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I anticipate Chinese made tools & machines will soon rise in price

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Forum topic by Planeman40 posted 05-02-2016 03:38 PM 1973 views 0 times favorited 30 replies Add to Favorites Watch
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Planeman40

805 posts in 2226 days


05-02-2016 03:38 PM

Topic tags/keywords: tools machines machine cost tool cost

I am 75 years old and have seen a lot. I watched the Japanese undercut the USA prices while making excellent cars and machines during the 1970s and early 1980s. I also watched the Japanese prices rise to equal USA cars and machines in the late 1980s and 1990s. I am now watching the same scenario with China. Add to that the very good chance that Donald Trump will soon be President and will demand parity on prices with China. I have read his thoughts on this before and I did again this morning. From the BBC:

”Mr Trump, in his campaign manifesto, pledges to “cut a better deal with China that helps American businesses and workers compete”.

He sets out four goals that include immediately declaring China “a currency manipulator” and putting “an end to China’s illegal export subsidies and lax labour and environmental standards”.

Latest figures from the US government show the trade deficit with China reached an all-time high of $365.7bn (£250.1bn) last year. By February this year, it had already reached $57bn.

There was no immediate response from Beijing to Mr Trump’s comments, but he is seen by many in China as an inspiration rather than an antagonist, says the BBC’s Vincent Ni.”

To add to this, China is experiencing a demand for higher wages and better working conditions which will continue to drive up the cost of Chinese made goods.

So I recommend to those of you who are building your shops to expect a considerable price rise in woodworking machines and tools in the next couple of years.

Me, I already have a very complete metal and woodworking shop that I have accumulated in the past 60 years when everything was much more expensive in comparable dollars. You are presently living in a “woodworker’s heaven” with tons of top grade but cheap tools and machines. But like everything else, nothing is forever. I am convinced the “good times” are about at an end.

Planeman

-- Always remember: It is a mathematical certainty that half the people in this country are below average in intelligence!


30 replies so far

View Bill White's profile

Bill White

4456 posts in 3426 days


#1 posted 05-02-2016 04:00 PM

As my Dad always said, “Water seeks its own level”.
I fully expect to see the China issue to be a major economic shifting format. The Chinese see the rest of the developed world as a living standard to be desired.
Who knows what the Chinese worker will “demand” in the future?
Bill

-- bill@magraphics.us

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Rick M

7923 posts in 1845 days


#2 posted 05-02-2016 04:33 PM

If Trump is elected then I hope he does it but I doubt it. I suspect he believes he will be a shot caller but the president can only do so much. Everyone in power wants to keep the status quo, that’s why Hillary is getting money hand over fist. Outsiders like Bernie and Trump are unwelcome. If it happens though, the value of old iron will go up to.

-- http://thewoodknack.blogspot.com/

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TravisH

452 posts in 1400 days


#3 posted 05-03-2016 01:58 AM

China prices go up and ….. no big deal we get flooded with products made from India…. and so it continues….

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runswithscissors

2189 posts in 1490 days


#4 posted 05-03-2016 02:24 AM

Planeman, I think you are right. It could, as a consequence, bring back some manufacturing to the US. Labor that starts out cheap doesn’t stay that way. Which is a good thing, I think. Remember how H. Ford started paying $5 a day (which pissed off the other tycoons), so his workers could buy the cars they were building?

-- I admit to being an adrenaline junky; fortunately, I'm very easily frightened

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mahdee

3553 posts in 1233 days


#5 posted 05-03-2016 03:04 AM

++


China prices go up and ….. no big deal we get flooded with products made from India…. and so it continues….

- TravisH


-- earthartandfoods.com

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JoeinGa

7483 posts in 1472 days


#6 posted 05-03-2016 11:54 AM

I worked for 10 years in manufacturing (plastics, hair care items) and towards the end we started buying a LOT from Asia due to costs. Biggest issue I saw was if we had an “emergency” order we could change gears at the plant and shift other people to get the job done very quickly…. whereas an emergency order when we were importing from China STILL spent a month on the sea in shipping. (Unless of course we wanted to pay for air freight which ate up about 99% of the profits anyway)

It eventually led to the company importing 99% of the line today, versus we were manufacturing 80% and only importing 20% back in the 90s.

-- Perform A Random Act Of Kindness Today ... Pay It Forward

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Planeman40

805 posts in 2226 days


#7 posted 05-03-2016 11:56 AM

Keep in mind that we here in the USA had our heyday beginning just after WW-2 up until the mid 1980s. Pretty much the entire industrialized world was left in ruins and needed to rebuild and the USA was the only industrialized nation left to supply the rebuilding. We had the goods and there was no competition! Unions got greedy and demanded constant wage increases, retirement benefits, and easy working conditions. Manufacturers had no competition except other manufacturers within the USA who had the same union demands and that made for a level playing field. I remember when the auto union made it a practice to strike a different auto manufacturer (of which there were only three major ones – Ford General Motors, and Chrysler) every three years. The auto manufacturers gave in to the demands as they knew their competition would be facing the same demands very soon. The “playing field” was kept even. This all went well until the Japanese entered the car market in the late 1970s and vastly undercut the USA car manufacturers. It hasn’t been the same ever since.

