chinese customers? And MAX8 probably won't be affected as wiki say its OEW is slightly higher than 45000kg?
 
mjoelnir
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:47 am

I think counting that the 737-8 would be excluded from customs is a bit dicey. It depends on what empty weight means. The MEW, manufacturers empty weight, should be lower than the OEW, operating empty weight. The OEW is given with 45,070 kg in Wikipedia, but what is the MEW?
I would assume the MEW of the 737-8 coming in below 45,000 kg.
 
ap305
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:53 am

I think this is a window that the Chinese have given Trump.... If he does not back off this could get ugly for Boeing.
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Jouhou
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:53 am

eamondzhang wrote:
Thought the topic deserves its own thread. Please don't derail this thread.

China just announced an 25% tariff against some of the USA-built aeroplane as part of a border trade war between the countries.

The list levied tariff against aircraft, built by USA manufacturers, with an empty weight between 15,000 kg and 45,000 kg. Basically this means all 737NG series (admittedly only 22 on order now) are included, but the MAX 8 with a 45,070 kg empty weight is excluded.

Link (in Mandarin): http://www.mofcom.gov.cn/article/ae/ai/ ... 8484.shtml

Thoughts?


Boy, I sure wish I could read more than a few words of this list. I'm sure there will be an English translation by tomorrow.
 
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keesje
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:58 am

This might protect a lot of Chinese worker families at COMAC against aggressive imports.
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blackbox67
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 9:58 am

What goes around comes around. In times of Trumpocracy, Boeing is in a serious disadvantage for keeping all their final assembly lines within the US.
"America first" only works when no other country is doing the same.
 
BestWestern
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:12 am

Since the Chinese government order the vast majority of Boeing aircraft in the country, all the have to do is not order aircraft, or refuse to accept those on order. What’s Boeing going to do? Blacklist them? Haha
Greetings from Hong Kong.... a subsidiary of China Inc.
 
RalXWB
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:17 am

Protectionsism and trade wars always have consequences. IMO this is just the beginning because a certain Twitter user is out of control.
 
tphuang
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:22 am

I'd be surprised to see any domestic airlines in China announce any big boeing orders for the next few months at least. Especially wide body orders.
 
fsabo
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:34 am

ap305 wrote:
I think this is a window that the Chinese have given Trump.... If he does not back off this could get ugly for Boeing.


This is symbolic. It is a warning that china is serious and will fight a trade war; they will not cave in. Even if trump goes ahead with this war, china likely will not expand tariffs. Putting tariffs on boeing aircraft would allow airbus to raise prices. So it is logical to let boeing and airbus compete, but choose airbus unless boeing offers a significantly better deal.

I can't feel sorry for boeing considering the cseries.
 
bigjku
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:34 am

It isn’t the job of the US government to protect Boeing. If one truely believes that China is engaged in unfair trade practices, the biggest issue seeming to be IP theft and coercion, then it needs to be addressed at some point. If Boeing gets hurt then so be it.
 
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Faro
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:36 am

Boeing shares are down 5% in pre-trading...

http://money.cnn.com/2018/04/04/news/economy/china-tariffs-us-goods-soybeans/index.html

Plane maker Boeing (BA) plunged more than 5% in premarket trading, and GM (GM) was down almost 3%.



Faro
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rbavfan
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:41 am

c933103 wrote:
The China Custom Code for planes with empty weight between 15t and 45t being listed is 88024010, some examples of entries that fall into the category includes: Gulfstream G450/G550, A319-100, A320-214 MSN707, 737-700, 737-800
How many unfilled 737NG-800 orders are for Chinese customers? And MAX8 probably won't be affected as wiki say its OEW is slightly higher than 45000kg?


The A319/A320 would not be included as they are European planes not US. The US manufacture center is for North American sales, not China.
 
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Faro
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:42 am

bigjku wrote:
It isn’t the job of the US government to protect Boeing. If one truely believes that China is engaged in unfair trade practices, the biggest issue seeming to be IP theft and coercion, then it needs to be addressed at some point. If Boeing gets hurt then so be it.



And if Boeing is the US's largest single exporter, so be it...

http://money.cnn.com/2018/03/07/news/economy/top-us-exports/index.html

Civilian aircraft and aircraft engines: $99 billion. This is what makes Boeing (BA) the nation's largest single exporter.



