Effect of "trade war" with China on CTA

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orangeline
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Location: LaGrange, IL

Effect of "trade war" with China on CTA

Post by orangeline » Thu Apr 05, 2018 1:54 pm

CTA has ordered up to 846 new 7000-series railcars from CSR Sifang America JV, a Chinese and American joint venture company. The cars would be assembled in a new facility in Chicago from parts produced in China and other sources. According to Chicago L.org, the initial cars would be ready for testing in 2019 with full-scale production beginning in 2020, assuming the testing pans out. With the recent and seemingly increasing trade skirmish between the US and China and given that Chinese rail equipment is one of the targets for higher import tariffs, what might happen to this existing order?
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Backshophoss
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Re: Effect of "trade war" with China on CTA

Post by Backshophoss » Thu Apr 05, 2018 9:35 pm

This "Trade War" might become a moot point if the current occupant of the White House backs off on imposing the tariffs as was hinted in a front page
story in the NY Times today.
Fair use per reg,"White House Edges Back From Brink of Trade War,Hints That Tariffs on China May Never Go into Effect
White House Officials moved on Wed to calm fears of a potential Trade War with China,administration's proposed Tariffs
were a "threat" that would "HELP" nor hurt the US economy,hours after China it would punish Amreican products with similar levies."
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Tadman
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Re: Effect of "trade war" with China on CTA

Post by Tadman » Wed Apr 18, 2018 11:34 am

It's a bit more of a nuanced issue than this. For example, items not normally available in the US will not be affected nearly as much. Now what's really a nuanced issue is subway cars built by a Chinese firm in Chicago using steel from ______ . If CRRC bid this using 2015 steel prices, they are in for some trouble as steel is shooting up in price.

That said, the long term effects of this steel tarrif will be great. The scofflaw nations dump steel here which hurts domestic steel jobs and also reduces traffic on US railroads. Most rail production has gone overseas because the foreigners made the prices artificially low.

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