How Americans Are Losers In The US-China Trade War
Summary
TLDRThe script discusses the impact of U.S. tariffs on China, highlighting the complexities of global supply chains. It points out that most iPhone components are from other countries, not China, and that tariffs could hurt American businesses more than Chinese. The potential for job losses and business disruptions in the U.S. due to increased costs is also emphasized.
Takeaways
- 🌏 The U.S. has imposed tariffs on $250 billion worth of Chinese products and threatened more on $267 billion, reflecting a significant trade dispute.
- 📱 President Trump suggested that Apple should manufacture iPhones in America to benefit from potential tax incentives, highlighting a push for domestic production.
- 🤔 Despite Apple's design and marketing efforts, most iPhone components come from various global companies, not China, which only serves as the assembly plant.
- 💼 The actual cost of manufacturing an iPhone in China is minimal, with only $8.46 or 3.6% of the total cost attributed to Chinese parts, suggesting limited impact from tariffs.
- 🚀 Tariffs could potentially benefit competitors like Samsung, as iPhones could become more expensive in the U.S. market, altering competitive dynamics.
- 🏭 U.S. firms are facing disruptions due to increased costs from tariffs on steel and aluminum, impacting major industries like automotive manufacturing.
- 🔩 The auto industry, including companies like Ford and General Motors, has been adversely affected by higher material costs, leading to significant financial losses.
- 💡 Tariffs might lead to job losses in the U.S. steel manufacturing industry, with estimates suggesting a loss of five jobs for every one saved by tariffs.
- 🌐 American companies manage 60% of China's high-valued exports, indicating that tariffs could disproportionately affect U.S. businesses rather than Chinese ones.
- 🛠️ Many manufacturers rely on global supply chains for components, and tariffs can hurt various producers at different stages, including American companies.
Q & A
What is the primary concern expressed in the script about China's economic activities?
-The script expresses concern over China's economic activities, particularly accusing China of 'raping' the U.S. economy through what is described as the greatest theft in history.
What actions has the U.S. taken in response to China's economic activities as mentioned in the script?
-The U.S. has imposed tariffs on 250 billion U.S. dollars worth of Chinese products and has threatened additional tariffs on another 267 billion U.S. dollars worth of products.
What is the role of Apple in this context, as suggested by the script?
-The script suggests that Apple could benefit from manufacturing iPhones in America due to potential tax incentives, which could lead to zero tax, as suggested by President Trump.
What are the main components of an iPhone and where do they come from according to the script?
-The main components of an iPhone, such as the touchscreen display, memory chips, and microprocessors, come from various countries around the world.
Outlines
🌐 Impact of Tariffs on Global Trade and Manufacturing
This paragraph discusses the consequences of the U.S. imposing tariffs on Chinese products, amounting to 250 billion U.S. dollars and threatening an additional 267 billion. It highlights the nationalist sentiments invoked by President Trump, urging companies like Apple to manufacture domestically for tax incentives. The paragraph also delves into the intricacies of the iPhone's production, revealing that most components come from various international companies, not just China. The assembly in China and subsequent export to the U.S. contributes to the trade deficit, but the actual cost attributed to China is minimal. The potential for increased costs and disruptions in the U.S. due to these tariffs is also explored, particularly in industries like automotive and steel manufacturing, where companies like Ford and General Motors face significant financial impacts. The broader implications of these tariffs on American businesses and the global economy are emphasized, suggesting a complex and interconnected web of trade relations.
🛠️ Tariffs and Their Ripple Effects on American Companies
This paragraph examines the broader implications of tariffs on American companies, particularly those involved in manufacturing and exporting. It points out that 60 percent of China's high-valued exports are managed by American companies, suggesting that tariffs may disproportionately affect these businesses. The narrative focuses on the challenges faced by manufacturers who rely on imported materials, such as hinges, screws, and other components, which are often sourced from China. The paragraph also touches on the potential for increased costs and reduced quality due to these tariffs, as seen in the case of a fishing boat manufacturer in Florida. The potential long-term damage to industries that may shift their manufacturing operations abroad due to competitiveness issues is highlighted, painting a picture of a complex economic landscape where tariffs can have far-reaching and unintended consequences.
Mindmap
Keywords
💡Intellectual Property Theft
💡Tariffs
💡Trade Deficit
💡Apple
💡Assembly Plant
💡Components
💡Design, Marketing, Distribution
💡Factory Cost
💡Steel Tariffs
💡Disruption
💡American Companies
Highlights
China is accused of economic theft by the U.S., with tariffs imposed on billions of dollars worth of Chinese products.
Apple is urged to manufacture iPhones in America for potential tax incentives.