Faro
The chalice not my son
 
c933103
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 10:57 am

rbavfan wrote:
c933103 wrote:
The China Custom Code for planes with empty weight between 15t and 45t being listed is 88024010, some examples of entries that fall into the category includes: Gulfstream G450/G550, A319-100, A320-214 MSN707, 737-700, 737-800
How many unfilled 737NG-800 orders are for Chinese customers? And MAX8 probably won't be affected as wiki say its OEW is slightly higher than 45000kg?


The A319/A320 would not be included as they are European planes not US. The US manufacture center is for North American sales, not China.

I was just listing products that are included in the particular custom code, not what will be affected by the new tariff
 
dtw2hyd
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:06 am

Faro wrote:
bigjku wrote:
It isn’t the job of the US government to protect Boeing. If one truely believes that China is engaged in unfair trade practices, the biggest issue seeming to be IP theft and coercion, then it needs to be addressed at some point. If Boeing gets hurt then so be it.



And if Boeing is the US's largest single exporter, so be it...

http://money.cnn.com/2018/03/07/news/economy/top-us-exports/index.html

Civilian aircraft and aircraft engines: $99 billion. This is what makes Boeing (BA) the nation's largest single exporter.



Faro


And the biggest government subsidy receiver in the country at all levels. China imposing tariff has less impact on Boeing than US imposing tariffs on Chinese aviation components.
 
waly777
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:13 am

This is unnecessary and will get ugly really quickly.
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bigjku
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:14 am

waly777 wrote:
This is unnecessary and will get ugly really quickly.


Interest here are very narrow. I believe a statement like this needs some support. Why is it unnecessary in the long run? Is there no problem at all to deal with?
 
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Jayafe
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:19 am

bigjku wrote:
waly777 wrote:
This is unnecessary and will get ugly really quickly.


...Is there no problem at all to deal with?


There is a problem indeed, but should be gone by 2021. China and the world need to deal with the mess meanwhile.
 
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Revelation
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:27 am

BestWestern wrote:
Since the Chinese government order the vast majority of Boeing aircraft in the country, all the have to do is not order aircraft, or refuse to accept those on order. What’s Boeing going to do? Blacklist them? Haha

They can't out wait China since they have a leader for life.

Short of an unfortunate incapacitation, no change till 2022?

Greetings from Hong Kong.... a subsidiary of China Inc.

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bigjku
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:30 am

Jayafe wrote:
bigjku wrote:
waly777 wrote:
This is unnecessary and will get ugly really quickly.


...Is there no problem at all to deal with?


There is a problem indeed, but should be gone by 2021. China and the world need to deal with the mess meanwhile.


Cheeky but dishonest way to avoid the question asked. Does China engage in fair trade or not? And if not should this be addressed?
 
bigjku
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:35 am

Revelation wrote:
BestWestern wrote:
Since the Chinese government order the vast majority of Boeing aircraft in the country, all the have to do is not order aircraft, or refuse to accept those on order. What’s Boeing going to do? Blacklist them? Haha

They can't out wait China since they have a leader for life.

Short of an unfortunate incapacitation, no change till 2022?

Greetings from Hong Kong.... a subsidiary of China Inc.

Indeed.


It’s strange to take this position since trade was one issue where there was large scale agreement in the last election. TPP being dumped. NAFATA roundly criticized. This came from both parties and had wide public support.

In general I am more of a free trader but no one in either party really stood up and made an effective case for it. The stance of Bernie which was co-opted by Hillary (probably with no intention to follow thru) was not really any different.

Most stances even here aren’t willing to say China is doing things fairly, but rather than it isn’t worth it to try and make them do so. That isn’t really compelling.
 
fsabo
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 11:44 am

bigjku wrote:
Revelation wrote:
BestWestern wrote:
Since the Chinese government order the vast majority of Boeing aircraft in the country, all the have to do is not order aircraft, or refuse to accept those on order. What’s Boeing going to do? Blacklist them? Haha

They can't out wait China since they have a leader for life.

Short of an unfortunate incapacitation, no change till 2022?

Greetings from Hong Kong.... a subsidiary of China Inc.

Indeed.


It’s strange to take this position since trade was one issue where there was large scale agreement in the last election. TPP being dumped. NAFATA roundly criticized. This came from both parties and had wide public support.

