How Tariff Tensions Transformed China’s Toy Factories | WSJ
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- Опубліковано 16 гру 2019
- Americans might be getting lower-quality toys for the same price this Christmas, despite a limited U.S.-China trade deal. WSJ toured the Chinese city that churns out Frozen and Peppa Pig gadgets to understand the impact of tariff threats.
Photo: AP Photo/Ma Ka.
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#WSJ #TradeWar #Toys
Most Americans think Made in China things are junk, not true only the person who order the goods from the factories order junk. The same factory can produce higher quality goods, just the buyer isn't willing to pay for the higher end goods.
Nope. Just JUNK.
@Nathan Anderson I'm glad to see sell you garbage. You have no choice. You use our garbage and we don't use it. We make some garbage and sell it.
@Nathan Anderson Because this is the low cost of quality caused by tariffs, harmful raw materials are sold to you to pollute the United States. How does that sound?
@@ridumrai6919 so iphone is junk huh?
@@brighteous1208 So best quality drones from DJI are junk huh?
Microscope with plastic lens instead of glass... well the good news is - the price is still the same!
Bad for the environment
Dang that Johnny guy is an excellent businessman
MrDave22r agreed! What a Brilliant mind!
Well @4:28 kinda sucks...
congratulations to all American consumers
Would you buy that junk? So if it's cheap it's not all about price
excellent businessman, terrible human being
4:42 "because we use robotic arms to replace more than half of our employees" ... now that's some straightforward talk
Yup, I have seen a factory just add robot arms, keep the actual sheet bending equipment and can mass produce the needed parts faster.
Automation😕
Either way, it is happening
If you want to be more even straightforward replace the word employees with prison labor.:
www.ft.com/content/1416a056-833b-11e7-94e2-c5b903247afd
Prison labour is common in China, where the law states that prisoners able to work must do so - a system known as “reform through labour”. China is home to around 2.3m prisoners and pre-trial detainees, according to the Institute for Criminal Policy Research, giving it the world’s second-largest prison population after the US.
Exporting prison-produced goods is illegal under domestic and international trade laws. Yet evidence of prison labour is present in many of China’s supply chains, from handbags to washing machines, according to experts and ex-prisoners.
“Most of the companies set up under prison provincial administration bureaus in China look, from the outside, like ordinary companies,” says Joshua Rosenzweig of Amnesty International in Hong Kong.
That's what he has to do in the long term unless he wants to outsource to Vietnam or Indonesia.
You know the SHTF when Chinese workers are losing jobs to Automation.
They will be making the robots
*most large old-timey media companies are terrible at UA-cam, WSJ seems like they might be getting the hang of it!* 💪🌚
you mean CNBC and Bloomberg?
HEY VITO VITOOOO
@@teamoptimistic9440 hey
@Heather Larson
congratulations to all American consumers
Old-timey media? You're an idiot and so are the people who made this.
This is bubble soap 🙌
In 2020 toy microscope: with out lens
But good news price is same.
When it comes to money..quantity will always take president over quality. I learned that in the automotive industry.
Exactly, this whole video made next to no sense logically, they are afraid prices will go up due to tariffs ... So they lower the production cost ...
Without lowering the sale price ...(and in turn the retail price after tariffs).
"We build item A at a production cost of $30, we fear the retail price will rise to $90 so we reduced production cost by $10 lowering it to $20 to product each unit."
Original price:
$30 (for production) $70 (retail price) =$40 profit
Now
$20 (for production) $70 (retail price) +$20 tariff = $50 profit and $20 in tariffs for the government.
This would make sense if they absorbed the cost of the tariff but that is not the case, consumers pay the tariff all this change has does is increase the producers profit margin while they turn around and blame the US government for them producing a lower quality product at the same retail price (minus tariffs).
The savings from lowering the production cost was never past down to the consumer to counterbalance the tariffs to the original $70 retail price. So really the only thing which has changed is lower production cost with them increasing their own profit margin because of it. They act like this change is required to keep the price the same as the original price after tariffs but that's not the case they lowered the production cost to increase their profits and nothing else.
