How Americans Are Losers In The US-China Trade War

Summary

The 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

00:00

🌐 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.

05:02

🛠️ 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.

Keywords

💡Intellectual Property Theft

Intellectual property theft refers to the unauthorized use or misappropriation of someone else's intellectual property, such as patents, trademarks, copyrights, or trade secrets. In the context of the video, it is used to describe the accusation that China is unfairly taking advantage of the U.S. by using its intellectual property without permission. This is a significant issue in the ongoing trade disputes between the two countries.

💡Tariffs

Tariffs are taxes imposed on imported goods, which are meant to protect domestic industries by making foreign goods more expensive. The video discusses how the U.S. has imposed tariffs on Chinese products, aiming to counteract the perceived unfair trade practices. This is a central theme in the video, as it explores the economic implications of these tariffs on both countries.

💡Trade Deficit

A trade deficit occurs when a country imports more goods and services than it exports. The video mentions the U.S. trade deficit with China, suggesting that the U.S. is losing out in the trade relationship. This is a key point in the discussion about why the U.S. might be implementing tariffs and other trade measures.

💡Apple

Apple Inc. is a multinational technology company known for its electronics, particularly iPhones. The video uses Apple as an example to illustrate the complex global supply chains in manufacturing, where components come from various countries, including the U.S., Japan, Korea, and Taiwan, and are assembled in China. This example shows how tariffs can affect not just Chinese products but also multinational corporations and their supply chains.

💡Assembly Plant

An assembly plant is a facility where components are put together to create a finished product. The video refers to China as the 'assembly plant of the world,' highlighting its role in the global manufacturing process. This term is crucial in understanding the video's discussion about how manufacturing and assembly are distributed globally, affecting trade balances and economic dependencies.

💡Components

Components in this context refer to the individual parts that make up a product, such as the touchscreen display, memory chips, and microprocessors in an iPhone. The video emphasizes that many of these components are sourced from various countries, not just China, which complicates the issue of where value is added and where products are 'made.'

💡Design, Marketing, Distribution

These terms collectively refer to the strategic aspects of a product's lifecycle that involve creating, promoting, and selling the product. The video points out that while Apple designs and markets its products, it does not manufacture them, which is a significant factor in its profitability. This highlights the separation between product creation and physical production in the modern economy.

💡Factory Cost

Factory cost is the total cost incurred in manufacturing a product, including labor, materials, and overhead. The video mentions the factory cost of an iPhone and breaks down the costs associated with different countries' contributions, showing that a relatively small portion of the cost goes to China. This is used to argue against the effectiveness of tariffs in addressing the trade deficit.

💡Steel Tariffs

Steel tariffs are taxes specifically imposed on imported steel. The video discusses how these tariffs, imposed by the U.S., have affected the auto industry and other steel-consuming industries. This is an example of how trade policies can have unintended consequences, such as increased costs and potential job losses in domestic industries.

💡Disruption

Disruption in this context refers to the negative impact on businesses caused by sudden changes in trade policies, such as tariffs. The video mentions how U.S. companies like Ford and General Motors have been adversely affected by increased costs due to steel tariffs, leading to financial losses and potential job reductions.

💡American Companies

The video emphasizes that many high-valued exports from China are actually managed by American companies. This point is crucial in understanding the complex interdependencies in global trade. Tariffs and trade barriers can hurt not just foreign companies but also American businesses that rely on these global supply chains.

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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