In general I am more of a free trader but no one in either party really stood up and made an effective case for it. The stance of Bernie which was co-opted by Hillary (probably with no intention to follow thru) was not really any different.

Most stances even here aren’t willing to say China is doing things fairly, but rather than it isn’t worth it to try and make them do so. That isn’t really compelling.


I doubt fairness has anything to do with it. Trump believes it is zero sum and that is that. We will see how much damage this causes.
 
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GCT64
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:12 pm

bigjku wrote:
It’s strange to take this position since trade was one issue where there was large scale agreement in the last election. TPP being dumped. NAFATA roundly criticized. This came from both parties and had wide public support.

In general I am more of a free trader but no one in either party really stood up and made an effective case for it. The stance of Bernie which was co-opted by Hillary (probably with no intention to follow thru) was not really any different.

Most stances even here aren’t willing to say China is doing things fairly, but rather than it isn’t worth it to try and make them do so. That isn’t really compelling.


I don't think the wide public has any clue, knowledge or valid opinion about the pros and cons of free trade and the implications of protectionism, increased tariffs and a trade war.
I manufacture high tech electronic products and export to many key markets incl. China and import components or assemblies from those markets too, I think I have a pretty good idea about global trade and, yet, I don't think I understand the overall implications of increased tariffs and a trade war.

What I do know... is that a major customer of ours, who uses components we make and export from Massachusetts to China, is going to be hit by increased tariffs on their products (according to yesterday's list) coming into the US. So they are reducing their purchases and forecasts and we will end up reducing production in MA and having reduced sales. Consequence: an impact on the US workforce in MA, which is probably not the outcome that was intended.
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c933103
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:15 pm

fsabo wrote:
bigjku wrote:
Revelation wrote:
They can't out wait China since they have a leader for life.

Short of an unfortunate incapacitation, no change till 2022?


Indeed.


It’s strange to take this position since trade was one issue where there was large scale agreement in the last election. TPP being dumped. NAFATA roundly criticized. This came from both parties and had wide public support.

In general I am more of a free trader but no one in either party really stood up and made an effective case for it. The stance of Bernie which was co-opted by Hillary (probably with no intention to follow thru) was not really any different.

Most stances even here aren’t willing to say China is doing things fairly, but rather than it isn’t worth it to try and make them do so. That isn’t really compelling.


I doubt fairness has anything to do with it. Trump believes it is zero sum and that is that. We will see how much damage this causes.

The official reason, as well as support from both parties on the policy, are because of the IP issue of China and other trade barrier. Maybe some parties, possibly including Trump, don't think it is the fundamental clause behind why they need to enforce tariff against China, but many people in Congress, politicians in parties, perhaps businessmen, and maybe also include future presidents of the US, seems to be rather vocal on this matter.
 
Bobloblaw
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:15 pm

waly777 wrote:
This is unnecessary and will get ugly really quickly.


Why should China be allowed to run $200b trade surpluses with the USA continuously?
 
Bobloblaw
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:16 pm

Jayafe wrote:
bigjku wrote:
waly777 wrote:
This is unnecessary and will get ugly really quickly.


...Is there no problem at all to deal with?


There is a problem indeed, but should be gone by 2021. China and the world need to deal with the mess meanwhile.



Do you think the Dems will run on a free trade with China platform in 2020?
 
estorilm
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:18 pm

bigjku wrote:
Jayafe wrote:
bigjku wrote:

...Is there no problem at all to deal with?


There is a problem indeed, but should be gone by 2021. China and the world need to deal with the mess meanwhile.


Cheeky but dishonest way to avoid the question asked. Does China engage in fair trade or not? And if not should this be addressed?

Exactly! The issues go FAR DEEPER than what we're looking at here. I don't think this (or any) administration is just going to poke a sleeping bear for no reason, but it seems 90% of the forum will disagree with me. :)

By all means, let's just bend over, apologize, and get stomped on.

It's almost too late anyways, these issues should have been addressed DECADES ago, and now almost any attempt at leveling the playing field can/will result in (temporary) backlash - with Amazon and such, China has too much leverage (primary reason they can do whatever they want).

Then again this is negotiation tactics 101... and at the end of the day China knows they need the sales (random, retail, amazon, etc) AND our aircraft, sooo..
Last edited by estorilm on Wed Apr 04, 2018 12:18 pm, edited 1 time in total.
 
vfw614
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:27 pm

Why should China be allowed to run $200b trade surpluses with the USA continuously?