This video is misleading and dishonest yet WSJ happily plays along.
@@GainingDespair yea that's not exactly how it works. What about shipping cost, storage cost etc... Not to mention the tariff amount is determined by the cost of the good. So a product that costs $20 to produce has a lower tariff than a product with a $30 cost to produce. Then you factor in different tariffs depending on the raw material of the product, for instance plastic vs glass products have different tariff amounts. While yes, they generally pass much of this cost to the end consumer they cannot pass 100% of it because people wont stand for too much of a price hike right away. So generally speaking the margins do become thinner when tariffs happen.
In your second example the retail price wouldn't be $70 if it has a $20 tariff it would be $90 , if it was still $70 retail it would be $30 profit not $50. And even then it wouldn't be $30 profit unless your including, shipping storage etc... as part of the production cost. Essentially you math doesn't make sense.
@@BroomerangFPV Irrelevant, regardless if it is the manufacturer or the 3rd party who purchased the toys directly someone was already paying for shipping and storage either way so the expenses was still included in the original $70 price tag.
Tariffs are not an expense which is paid on export by the manufacturer but the third party who purchased the item from them and imports it. Tariffs or not it does not effect the manufacturer in this equation but the the company who sourced the product and the final buyer of the goods.
Be it $1 tariff or $100 it does not effect the manufacturer in this situation only the other parties. If they produced the product in the US and sent it to market themselves than it would effect them (even tho this would make it a "Made in the USA" product and than exempt from tariffs) but once again not the case even tho they try to suggest it as it would simply raise their profits by cutting out the middle man and pocketing their original profit from the sell themselves.
Importer pays tariff, if the seller is the exporter how could they possibly be the importer as well? They can't which is why the tariff costs them a grand total of $0.
When China ships products to the US they are not paying us to accept them, tariffs are charged after the fact by the parties who purchase the item.
Unedited Gamer but that changes your profit now doesn’t it
Unedited Gamer not to mention you just ignored everything else I said that was wrong with your math haha, what a joke of a reply
"in case of tariff the quality will be lower to keep the price low" wel... da!
fact is : American consumers can't afford high quality products , even before the trade war
@@LeeLee-ch8if "we are the greatest country in the world"
If the Chinese make their quality any lower, the products will probably fall apart during unboxing!!!
@@ameyas7726 blame Trump , we didn't start this trade war
@@LeeLee-ch8if the CCP started the trade war 30 years ago.
was really hoping for the “bubble soap...toys”
The D.Va robot LOL！
4:54 Tesla Cybertruck miniature.
Guilherme Fernandes I guess that’s how Elon musk gets the idea from.
WSJ seem to get youtube very well. This is extremely well produced!
their reporters stationed in China long ago , just a matter of producing videos instead of text articles
Mainstream News Took MILLIONS From China To Run Fake Articles That Were Really Propaganda
ua-cam.com/video/ffwRnoAEzhA/v-deo.html
5:50 He ment there are always corners they can cut.
New bicycles when I was a child in the 1970's were $60 -$80... A drill bought by my grandfather in the early 1950's cost 59.99... it still run and is used multiple times a week... what has actually been gained through the systemic destruction of AMERICAN MANUFACTURING? Nothing more than a rise in the transportation (millions of tons of CO2) of these items from one place to another.
That's because Americans want desk jobs.
That’s because Americans want some level of decent wages. Can’t make cheap stuff with expensive workforce Karen.
I think for 90 dollars we can get a real students microscope in India
When you reduce the quality of materials, that is lowering quality not being more efficient. It is just meeting a price point for selling.
That is many people missundertood.
Welcome to Capitalism.
And new quality would remain even if tariffs disappear, just like the wages after 2008.
Money doesn't grow on trees.....
Peace Well, he didn’t say that the improved efficiency was on the process.
China can make anything to spec. If you order low quality you get low quality.
If you order high quality, you can get that too.
