April 8, 2020
Will Donald Trump’s War KILL Dropshipping & Amazon?! (Why Chinese Products Are So Cheap)

Will Donald Trump’s War KILL Dropshipping & Amazon?! (Why Chinese Products Are So Cheap)

Hey guys, so today we’re going to be talking
about something that is very, very important for online sellers and small business, and
that is the ongoing trade war between China and the United States. Trade wars aren’t so bad. Well, understandably not all Wholesale Ted
subscribers are sure they agree. I’ve recently received a lot of comments from
sellers and viewers who were quite scared about what’s going on, and want to know if
this will impact or kill their businesses. You see, for those of you that don’t know,
there has been an ongoing trade war this year between the USA and China. So a trade where is where country A increases
the tariffs on imports from country B, and so in retaliation, country B increases the
tariffs, IE the import taxes of country A’s items that they buy from them that are important
to their country, and this back and forth retaliation is a trade war. And this is exactly what has been happening
between China and the USA. On June 15th, Donald Trump declared in a short
statement that the United States would impose a huge 25% tariff on $50 billion worth of
Chinese imported goods, in response to unfair trading practices. A lot of online sellers were quite scared
at this announcement, because a 25% tariff would be more than enough to kill the profit
margins for many online seller, and thus potentially kill their businesses. In addition, Trump also announced that if
China retaliated with their own tariffs, that the USA would impose 10% tariffs on an additional
$200 billion worth of Chinese imported goods. Well, China did respond pretty much immediately,
and they ended up imposing their own similar tariffs on USA imported goods. And thus China and the USA are now locked
in an economic battle. Most of my subscribers here at WholeSale Ted
either own or are starting online businesses and stores like drop shipping, and Amazon
FBA, private labeling business that rely on importing goods from China. And so of course the question here is, what
does this mean for you as an online seller? Is Donald Trump’s trade war going to kill
your business? Let’s find out. So let me ask you a question, why do you think
it is cheaper for you to import your products all the way from China into the United States,
rather than just working with USA based manufacturers and suppliers? A lot of people think that the reason why
is because China uses cheap slave labor. Child labor included, to manufacture its goods. And while it is true that there are still
some factories in China that have very poor working conditions, but in general the working
conditions in China have massively improved. You see, when most people think of Chinese
factories, they think of the hellish conditions that existed in the ’90s. Take the Pill River Delta region of China,
it has a lot of factories that produce toys. They even produce toys for some of the biggest
brands in the world, including Disney. Back in the ’90s and early 2000s, every year,
more than 40,000 workers from these toy factories would break or even lose fingers on the production
line and really nobody cared. But since 2008, things have been drastically
changing. With the introduction of sweeping labor reforms
that have been designed to protect the rights of the workers. As a result, the cost of labor in China have
gone up a lot, yet it’s still usually way cheaper for online sellers like drop shippers,
and Amazon private labelers to source their products from China, even with the expensive
shipping costs. So how can that be? Well it’s not because they’re cheating with
rampant child labor. An unfair leftover stereotype, perhaps the
biggest reason is because of the belt road initiative. The belt road initiative is China’s ongoing
development strategy to create roads, train tracks, and shipping ports to connect it to
Europe, Asia, and the Middle East. The silk road economic belt is a series of
six land corridors that will contain roads and train tracks to connect China to a slew
of countries, all the way over to the UK. And that’s not all. They also have the maritime silk road that
they are building. This is a series of shipping ports that will
connect the South China Sea all the way to Africa. China officially announced this development
strategy in 2013. But the reality is that they’ve actually been
massively investing in this trade network and infrastructure since the 1980s. In the ’90s and the 2000s, China invested
9% of its GDP into infrastructure. Whereas most western countries invested just
two to 4%. And some of the ways that they’ve been building
this network have been pretty controversial to say the least. What China has done is it has offered large
loans with a relatively few barriers to countries that normally would be considered too risky
to loan money to. Like Sri Lanka. Sri Lanka is a risky country to loan money
to, because corruption level and political instability are so high. So if you loan money to them, you’re probably
not going to get it back. But China doesn’t mind this, in fact they
welcome it, because what it lets them do is use that debt to further their belt road initiative. As a result of not being able to pay back
the debt that they had racked up to China, which was over $8 billion, the Sri Lankan
government made a deal with China. They would give them a 70% stake, and a 99
year lease of their shipping port, Hambantota, which had been built of course with the money
that they had initially borrowed from China. Not only has it made it cheaper and easier
for China to export its goods around the world, it’s also made it cheaper and easier for China