Let's see... Because US customers are not willing to pay the prices that need to be charged for all those good imported from China if they were US-produced? In an ideal world, things would be different, but that is not how global trade works nowadays.
 
bigjku
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:28 pm

GCT64 wrote:
bigjku wrote:
It’s strange to take this position since trade was one issue where there was large scale agreement in the last election. TPP being dumped. NAFATA roundly criticized. This came from both parties and had wide public support.

In general I am more of a free trader but no one in either party really stood up and made an effective case for it. The stance of Bernie which was co-opted by Hillary (probably with no intention to follow thru) was not really any different.

Most stances even here aren’t willing to say China is doing things fairly, but rather than it isn’t worth it to try and make them do so. That isn’t really compelling.


I don't think the wide public has any clue, knowledge or valid opinion about the pros and cons of free trade and the implications of protectionism, increased tariffs and a trade war.
I manufacture high tech electronic products and export to many key markets incl. China and import components or assemblies from those markets too, I think I have a pretty good idea about global trade and, yet, I don't think I understand the overall implications of increased tariffs and a trade war.

What I do know... is that a major customer of ours, who uses components we make and export from Massachusetts to China, is going to be hit by increased tariffs on their products (according to yesterday's list) coming into the US. So they are reducing their purchases and forecasts and we will end up reducing production in MA and having reduced sales. Consequence: an impact on the US workforce in MA, which is probably not the outcome that was intended.


I don’t disagree that most people aren’t qualified to make such a judgment. But in a democracy they are entitled to do so all the same. The alternatives have all proven to generally be worse over time.

It is the people’s government and they are allowed to make what experts might call mistakes with it. I have seen little evidence that being aggressive regarding trade policy wasn’t popular with voters on both sides in 2016.
 
Kikko19
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:42 pm

neomax wrote:
dtw2hyd wrote:
The US imposing tariffs on Chinese made aviation components and China imposing tariffs on US-made planes. It may be a wash for US-China trade. Everyone else pays more???


Not Airbus apparently. The big winner here is Europe.

the Yanks forced Europe to sanction Russia, Iran and other countries ... they will do the same to prevent the commerce with China. I sympathize for the Donald but he's peeing out of the potty this time.
 
frmrCapCadet
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 12:57 pm

TPP was part of the strategy to dealing with Asia. Republicans in general were in favor. Democrats were conflicted (what's new!). The pact, as negotiated probably gave too much power to intellectual property (drugs, entertainment etc). Dropping it left a vacuum. China wins. US consumption and savings rates dictate as a matter of arithmetic that we will have a trade deficit.

Tariffs as announced are a dog's breakfast. They are not targeting China's stealing of US intellectual property. They unduly affect our allies throughout the world. They are ineffective and will not increase US manufacturing, but they can be used for great Tweets, their real purpose.
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Redd
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 1:09 pm

bigjku wrote:
waly777 wrote:
This is unnecessary and will get ugly really quickly.


Interest here are very narrow. I believe a statement like this needs some support. Why is it unnecessary in the long run? Is there no problem at all to deal with?


It'll get ugly and for the USA more so than for China. China can get anything it needs elsewhere while taking a small hit on exports. China is the USA's biggest market when it comes to luxury goods and technology.

The only way America can do any serious damage to China is through some sort of an embargo, which NO country save for Japan will go for with the USA. China has cultivated some very strong relationships in recent years and the USA is alone in this trade war.
 
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Revelation
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 1:16 pm

Bobloblaw wrote:
waly777 wrote:
This is unnecessary and will get ugly really quickly.


Why should China be allowed to run $200b trade surpluses with the USA continuously?

Allowed? Free trade means free trade not equal trade. If one side produces goods with acceptable quality at lower cost overall then one side will run a surplus and the other a deficit. The only way to rebalance trade would be to introduce quotas, but I thought the right was against government regulation and in favor of market rules.

frmrCapCadet wrote:
TPP was part of the strategy to dealing with Asia. Republicans in general were in favor. Democrats were conflicted (what's new!). The pact, as negotiated probably gave too much power to intellectual property (drugs, entertainment etc). Dropping it left a vacuum. China wins. US consumption and savings rates dictate as a matter of arithmetic that we will have a trade deficit.