As someone who has worked as a retail manager in a big box store for 15 years, I can say with high assurance that this trend has been present since before the "trade war". Prices on major appliances and consumer goods have been rising for years and product quality has been declining. We have been paying more for lower quality products for a long time now. It's nothing new.
That isn't true durable goods last extremely long periods of time and electronic devices like televisions are extremely reliable while getting cheaper and cheaper so you are incorrect
Inflation
@@chris0000924 Definitely a factor, but I doubt it is the cause of all the price increases I've seen
@@moderatesunited The fact that durable goods are durable doesn't mean prices on them remain stable. The fact that TVs are affordable is cool, but it's not something I have direct experience with.
@@DesertedCreationsTucson
Disinflation, shrinking product or lowering quality to maintain price point
Do you really wanna know what will fix this kind of a problem make the toys in their perspective countries for their perspective countries that means China should make toys in China for China United States should make toys in the US for the US then you don’t have to worry about tariffs problem solved
The thing is the tarrifs will still be needed for the resources used in the production process. Firstly, you'd still automate the factories in both countries so no job creation and you still need materials from outside country of residence weather it's China or the US. That's without accounting for how much labor is more expensive in the US throughout the entire supply chain so price for goods increase exponentially.
Yeah, the US will crush fake Chinese companies instantly once they start manufacturing domestically again. Command economy drones can't compete with capitalists.
Three most important fact in this video is revealed within a second of the video starting: the fact that the factory had not closed and is still operating even after months of escalating tariffs.
Laid off 700 employees from previous 1000 employees
Well I'm in Europe so that doesn't concern me.
Seller: Price is higher now! Times are tough!
That is why dan is in business today! Very profesional and enthusiastic towards his company. Well done bro
Decreasing quality through use of cheap materials is not innovation
grandiora they cut 1/2 the labour force with automation.
Just open up a warehouse in cambodia, vietnam etc and send 99% completed toys to there from china, and then send the final product to america with the label saying made in vietnam or cambodia.
Yeah lots of folks do stuff like that. Small work arounds
Yep. Why not. American companies have stuff made in Mexico then ship to US and put a "Made in USA" label on it.
Jack up the price to make %400 profit
That is already happening.
I don’t know why people don’t understand that they are the only one who are going to pay these tariffs.
Gagandeep Singh you know why.. the leader said so and his followers do not research on their own..
Because they make decisions based on beliefs and ideologies pushed by partisan "news" and not objective facts.
And I don’t understand why idiot people are buying those products when Government clearly mentioned not to buy them. IF YOU BUY THEM YOU PAY EXTRA. Do you even know why the trade war started...?
For starter like you, let me give you an example- Let assume you spend a whole lot of money (billions) & time (decade) in designing & building a highly efficient electric car. As your electric car is so good that no one in market can compete it. So you started thinking of selling it globally. When you come to China to sell it you found that things are little bit complicated-
In China, to sell your product you have to do joint venture with domestic company. In sort you have to make a Chinese company as your business partner. But this is not the worst part. The worst part is, you have to share the "Intellectual Property" of the product you willing to sell to that Chinese company. It means you have to give design and blue prints of your product for free. Which results in within few years later that Chinese company will come up with better product than yours and you will be out of business.
And this is why Chinese products are cheap. They dont invest huge in R&D as they easily get designs for free.
And according to WTO, World Trade Organisation, its ILLEGAL. And China is a member of WTO. China has to abide all the laws of WTO. China is stealing Intellectual Property of west for decades.... Now its time to pay penalty.
NOW YOU UNDERSTAND WHY CHINESE SMARTPHONE MI, OPPO, VIVO, 1+ etc ARE SO CHEAP AND SAMSUNG, APPLE, LG ARE LOSING BUSINESS.
Atfirst they started making knock offs and nobody cared, but now they are making better products with low investment (thanks to Chinese law) and everybody loses their mind.
margins for the companies become thinner, yes they raise prices but not to the full amounts of the tariffs so they don't make as much money. So they tend to look elsewhere for sourcing so they can go back to the same margins as before.
