←back to thread

Growing trade deficit is selling the nation out from under us (2003) [pdf]

(faculty.washington.edu)
162 points TaurenHunter | 1 comments | 04 Apr 25 09:20 UTC | HN request time: 0.001s | source
Show context
randyrand ◴[04 Apr 25 09:58 UTC] No.43580117[source]▶
The USA captures most of the value from selling iPhones worldwide, but yet the entire value of an iPhone counts only as a Chinese export.

Something is not right with how we calculate these things.

replies(4): >>43580160 #>>43580170 #>>43580198 #>>43580241 #
refurb ◴[04 Apr 25 10:18 UTC] No.43580241[source]▶
That’s not true.

Apple has internal transfer pricing which is dictated by accounting regulations and tax law.

Companies try and set transfer prices to minimize local taxes, but need to follow regulations.

A phone made in China is “purchased” by say Apple Canada for some fraction the price it sells for - regulation usually require the Value to reflect the cost of inputs.

So Apple Canada might purchase a phone from Apple China for $600 CAD then turn around and sell it for $1200 CAD in Canada.

It’s the $600 that counts as a Chinese export to Canada.

replies(2): >>43580346 #>>43586277 #
randyrand ◴[04 Apr 25 10:36 UTC] No.43580346[source]▶
> yet the entire value of an iPhone counts only as a Chinese export.

> That’s not true.

You're right. It's not always the "entire" value paid by the consumer.

replies(1): >>43582942 #
1. thehappypm ◴[04 Apr 25 14:27 UTC] No.43582942{3}[source]▶
This is actually something that I think a lot about with tariffs. The price that you pay at the corner store for an item, even an imported item, is nowhere near the price that an importer pays at the border.