Trade War With China?

[Dien Rice]

Hi Millard,

I'm expecting a lot of business bankruptcies in the next few months and year...

Why?

Huge tariffs on China... There are a lot of small-to-medium sized American businesses that have their proprietary products manufactured in China.

A tariff is a tax on the imported product... It is paid by the importer - generally an American company. It is not paid by China! (Despite what Donny says...)

That means Donald Trump's huge taxes (tariffs) will eat up all these companies profits. They'll be forced to raise prices, which will kill their sales...

Why not just move to a factory in Vietnam, say? Well, the big companies are doing that. It's harder for smaller companies... Vietnam is already swamped because of companies moving their operations from China. The factories there don't want to do small orders, when they are already swamped with huge orders... Which leaves small-to-medium businesses screwed... while huge corporations will be fine...

Trump will even make exceptions on the tariffs for huge companies (like he has done for Apple, both in the past and present)... He doesn't make exceptions for small-to-medium sized businesses...

Here's an article about this, from the WSJ...

The CEO Who Says an Asteroid Is Coming to Destroy America’s Businesses
https://archive.md/tU52D

Where's the opportunity?

These companies that get wiped out... There is an opportunity to acquire their "toll positions" (eg their patents or other proprietary products) cheaply, either before or after they go bankrupt...

That's just the way it is...

I see what Trump is doing as in fact a wealth transfer from small and medium sized businesses, to huge corporations and billionaires... Though some of us "little guys" can also profit as our fellow small-to-medium sized business friends get wiped out...

Dien

Originally Posted by Millard Grubb

President Trump signed an executive order that essentially says that the US will not buy goods from anyone who buys oil from Iran.

China buys a lot of oil from Iran.

Does this mean we won't buy goods from China anymore?

Seems like a stretch. Did you know that 95% of the ibuprofen is produced in China? Along with millions of other items. Perhaps President Trump is just using this as a negotiating tactic.

How does this affect us as marketers?

I can imagine putting together a special report for clients that would focus on how world events might affect supply and demand in the local economy or specifically in each client's business.

You could also find out what products are typically used in business that come from China and make a list for your clients telling them to stock up now.

You could go to local business groups and offer a report on how to thrive even when the economy looks like it is going to take a hit.

You could take a look at making fast money for businesses by using some Jay Abraham techniques to find hidden cash. (Glenn Osborn has a report on. this.)

Business owners might be worried... just go and talk with them and be friendly without trying to hard sell them... you'll get business soon enough.