Most of us intelligent Americans who didn't vote for this impeached imbecile know this. Only his rabid foaming at the mouth followers believe "China is paying for it."
Nice hearing he’s updated his factory with robots!
So quality went down and 700 people were replaced by a robots just to keep the price down.
This is a great ad for those microscopes!
Toys are engineering marvels. And that too electronic. They inspire higher production group.
What are the songs? There is nothing in the credits.
This ride on Robot, where can I buy one in UK?
Chinese are very adaptable people, they will always find a way in crisis. Amazing!
Do you diliver toys for the mother and baby toy shop sri lanka were are the places you dilever toys
Good work
Threat = Opportunity (mantra for Success)
Tech Stuff that is absolutely true!
Isn't that always the case with China finding the best quality possible. Even if the materials completely terrible.
The automation of production started off years before the war on China's unfair trade practices. Robots are more efficient than poorly paid workers, they work 24/7, don't fall sick and deliver higher and constant productivity. Labour intensive production (clothing, footwear) were relocated a decade ago to Chinese-funded FTZ in Africa, Cambodia, Viet Nam, Bangladesh & India.
Exactly, it's a matter of whether capitalistic or communistic corporatists dominate. Who's going to control Industry 4.0? Let alone the third industrial revolution.
@@dawnandy7777 The answer is China with no doubt because it's all planned for the next decades. It helps to drive radical changes when there is no freedom. The people can't express their opinions, and they are brainwashed 24/7 by nationalistic propaganda.
@@gauloisrefractaireenexilvo4366 Perhaps, but don't underestimate the west, American ingenuity. Particularly since AI can be fooled as well. It's more a matter of keeping the psychopaths in check, regardless of where they originate.
migrated to Aftrica, Vietnam .. etc but a lot of them are owned by Chinese.
Robots need softwares. Unlike human, they do not need the breaks. However Software can be broken down too. There are limited number of highly competent software engineers world wide. Design and Implementation take time and money.
New generation Air Planes can fly with Software control without human. Why are airlines still employing pilots? Fully automated planes can not guarantee the safety.
When there is human error, software will save the plane. When the software get troubles, pilots will use manual control and knowledge for saving plane.
US killed own soldiers more than enemy during Irag war because it was over dependent on softwares.
All of this will end up in landfills. This is the real cost.
Future generations will call our landfill mines.
@@nswanberg This guy right here is thinking ahead.
Robots killed 70% of jobs in one factory? That's terrible.
GeekLifeStyle Andrew Yang trying to tell y’all. No one is listening.
And that is Chinese labour. Imagine the cost of American labour, manufacturing jobs are not coming back. Maybe Andrew yang is right.
Welcome to the modern times.
These types of jobs have disappeared from my country and gone to China. Tariff ? What for ?
From Tokyo.
you sure japanese want to do these type of low salary low skill work?
@gan kh
Wages have not risen in major economies. On the contrary, in the so-called developing countries. wages have significantly risen. This seems to have nothing to do with policy but market. In today’s globalized economy, Job goes around just like money goes around. All I can do is to swim the tide and nothing else.
Can we have a music ID at the end? that beat was sick
Shazam bro
How about currency manipulation by China.
.... That's a very stupid thing to say, if you understand the purpose of an 'independent' fiat currency.
what about US printing unlimited USD ??
The tariff gave them the excuse to dump down quality even further. It is not like they haven't lowered the quality of the toys prior to the tariffs. Case and point: the lead paint for example.
Adaptability is one of the keys to survival.
This is great. Tariffs are working.
Why would Ivanka Trump be in those meetings on trades ?
how much price
Hi Everyone, I am Tony the guy who shows you toys in the video.
Welcome to visit our website: www.TonySourcing.com
Am I supposed to feel bad? We were getting screwed over, every other place in the world pays tariffs
TL:DR --- Factory owner reduced costs by making cheaper products and firing 700 employees for robots.