Tariffs as announced are a dog's breakfast. They are not targeting China's stealing of US intellectual property. They unduly affect our allies throughout the world. They are ineffective and will not increase US manufacturing, but they can be used for great Tweets, their real purpose.

The IP cat is out of the bag. One trip to Guongzhou is all it takes to figure that out. Short of the US marines taking over the place and levelling it, you need to figure something else out. Maybe Trump will visit after he goes to North Korea?

We had leverage back in the Bill Clinton era but Sam Walton wanted cheap shit from China so Clinton did his Arkansas homie a solid and all of a sudden the evil red empire became the most favored nation.
Wake up to find out that you are the eyes of the world
The heart has it's beaches, it's homeland and thoughts of it's own
Wake now, discover that you are the song that the morning brings
The heart has it's seasons, it's evenings and songs of it's own
 
BHXLOVER
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 1:25 pm

Bobloblaw wrote:
waly777 wrote:
This is unnecessary and will get ugly really quickly.


Why should China be allowed to run $200b trade surpluses with the USA continuously?


Because China is the manufacturing powerhouse of the world, whether we like it or not.

Many countries will have a trade deficit with China. In 2016 the UK deficit with China was £25.4 billion, And we are a small country.
 
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Jayafe
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 1:35 pm

Bobloblaw wrote:
Why should China be allowed to run $200b trade surpluses with the USA continuously?


Revelation wrote:
...but I thought the right was against government regulation and in favor of market rules.


Free market rules apply to everything, the market is wise auto regulating itself. As long as the winning hand is always on the same side, of course :banghead:
 
B777LRF
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Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 1:52 pm

Bobloblaw wrote:
Why should China be allowed to run $200b trade surpluses with the USA continuously?


Because, trade. It means exchanging goods or services for remuneration and US/China is a perfect fit; one's got the money, the other got the goods in cheap and abundant numbers, and there's but a 14-day trip by sea separating them. Really, it couldn't be any other way.

A somewhat more philosophical answer would be to check with your large corporations. They're the one's who grew China into the economic powerhouse it is today, by outsourcing and growing production there instead of home. Politically, you could say that - having successfully transformed China from a large agrarian hard-core communist tyranny into an industrial juggernaut, where Dollar is king and the oppression has been somewhat toned down - the EU and US will have to accept them as equal partners. Which means you can't react too overtly when they engage in a spot of bullying, as is the nature of every economic powerhouse to have ever existed. The US and, lately, EU are not shy of throwing their weight about if that's what it takes, and the point is you don't go poking the bear unless you're ready to be mauled.

Keep in mind these tariffs are not just on aeroplanes, they're also directed as something as mundane as soybeans. Might not sound like a lot, but commercial aircraft and soybeans are two of the largest US exports to China.

So if you wan't to have a trade balance with China, ask yourself first if you're willing to change places with the average Chinese doing something similar to what you're doing now, be it growing up, studying, working or having retired.
From receips and radials over straight pipes to big fans - been there, done that, got the hearing defects to prove
 
tommy1808
Posts: 8116
Joined: Thu Nov 21, 2013 3:24 pm

Re: China announces 25% tariff against some US-built planes

Wed Apr 04, 2018 2:23 pm

dtw2hyd wrote:
The US imposing tariffs on Chinese made aviation components and China imposing tariffs on US-made planes. It may be a wash for US-China trade. Everyone else pays more???


Boeing Aircraft containing Chinese made components the USA just slapped tariffs on get more expensive for everyone, those Boeing aircraft included in the Chinese tariff get especially more expensive in China.

Airbus prices stay the same. More business for Airbus in general and Airbus´s China branches even more.

Bobloblaw wrote:
waly777 wrote:
This is unnecessary and will get ugly really quickly.


Why should China be allowed to run $200b trade surpluses with the USA continuously?


because if China doesn´t use the money to buy US treasury bonds, who is going to fund your budget? Unless the US starts tot tax its own citizens enough to balance the budget, those bonds can either be bought by US citizens in the US, depleting available capital in the US (increasing cost of credit, less money for investments) or foreign entities.

Without a trade imbalance foreigners don´t have USD to buy treasury bonds.

The sum total of all trade deficits is = the sum total of foreign held US debt plus direct foreign investments in the USA.

As long as the inflation rate stays above the average interest rate, a trade deficit means you getting stuff effectively for free.

best regards
Thomas
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