I lived through all of this and watched it happen.

Planeman

-- Always remember: It is a mathematical certainty that half the people in this country are below average in intelligence!

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Tideline77

58 posts in 237 days


#8 posted 05-03-2016 01:20 PM

with the Chinese economic engine slowing down they will probably stay very competitive externally , while internally their citizens adjust to a higher standard of living and the age of consumerism.

I do agree the labor rate has risen and will continue , as it has in other countries

will the manufacturing migrate to the next low wage under developed countries ?

I can only assume it will.

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gargey

482 posts in 241 days


#9 posted 05-03-2016 01:43 PM



Planeman, I think you are right. It could, as a consequence, bring back some manufacturing to the US. Labor that starts out cheap doesn t stay that way. Which is a good thing, I think. Remember how H. Ford started paying $5 a day (which pissed off the other tycoons), so his workers could buy the cars they were building?

- runswithscissors

That’s nonsense. He paid $5/day because the work was grueling and repetitive and that’s what it took to get them to do the job. If he paid them market dayrates they’d do something less difficult.

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Redoak49

1953 posts in 1454 days


#10 posted 05-03-2016 03:23 PM

We will not get jobs back. The energy policy will increase costs here while Asia will continue with cheaper coal fired power plants. China has a bunch of these plants in the planning stage.

Unfortunately, between energy, labor ,taxes and policy, it will be almost impossible to be competitive.

View Waldo88's profile

Waldo88

188 posts in 762 days


#11 posted 05-03-2016 04:00 PM

Why would the US even want to be competitive in the consumer goods manufacturing market?

There are much better markets out there that the US dominates in. Tech, entertainment, finance, etc…

On the subject of cars… the US is ground zero in the auto revolution, the first two affordable long-range electrics are American (Bolt, Model 3). Its starting to look like getting a Model 3 will be about like getting Green Bay Packers season tickets, the waiting list is looooooong.

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Ger21

1047 posts in 2596 days


#12 posted 05-03-2016 04:03 PM

Jobs are gone because cheaper labor makes stockholders more money. No, they are not coming back.
And if you add huge tariffs to Chinese products, the American people will start screaming when almost everything they buy goes up in price by 25%-50%.
You can’t have your cake and eat it too.
You can’t have low priced goods and good paying jobs.

-- Gerry, http://www.thecncwoodworker.com/index.html http://www.jointcam.com

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MrRon

3926 posts in 2709 days


#13 posted 05-03-2016 05:00 PM

The most important item is machine tools; not the home shop type, but industrial machines that make our consumer goods and our home shop tools. Nothing is hand made anymore; it is all done by machine, so if the machine is high quality, then it doesn’t matter whether an item is made in China, India or anywhere in the world. You can get an unskilled Chinese or Congolese or Mexican to operate a machine, but the machine does all the work. It no longer depends on skilled labor to produce goods. That said; countries must invest in the very best machinery. In that way, “Chinese junk” would no longer be applicable. Some high quality items that come from China are the result of their investment in high quality machinery. Some poor quality items are the result of inferior materials being used and lack of quality control. You only get what you pay for. If you want quality, you have to pay for it. No one is going to give you more than what your ask (and pay) for. That is the fault of the U.S. company trying to maximize profits. A typical contract with a Chinese company might read thusly:

“Make 5 million widgids at the lowest price; use leftover scrap material if possible. Make it look good on the outside. It only has to last for a year at the most. This contract is fixed price.”

View DrDirt's profile

DrDirt

4169 posts in 3207 days


#14 posted 05-03-2016 05:26 PM



Why would the US even want to be competitive in the consumer goods manufacturing market?

There are much better markets out there that the US dominates in. Tech, entertainment, finance, etc…

On the subject of cars… the US is ground zero in the auto revolution, the first two affordable long-range electrics are American (Bolt, Model 3). Its starting to look like getting a Model 3 will be about like getting Green Bay Packers season tickets, the waiting list is looooooong.

- Waldo88

Outsourcing decisions are based on slim changes in costs, especially on commodity products.
Somthing that retails for 3 bucks… a 2 cent cost difference = closing the factory and moving to china.

It is not about HUGE gaps like American made vs Harbor Freight pricing.

I don’t believe we are dominating in the other areas…Banking and Finance are moving to Asia as well.
All the tech is made there as well – like Apple with Foxxcon

AMC and Carmike Cinema is Chinese
http://www.wsj.com/articles/amc-entertainment-buy-carmike-cinemas-1457050915

China is on a buying spree here, buying hotels, food production (Smithfield Foods) etc.

Trump’s tarriff would only need to be 5% or so, to shift decisions on outsourcing. Like Ford moving to Mexico, the labor savings is not going to equal 5% of the new car price crossing the border.
Same with Nabisco and others.

Talking about a small shifting of the tide, not blowing up the dam.

-- 'Political correctness is fascism pretending to be manners' ~George Carlin

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JKMDETAIL

172 posts in 1120 days


#15 posted 05-03-2016 05:27 PM

I do know this, Steel prices are rising due to tariffs put in place on foreign steel imports. This allows domestic steel companies to compete and become more profitable. This in turn helps keep jobs at home for those that do not have a college education. These are the people who fund the base of our economy. Without an income…...

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