This whole tariff saga will transform how US and China trade forever. It forces China to rethink many things which is good. No pain, no gain. The more painful, the more you learn.
Trade war sucks and everyone loses
1.23 why two wheelers in china don't have number ?
How can I found Company mail id
The tariffs are a double edged sword.
Woww i have seen that guy at the expo here
Wow nice
You get what you pay for (- tariff). Trump took your glass lense away but we are kind enough to replace it with a plastic one, free of charge!
Silly question, are those lowered quality toys really safe for children?
Does it matter? The are cheap plastic that will be broken after two uses.
Quality?
More Manufacturing In The Country, More Success Stories.
instead of raising tariffs they should put tough regulations. It would be beneficial for consumers.
Moraleja: Only the consumer gets screwed , as usual.
NonyaBusiness! I would deny that trump is making America great again, it is more like pushing America to the edge of the cliffs, If you read more information on current US economy, there could be potential economic breakdown on 2020
I mean global economy breakdown
@@Ilovecruise I think he's being sarcastic.
Imagine this is only one of the products that will be affected. The scale will be absolutely huge.
Very nice
Me open one marketing give me number
A compromise on quality is not new just like car batteries or shoes. Customers dont mind paying goods for shorter life spans if can sq off tariffs
Phew. Thank goodness Ivanka is there with all her international trade experience
I recently bought a toy microscope, telescope kit for my kid and it is completely unusable junk. Too light. It needs weight, quality. So they aren't being smart, just producing worse junk than before. I've shifted to quality and will no longer buy anything which isn't off the official distributor to make sure I don't get fakes. I don't think people realise just how often they get fake products when buying online, especially from Amazon and eBay who don't seem to care at all about this issue. I've had to return so many items I'm giving up buying off them. I'd suggest anyone who doesn't know what I'm talking about is completely ignorant to this industry and because of that, part of the problem.
Look it in the long run, don't get fooled because your Christmas toys or other stuff gets a little more expensive in the short run.
Agreed.
The problem is: is there any US made? If yes, how much? 3x or 5x more? Can ordinary people afford?
Michael L rich people can President Trump?
the problem is that there is not enough US made any time soon. And if finally we get US made toys, they will most likely be made by robotics .
papaburger everyone had there strength, America can use its forces and allies to get things it need, which us don’t need too much money on that many good. But China was separated by the world, they had to be independent which they can make lot of things basic need but not the high tech one, now days change, they start to have more better tech...but one more, don’t focus on one side too much...
That is crazy
Glad too see kids are still getting microscopes
Don't worry they have itruck toys for 999$
90% products on Amazon are made in China whether it's from American sellers or other countries.
India should be the next toy manufacturer..
From low to lower quality because of the tariff? How about improving the quality when they had the chance to do it?
Mario Alfaro Why should they?
Say thanks to trump
@@contentedbuddha Sometimes you just need to do it yourself. China can never compete with real capitalist companies in the West. They'll be crushed as soon as Western companies start manufacturing domestically.
SpeedStriker In the 1970ties you probably would have said the same thing about Japan and South Korea.
if there's a ads on WSJ video I will not watch tht video
The microscopes are very good , children love them
Did Johnny says used to have 1,000 employees and now only has 300? Does that mean 700 people lost their jobs?! That’s horrifying!
That's the trend. 4th industrial revolution. In the US, Andrew Yang is running for the president because of the same thing.
Pay peanuts, get monkey. If you want a $300 LED TV, you get a $300 LED TV. If you pay for a $2,000 TV, you get a $2000 TV. It's not whether it's Made in China or not. You decide. Don't expect to get a Rolex for $100. $100 get you a good Casio. That's all.
So your saying that the fact that china lowered their rate isn't going to affect anything?
This fuel was before Corona
you get what you pay for (price inclusive tariff)
The fewer creepy Elsa toys the better.
Nice
How to
*If the tariff kicks in*
"dis iz bubbel sope"
The Chinese government has taken advantage of past administrations weaknesses, no more.