Most iPhone components are sourced from American, Japanese
Transcripts
we can't continue to allow China to rape
our country and that's what they're
doing it's the greatest theft in the
history of the world the u.s. is slapped
tariffs on 250 billion US dollars worth
of Chinese products and has threatened
tariffs on 267 billion US dollars more
Trump invoked nationalist sentiments
when he tweeted that Apple should start
manufacturing iPhones in America as this
could give them a huge tax incentive
there could be zero tax she said urging
Apple to start building new plants in
America from the president's angle he
looked at the overall trade deficit of
America but he doesn't quite realize is
that China is the assembly plant of the
world most components that make up the
iPhone like the touchscreen display
memory chips and micro processors come
from American Japanese Korean and
Taiwanese companies Intel Sony Samsung
and Foxconn none of the parts
manufactured in China Apple buys the
components ships them to China while
China exports the fully assembled
iPhones yet these appear as imports from
China and it's trade balance with the US
what Apple has is the design the
marketing the distribution it places the
order but it doesn't produce anything
that's what Apple is so profitable it
doesn't put its money into plants and
equipment in labor force it controls the
distribution network then that's where
all the money is being made but could
America really gain much for
manufacturing iPhones on their soil a
closer look reveals the true picture
the factory cost of an iPhone is around
237 US Dollars and estimates from IHS
market when iPhone 7 was released in
late 2016 American parts make up the
largest share of the total with just
8.46 u.s. dollars or 3.6 percent of that
costs actually going to China if in fact
there is a terror or 25 percent so Apple
be scrambling to assemble it elsewhere
now who do you think will benefit if
that happens
South Korea Galaxy it Samsung would be a
huge beneficiary
[Music]
because all of a sudden iPhones will
become 25% more expensive in the u.s.
Trump's tariffs also come at a cost for
American firms which are facing
potentially devastating disruptions to
their businesses in March 2018 Trump
imposed a global tariff of 25 percent on
steel and 10% on aluminium imports
adversely affecting the auto industry
one of the largest US automakers Ford
lost 1 billion dollars in profits while
its second quarter earnings plums - I
almost 50 percent as sales in China fell
for General Motors higher metal spices
would add about 600 to 700 million
dollars to costs it is also estimated
the Trump's tariffs could cost in many
400,000 to milk
25% is a very very steep cost barrier to
have to overcome in order to be
competitive steel prices in the United
States increased substantially almost
overnight Titan Steel Corporation a
family-owned business is a global
distributor specializing in tin mill and
surface critical steel products used in
metal packaging and food paint and
aerosol cans they are a substantial
exposure to over 30 countries and an
importer of steel from around the world
impacted us in several ways we are a
major customer of the producers of our
types of steel in the United States but
those prices went up as well whether we
were purchasing from us domestic steel
producers or whether we were importing
our costs went up by the same amount
added to the increasing costs by 25%
there is the worrying aspect of loss of
jobs in the steel manufacturing industry
it is estimated that five US jobs will
be lost for every one saved by the post
tariffs for about one hundred and forty
six thousand jobs in total
very few manufacturers produce a
finished product solely with components
that they produce themselves they get it
from every Twitter and he be give the
raw materials it could be iron steel
aluminum or copper but then you talk
about semiconductors and transistors and
LCDs and memory chips and everything
else so when you start putting tariffs
and you think you're actually hurting
China or somebody else you're actually
hurting a whole range of producers at
various stages and many of those are
American companies but people don't
realize is that 60 percent of China's
high-valued exports our action managed
by American companies so these tariffs
actually hit American companies more
than they hit Chinese some of these
materials right here the hinges and the
the screws itself we can't buy them in
the United States we buy it from the
distributor here in the US but they
source them from China you're putting on
the tape is this because you want Chad
kovorix company action craft books makes
high performance shallow water fishing
boats established over two decades ago
this small and medium sized manufacturer
operates out of the 25 thousand square
foot facility in Cape Coral Florida so
at first when the ax terrorists were
announced with the other countries I was
pretty excited because I knew that
President Trump had the best interest in
America to even the playing field out so
to speak with raw materials and in
consumer goods once we got into it
obviously the the excitement went down a
little bit because you start to see it
impacting you
for example these rod holders might come
from from China again the hinges and the
screws the latches the door locks we
come from China the prices increased in
the last 12 months causing an 8% surge
in the retail price of the balancer we
import stainless steel which is a lot of
hardware screws nuts and bolts and that
stuff we did see the spike in that and
we also seen the quality go down we also
seen aluminum that we make you know arty
tops and our our seats and everything
from that had went up in 2018 very
customized elevated an avid butcher
since his teenage years
Chad hopes that the trade wall would in
say if we don't make a true agreement
and everything is settled and in writing
so to speak I could see this hurting us
a little bit more you know as time goes
by especially if the raw materials keep
going up and raw materials are more than
50% of what goes into the cost of my
boat the damage which has been done is
irreversible if you have steel consuming
industries who as a result of being
uncompetitive make the decision to
transfer their manufacturing operations
to a different country we are already
seeing that in certain cases in the
United States and that is a very
disturbing trend
[Music]
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