Comments on: We All Love Free Trade, Don’t We? http://wallstreetpit.com/12248-lecturing-each-other-on-trade Wed, 08 Feb 2012 22:13:42 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Vincent911 http://wallstreetpit.com/12248-lecturing-each-other-on-trade#comment-89388 Vincent911 Sat, 26 Dec 2009 07:45:20 +0000 http://wallstreetpit.com/?p=12248#comment-89388 China trade surplus, some food of thought : XYZ Valve Manufacturing Co. Ltd. (a fictitious Italian company making stainess steel valves in China) 1) Imports 1 ton of raw stainless steel from Japan US$ 6,000.00 to make 1,000 valves (Customer wants Made in Japan stainless steel). 2) production, labor, admin, & tax cost US$ 1000.00 to make 1,000 valves. 3) exports the 1,000 valves to the USA for US$ 18,000.00 FOB. *) China gets 05% of the added value. *) Japan gets 33% *) Italy gets 62% On trade stats China gets 100% of the US$ 18,000.00 China trade surplus, some food of thought :
XYZ Valve Manufacturing Co. Ltd. (a fictitious Italian company making stainess steel valves in China)

1) Imports 1 ton of raw stainless steel from Japan US$ 6,000.00 to make 1,000 valves (Customer wants Made in Japan stainless steel).
2) production, labor, admin, & tax cost US$ 1000.00 to make 1,000 valves.
3) exports the 1,000 valves to the USA for US$ 18,000.00 FOB.

*) China gets 05% of the added value.
*) Japan gets 33%
*) Italy gets 62%

On trade stats China gets 100% of the US$ 18,000.00

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