The Chinese government is totally reliant on goods sold to the US market, we can produce those products here if we choose. In a couple of weeks Most of these toys will be in the recycling bin, no big loss.
The issue of tariffs placed on china by america is huge and to look at two toy manufacturers and how they are bring affected by them without mentioning how americans are affected by chinese archaic trade policies is shortsighted.
Great. Robots to cut costs but then you cut employees which is bad
Video games have nothing to do with their woes, right ? That microscope always had a plastic lens
Smart Chinese will find way to adapt the new changes. They are flexible and hard working, its their big advantage. Should be "Win-Win". But on end, seems like it will be only one "Win".
Can’t wait to see tariffs going higher after this stupid season of consumerism. They don’t know they r able to stay in for now only because US is letting them.
why this news agency are more concerned in CHINA ?
So now they’re forced to make changes? Used to be low quality now even lower but it’s not anything new anyways
Obviously. That’s why thanks to trump we can bring jobs back to North America
I bet it is the same strategy that is being applied to all other goods coming from China: clothing, shoes, appliances, furniture, gadgets, household goods, computers, car parts, you name it.
So the tariff is not making any manufacturing shift back to the US. Who would have thought?
But what if the trend continues? What if the Chinese products you bought disintegrate after the first use due to thinned plastics and cheaper components? What if an American startup started producing the same stuff on US soil, but with great quality? Even if it was expensive, I'd buy it.
At least local companies could then have a chance against the tide of cheap Chinese products.
@@g43654 First of all, let's dispel some myth. China only makes cheap stuff that break. America only make good quality product.
In China's case, you get what you pay for. The same factory that is churning out cheap plastic toys can also make good quality ones if you are ready to pay for it. After all, luxury brands like Gucci, Prada, Christian Dior, etc they all make their stuff in China, but they control the process and use very high quality material. But then a Prada bag will retail at someone's monthly salary.
The point I was trying to make is, corporate tax cuts and tariffs were supposed to fuel a boom in American manufacturing, but it is not happening. The proof is in the data. The US manufacturing index has been declining quarter to quarter the entire year. In the case of tax cuts, the corporations simply pocketed the windfall by way of stocks buybacks and executives bonuses, they did build any new factory that they hadn't plan on. As for the tariffs, instead of corporation saying, okay lets start making stuff here in the US, they just went back to Chinese manufacturers and ask for any discount they can get, and absorb the rest of the tariff increase. Remember most of these companies bringing stuff from China already have 100 to 300% markup or more on the stuff they import. A 10% tariff is not going to put too much of a dent in their profits, nor does it act as a strong incentive to manufacturer those things in the US, because it's simply too expensive to make them here because of labor and regulatory costs.
Also, even with the tariffs, companies are going through great efforts not to raise retail prices. Why? Because the American consumer is very sensitive to prices. Some will drive miles to the nearest Walmart to get the cheapest prices. Online, people will search for the lowest price or use browser extensions to seek the lowest price online. So everything boils down to the American consumer, with few exceptions, they want the cheapest price, and companies will do whatever to deliver. Even if it means lowering the quality of the product.
As for a startup company trying to make stuff here, good luck finding an investor. There is too much corporate greed. Investors are looking for the next unicorn: Uber, Doordash, AirBnB, or the next tech gizmo that will yield 100, 200% on investment. Manufacturing is seen as not cool, risky and low margin.
Another thing is finding workers to do the back breaking factory jobs. Every kid nowadays dreams of going to college and get a degree, and then get a 9-5 job in a swanky downtown office with trendy restaurants and coffee shops nearby.
Tade war is a bad idea. Making toys in the US would prices and use labour inefficiently by making them. American strength is in high tech, pharmaceuticals, services, etc. They have higher values and margins
...and then Walmart opts for the toy made in the Vietnamese factory that sells it for $65 but with a glass lens.
You can try all the cheap tricks you want, China. But one way or another you’re gonna keep eating the tariff the way you have for a year now. Bon apetit!
Funny how toy exports from china have increased. dimwit!!!!
Same Price but these toys are Short time