Dumping, The Dollar and Inflation

Posted by Jeff 04/04/2016 0 Comment(s) The Bearing Market,

A major Chinese maker of tapered roller bearings has just been hit with ant-dumping duties and will probably have to shut down its operations in the U.S.

 

Dumping means selling your product below the cost of production in order to gain market share. There is a lot to be discussed when it comes to dumping, but I would like to consider the ramifications this will have on prices.

 

Cutting off so much supply so suddenly is going to create shortages, leave a lot of people scrambling for bearings and raise prices. This is great new is you are a tapered roller bearing manufacturer not hit by the anti-dumping suit, bad news for everyone else.

 

Just take a minute to imagine, however, if it wasn't just tapered roller bearings. What if everything manufactured in China suddenly stopped flowing into the U.S.? There would be huge price rises as people scrambled to buy Chinese goods before the supplies ran out and as U.S. manufacturers scrambled to increase production. Not baby inflation but massive inflation like the kind that is now ripping apart the economy of Venezuela.

 

The fact of the matter is that the U.S. is extremely dependant on other countries for our manufactures and a lot of our food. If the U.S. dollar ever loses its reserve currency status and people around the world decide that they want gold, food or manufactured goods in exchange for their wares instead of dollars...that would cause a considerable amount of inflation here at home.

 

Thank goodness people still want dollars. Let's hope that doesn't change and we can count on cheap tapered roller and other bearings for the foreseeable future.

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