The bottom line here is that I would like to see the trade issue resolved. One reason is to avoid the idiotic and seemingly endless intraday up-down spikes based on tweets, press conference comments and second-hand news headlines. Another reason is to see the "gaming of the market" stopped. Early on, government "officials" figured out that one comment could send the market into a tizzy and, once they learned it, they used it. That "effect" eventually wore thin so now the "gaming" has changed and the market hasn't yet figured it out. The game now is to talk tough and tell the truth about the difficulty in negotiations when the market is roaring near all-time highs and then change the rhetoric to "talks are really going well" and "China really wants to make a deal" when the market is throwing a fit.
But the real reason that I want to see it changed is I am very well aware of the type of problem that exists. The US has clearly benefited from China's emergence as a manufacturing powerhouse but, in reality China is a rogue nation when it comes to integrity and honesty in the marketplace. I owned and ran a distribution company for 34 years. I have dealt with hundreds of manufacturers and importers from across the US. "Made in Japan" more or less preceded me, but "Made in Hong Kong" or "Made in Taiwan" was big before China was even in the discussion. Once "Made in China" got started, it was kind of exciting to be able (as a small fish) to compete price-wise against the big boys. I sold into the retail space, and yes, it made a difference. As time went on things started changing. Many years ago, you could find a hot product and "milk it" for six to nine months minimum and sometimes a year or two. As China exploded on the scene, all of this began to change. Eventually, as soon as just about any "new" product hit the market, it was knocked off in China. Copyrights and/or patents didn't matter. The product got knocked off. At first, it took four or five months for the "made in China" version to hit the streets. Eventually, things moved much faster and the knock-offs started hitting the streets much faster. Importers would fly the first knock-offs in and, in spite of much higher air freight prices, could still undercut the market in price. Once the sea freight product hit the streets.....it was over. These products would often be less than half the price of the original and, as time went by, would be a much cheaper version as well. The market would get flooded with the cheaper versions, importers would start dumping the product to get rid of it and.....voila.....the product would get killed on the street. Now, some of the market is NOT going to change with a trade deal. In the small potato space where I primarily dealt, things will stay the same. China would not have the resources to stop it (the cheating) or the desire to stop it. In fact, stopping it would mean the closure of thousands of small "factories" and would mean the loss of a huge number of jobs.
I was a small potato and most of what I distributed had nothing to do with areas that the market would be concerned with. I was a contract distributor (many years) for one of the most recognizable names in the energy drink space and I was a distributor for a cell phone accessory manufacturer that became the dominant player nationally in the space for several years (officially, from market share numbers via nationally recognized ratings). Over many years I sold tons of this merchandise and knew the category very well. I was friends with the primary owner of this company and had regular conversations with him. He liked me (as I did him), knew I was honest, and knew that I knew what I was talking about. He told me stuff from "behind the scenes" that nobody else knew. One of the most frustrating issues in this space was Apple products. In order to be "certified" with Apple, these people had to buy their connectors from Apple (and grossly overpay), then ship them to their factory for final assembly. This made the price of "official" Apple products look stupid in the marketplace in comparison to a comparable android product that only differed in one place.......the end connector. Comparable Apple products in my customer locations were priced 35-40% higher than Android products......and that was with me making HALF the margin on Apple products to keep the price down as much as possible and give my customers the minimum category margins that they wanted.
I said all of that to say this, and here is an example of the real problem behind the scenes and why it is necessary to address it. As I said, years ago it might be five or six months before knock-off or counterfeit product hit the streets. But that changed dramatically over the years. And there is no better example of that than when the Apple "Lightning" connector hit the market. It, in itself, was a great innovation. It was way smaller than the prior "official" Apple connectors and, unlike the often frustrating Android connectors, could be placed in the device with either side pointing up and would work properly. I was introduced to that "official" connector BEFORE it hit the market because my supplier was an authorized Apple supplier.....and the prices were staggering. Here is the problem. The knock-off version of the connectors were available at the SAME TIME. As soon as the new phones and devices that used the Apple Lightning connectors hit the street, the "unofficial" connectors were available to me at prices that were 75% lower than the licensed version. That means that the officially recognized factories in China had already leaked the schematics of the devices to other factories, the "unofficial" factories had already made the product, importers had already ordered it, had already had it shipped, and HAD THE UNOFFICIAL and UNLICENSED product in stock as soon as the new devices hit the street. I am certain that this goes on in a grand scale and here is the root of the problem. There is basically no protection of technological innovations or ideas or designs or copyrights or patents within China. It is a wild west as it comes to manufacturing. That is why you hear NO NOISE about this from the Democrats. As much as they HATE TRUMP and anything that he thinks or does, they are in full agreement in this area. That stems from the fact that they ALL hear about this from their constituent business owners. It is a BIG problem. They will still use China for manufacturing many products. They just want the incessant cheating to STOP.
There are a couple of glaring ironies here. The resolution of this will NOT lead to lower prices. It will lead to higher prices. But so do tariffs. Higher prices lead to higher sales. Higher sales lead to higher profits. The fly in the ointment here is......until its resolved......in one way or the other each side punishes the other with restrictions or bans or whatever to make its point. The other irony is rather simple, yet complex, in light of everything that I just wrote. Over the years I dealt with just about every nationality imaginable from a supplier standpoint. I dealt with many Chinese/American owned manufacturers and importers. I considered virtually all of them to be trustworthy and honorable as far a business (between us) was concerned.
(Oh, and before I finish my little diatribe, Apple did respond in the marketplace. I assume that they decided it was necessary. They cut the cost of their connectors in half because the marketplace was literally flooded with unlicensed product that was much cheaper (and worked) than the official product. Funny thing was, in the long, run this was a win/win for Apple. Many of the importers of knock-off connectors starting buying the official version from Apple because everybody really wanted to have that Apple certification. Once they could have that without paying stupid and ridiculous prices, that is direction that most of them chose.)
The sad part is, we still have nothing but promises and that on a small scale. The "agreement" is tentative and is really NO agreement at all because it is not yet in writing and signed by the parties involved. And, in spite of what we were repeatedly told......"no agreement but a big agreement"......what we have is minor and promises more of the same since it will be several weeks before the details are hammered out, put in writing, and signed. Then, if that is done, the really big stuff gets kicked down the road and this will go on and on and on and on. At one point MANY, MANY months ago, we supposedly had 95% of the issues agreed upon (remember that) and now we get to celebrate approximately 33% agreed upon.......but not in writing.......yippee!