....China-United States trade war and how it will impact the supplement industry....
July 6 tariffs
On July 6, the United States and China trade war began to accelerate as officials from both countries nailed the other with billions of dollars of tariffs. The Trump administration was the first to act, hitting Chinese exports with $34 Billion in tariffs. China retaliated with tariffs of their own mostly targeting American farmers, whom strongly supported Trump during the 2016 election.
What it means?
Almost 1000 Chinese exports will get slapped with tariffs of more than 25%, with hundreds of more products to be added to the list. The USA consumer will be the one punished, as you will notice the prices products that are from China will be more expensive. Also, those who sell products to China, such as vehicles and supplements, will have to pay more to sell in that country. Though, there is a huge trade imbalance between the USA and China, so in the long term – the United States will benefit from more fair trade.
Supplements at risk
According to experts who were interviewed by Nutritional Outlook, up to 90% of ingredients found in dietary supplements come from China, and boy are they cheap to produce and import! An example is CoQ10 (Coenzyme Q10), which is a great supplement for heart health. It is an essential supplement for all of us who use anabolic steroids and have a muscle-packed body.
Initially, CoQ10 (Coenzyme Q10) was set to be on the tariff list, but at the last minute, it was removed by the Office of the United States Trade Representative on June 15. Analysts were quick to point out that there is no US industry for ingredients, so if a tariff were to be put in place there would be a huge shortage of supplements. This disaster would cause the price of these products to skyrocket and many supplement companies would be forced to increase prices. An example of this is that CoQ10 (Coenzyme Q10) would be priced 50-100% higher than Chinese produced product.
Vitamins B and E were also initially part of the tariff but then removed, as well as dozens of supplements many of us use on a daily basis.
This tariff situation is dangerous and will affect people who depend on these supplements for their health. At this time, a bottle of good quality Vitamin C (which is great for the immune system) costs $20 from any supplement shop or Amazon. If tariffs were to be placed on Vitamin C, the cost would likely rise to $30-$50 per bottle.
Testosterone boosters that cost $80 right now, will cost $100-$200! Even something as simple as fish oil, which is extremely cheap, would now cost over $50 per bottle.
The only way to fix these prices would be for American farmers to start growing all these herbs and supplements themselves, but that would take many years to even be practical. Yet, with the different climates the United States has – this is a legitimate industry of the future.
UPDATE: More tariffs
During the editing of this article it was announced on July 10 that Trump added another $200 billion in Chinese product tariffs. His announcement followed a tweet where he said that the United States had a $151 Billion trade deficit with the EU, and he attacked the European Union for making it hard for farmers and workers to make money. It appears he plans on using tariffs as a weapon to negotiate with allies in both in Europe and in Asia.
The Trump administration said it will look at slapping tariffs of $200 billion on Chinese products over Beijing's failure to respond to U.S. efforts to get them to change their trade practices.....
The new list comes days after the U.S. levied a 25 percent tariff on $34 billion in Chinese imports, which resulted in retaliatory tariffs by Beijing of the same amount against U.S. goods.....Source: The Hill
Analysts feel that this announcement will further alienate US trading partners and cause them to slap their own tariffs as retaliation. In fact, China has said they will match any tariff 'dollar to dollar'. This news sent the Dow Jones Futures cratering 250 points in 5 minutes after market hours, and Asian stocks were set to sell off when they open in 2 hours.
Results for Industry
What this means for supplements....
If China follows through on their word of increased tariffs, this would mean that American companies will lose a lot of money exporting their products.
But even worse, the tariffs Trump is slapping on China would mean our own supplement companies will no longer be able to import supplements for cheap prices. This trade war is just starting and both countries leaders are stubborn, ignorant, and willing to hurt their own citizens just to prove a point to the other. This will send the price of our supplements rising 50%, and there is speculation that some products will rise 100%, even 200%, or more (in a few cases). As mentioned earlier in this article, this would mean you will pay 2-4X the price for supplements!
Though, there is an upside. Where there is a shortage of supply and there is demand, the markets will take over. It's likely USA companies will now be able to grow and produce herbs because it's become financially viable after the tariffs – meaning they can make money with it. In fact, many supplement brands would love to order from outside China (Made in USA), but they can't! This is due to the government sponsored, monopolistic behavior of Chinese companies to drive American business to bankruptcy by lowering prices below break-even.
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