Item — HN Reader

> a handful of powerful, connected "insiders" will be allowed to operate businesses, and will dominate... while everyone else gets wiped out, by acts of government

Note that this is not an exemption for companies, but an exemption for goods:

> A new list of goods to be exempted from the latest round of tariffs on U.S. importers was released, and it includes smartphones, PCs, servers, and other technology goods, many of which are assembled in China.

2 comments

So all anyone has to do to qualify is produce some of the most complicated electronic devices and components in the history of the world at the largest scale possible, without which there is zero chance of being sustainable or competitive, and then they can benefit from the gifts to the established giants?

What a gift. What a great idea. That'll surely spur innovation and domestic production and have no effect to further insulate the giants from competition.

And if you build your tech in US, well, you are disadvantaged because you have to pay the tariffs on every component you import from China.

So it’s actually an incentive to build in China.

It is incentive to somewhere you can get Chinese components without massive Chinese tariffs, can sell to the US without massive tariffs, and has cheap labour or tax incentives. Several countries will be sticking up their hand, if manufacturers take the gamble that the tariffs will remain for a long enough period.

So is your component in the list from a comment below -

https://news.ycombinator.com/item?id=43665766

Then you don't pay the tariff.

Aluminum isn’t a component, but you would pay a tariff on importing it to build with it.

The other benefit of building in China is that you will get unrestricted access to Europe and other markets

Why is this downvoted? This is factual.

Electronic imports, no/low tariffs.

Import material to produce electronics, high imports.

> without which there is zero chance of being sustainable or competitive

It seems like some of these comments are missing how competition works.

Competition happens within the same type(s) of goods, not across them.

That is, the companies making the goods still affected by tariffs aren’t in competition with the companies making goods now exempt by tariffs.

Yes, its true that they will have a better chance at thriving under these exemptions, but whether they thrive or not should have little impact on the other companies.

To be clear, I’m not arguing in favor of this decision — or any of the tariffs, for that matter.

I’m just simply arguing that competition isn’t really the angle to use to argue against this particular decision.

> Competition happens within the same type(s) of goods, not across them.

Not true, for example smart phones replaced home computers for most people. Those are two very different goods, but since they can accomplish the same thing for the average person they end up competing.

It isn’t really cheap or easy to build a PC or smartphone business with name recognition…

Nor is it cheap or easy to build a company that would likely be able to appeal tariff exemptions…

It’s exactly as easy or cheap to build a smartphone or PC business as it was a month ago. The headline is misleading.

I like the way that you phrased “I agree with you, it is not cheap or easy” here