How Tariff Tensions Transformed China’s Toy Factories | WSJ
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- เผยแพร่เมื่อ 28 ส.ค. 2024
- 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?
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.
Microscope with plastic lens instead of glass... well the good news is - the price is still the same!
Bad for the environment
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.
@Spencer Broom 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.
lothean I have a 2007 Nissan Murano with 195,000 miles on it I don’t think German cars can even get close without costing a fortune
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 TH-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.
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
th-cam.com/video/ffwRnoAEzhA/w-d-xo.html
"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.
4:54 Tesla Cybertruck miniature.
Guilherme Fernandes I guess that’s how Elon musk gets the idea from.
This is bubble soap 🙌
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.
@@AMTucson
Disinflation, shrinking product or lowering quality to maintain price point
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.
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
was really hoping for the “bubble soap...toys”
The D.Va robot LOL！
In 2020 toy microscope: with out lens
But good news price is same.
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.
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."
Like Mexican I only can say, you don't know about economic. China doesn't buy nothing to the rest of the world (except raw materials) and they want sell everything to everybody. They destroy the Mexican industry on the 2000s with their cheap hand work, china don't follow the international laws, they use dumping in almost everything.
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
5:50 He ment there are always corners they can cut.
Well I'm in Europe so that doesn't concern me.
Seller: Price is higher now! Times are tough!
Decreasing quality through use of cheap materials is not innovation
grandiora they cut 1/2 the labour force with automation.
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.
Toys are engineering marvels. And that too electronic. They inspire higher production group.
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.
Chinese are very adaptable people, they will always find a way in crisis. Amazing!
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.
So if anyone wants to make high quality toys in the usa, Now is the time!!!
It's still piece of toy, kids won't notice.
That is why dan is in business today! Very profesional and enthusiastic towards his company. Well done bro
Bring the factories back to the USA
So quality went down and 700 people were replaced by a robots just to keep the price down.
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.
All of this will end up in landfills. This is the real cost.
@Nelson Swanberg This guy right here is thinking ahead.
So, now, the tariffs are forcing the Chinese to automate more and become an even more powerful industrial power.
Was that the US intention when they made the tariffs?
Blame Trump not the US. Sadly, he never realized that he was fighting against a country that had been practicing business for thousands of years.
Threat = Opportunity (mantra for Success)
Tech Stuff that is absolutely true!
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.
This is great. Tariffs are working.
American companies shouldn’t be making toys in China in the first place
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.
This is a great ad for those microscopes!
Sounds like the tariffs are working, lets raise them a bit more please.
India should be the next toy manufacturer..
Why would Ivanka Trump be in those meetings on trades ?
More Manufacturing In The Country, More Success Stories.
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.
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.
Everything in this video will be either in a landfill or our oceans... gotta love it.
Better than hyprocrits shipping them off to developing country and criticizing them for being environmentally irresponsible. Lol.
ConquerV
Ditto,
Didn't see your comment 1st.
Basically I'm saying the same thing.
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.
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.
Trade war sucks and everyone loses
How generous they kept the price the same and ruined the product. Well done.
Yeah try running a factory that is fighting tariffs
That's only for countries that increase tariffs. Other countries that don't increase tariff can still get nice toys
That is the reason why we get low quality products. American policies
Johnny and Tony are smart guys. MBA Allstars.
Adaptability is one of the keys to survival.
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 tariffs are a double edged sword.
Johnny, if your product sucks, then I will stop buying it. You cut corners, I cut you. I want cheap and good quality, and your neighbour will do it eating into their profits to take business from you.
The microscopes are very good , children love them
then you will complain about how these toys made of cheap materials are unsafe
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.
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. $100 get you a good Casio. That's all.
This fuel was before Corona
Phew. Thank goodness Ivanka is there with all her international trade experience
Nice hearing he’s updated his factory with robots!
Don't worry they have itruck toys for 999$
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!
instead of raising tariffs they should put tough regulations. It would be beneficial for consumers.
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.
Chinese business is clever and adaptive ...this is business and all businesses need to become innovative and encourage clever thinking around the world as we are a changing and that is a good thing!
Great. Robots to cut costs but then you cut employees which is bad
The greatest fear is losing the customer not tariffs. For the same reason they have to speak fluent English and tell great stories to the Americans.
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.
you get what you pay for (price inclusive tariff)
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.
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...
toys are a disgusting waste of natural resources
Imagine this is only one of the products that will be affected. The scale will be absolutely huge.
90% products on Amazon are made in China whether it's from American sellers or other countries.
After the cameras left the factory, Johny started shocking the workers with tasers to make them go faster.
Splendid logic, Excellent reasoning! Hope there are more Americans who think like you do, the more the better. I love boneheads, especially those with malicious hearts trying to cast curses.
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 labor”. 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 labor 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.
Do you diliver toys for the mother and baby toy shop sri lanka were are the places you dilever toys
The fewer creepy Elsa toys the better.
In other news American based toy companies are ending strong this year with low cost to operate, automation, and plenty of people to work. Let’s go back to the way it used to be. Built to last.
JUST BECAUSE SOMEONE IS DOING BETTER THAN YOU DOES NOT MEAN THEY ARE CHEATING ...
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
Boycott Chinese goods
Further proof that tariffs are bad for business... a businessman should know that! Serves us right that we’ve made it so we get lower quality at higher prices
Why can’t we build this stuff in places like Ohio?
You could but you could not sell it at the same price point. People in Ohio like to make at least a little money for food and lodging.
Labor cost and materials cost
Cheap things come at a price.
Because you can’t afford it
Labor costs and investment costs are too high. As stated at 4:30 in the video, he invested hundreds of thousands in automation. That means that an American company would need to make a similar investment just to compete with companies like this one. So on the business side, there’s a huge cost barrier to entry. Plus, on the political side, after the automation, you’re only providing about 300 jobs. That’s not going to do much for American workers in general, and it’s too little of an impact to local economies to make local governments encourage the creation of businesses like that.
Good they should raise the tariffs even more so that American companies will produce toys in the US
That is crazy
why this news agency are more concerned in CHINA ?
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.
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".
Lower than what was already low quality.
How to
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.
Good work
Avoid the tariffs all together. Buy American produced products.
I buy US made all the time. Best piece of mind ever. An Aussie here.
@@g43654 As an American wholesaler and retailer, I thank you for doing business and putting your trust in us and our products.
Johnny helping to fill our oceans with plastic, thanks Johnny.
You buying Johnny's stuff even white people with their apple iPhone thanks for contributing to Johnny's work