to import key raw materials, like oil and iron ore. They then take those raw materials, and turn
them into goods, and export them back out again. Sri Lanka gets a new port, and China kind
of gets one as well. Other people view this quite differently though,
and have called it the China debt trap. This channel is politically neutral, I don’t
talk about my political opinions on it, however as this is quite a controversial topic, the
comments section is free game. So feel free to sound off on your opinion
in it. But not matter what your opinion is on China’s
plan, it has undeniably had a massive impact on their position in the world when it comes
to manufacturing and trade. Even though the United States is not connected
to this economic silk road, this massive infrastructure network has dramatically lowered the cost
of producing goods. Which is why we all import items from China. If China’s huge trade network sounds incredibly
intimidating, as in so intimidating that the idea of trying to compete against them seems
insane, you would be right. And the United States government would agree
with you, in fact Donald Trump would agree with you, and this is why most online sellers
don’t have to be worried about this ongoing trade war. You go to a mall, you go to K Mart, you go
to Wal Mart, you go to Target, what do you see? Chinese goods, Chinese goods everywhere. China has built the common goods empire, they
are the undisputed king when it comes to producing common, every day goods, like this little
vegetable slicer, or this avocado slicer. In fact if you look at the top products that
the USA imported from China, you’ll quickly see that yes, the top categories include common,
every day goods that average people buy, like electronics and clothing. And of course it’s these types of items like
kitchenware, clothing, and little electronics that most online sellers like Amazon, FBA
private labelers, and drop shippers resell. Well you know what? Donald Trump does not want to be competing
with China over these types of items, he doesn’t want American factories to be producing their
own avocado slicers, no. What he and the American government are interested
in doing is competing with China when it comes to high tech goods. You see China may have built the common goods
empire, you go to a mall and you struggle to find anything that they haven’t produced. But in high tech fields like robotics, aerospace,
automobiles, and especially in pharmaceutical products, they are dominated by other countries,
including the United States. But China has announced that they want to
change that, with their 2025 plan, which outlines their strategy for moving in and taking a
slice of these industries for themselves. And this is what the United States is warring
with China about. This is what Donald Trump’s tariffs are all
about. They’re not about the small types of items
that most online sellers sell. In fact, remember at the start of the video,
where I talked about how the United States has implemented a 25% tariff on over $50 billion
worth of Chinese imports? Well, let’s take a look at the products that
did get slapped with a tariff. If you don’t recognize half of what’s on this
list, then you would be well forgiven. That’s because the vast majority of products
on here are either raw materials, or industrial goods that are used in those high tech industries. These types of items that most people are
importing and selling on Amazon FBA warehouses, these are not on the list at all. The same goes for all express items. Donald Trump could care less that you’re importing
and selling a self stir mug from China, and besides, for import packages to be eligible
for tariffs, their value needs to exceed $800. So as most drop shippers are importing packages
that are worth less than $50, there is really no concern for drop shippers at all. But what about those $200 billion worth of
Chinese goods that Trump threatened to target in retaliation? Will we be impacted by that? The answer is that it’s extremely unlikely
that you would be. I’ve gone through the 200 page document outlining
all the products that would be targeted. The vast, vast majority of products on this
list are either related to high tech fields, raw materials, or food, and food is another
controversial area for the USA and China when it comes to trade. Now there were actually a few common good
items that were on the list that might impact a hand full of sellers, but as expected, the
vast, vast, vast majority of common goods were not targeted. With this video, I didn’t just want to come
out and be like, oh hey look, most of the items that we’re selling aren’t on the tariff
list. Don’t worry about it. No, with this video, what I really wanted
to do was I wanted to explain the situation so that if the trade war escalates between
China and the USA, you don’t need to worry because you know that your types of goods
are not being targeted. Because it’s not common goods like this that
are being targeted, Donald Trump does not want America to start making their own avocado
slicers. He is more than happy for America to keep
importing them. Thanks for watching, here at Wholesale Ted,
we’re not afraid to tackle the real issues when it comes to selling online, so if you’d
like to get even more videos like this, then be sure to subscribe to us, and click that
little notification bell next to it so that you don’t miss out on any of our videos. And before you run off, I’ve got one last
freebie I’d like to give you. Here at Wholesale Ted, we have a free ebook
that teaches you the six steps that six figure drop shipping stores follow to make over $10,000
every month. To get that ebook for yourself, simply click
on the link in the video description below.

100 thoughts on “Will Donald Trump’s War KILL Dropshipping & Amazon?! (Why Chinese Products Are So Cheap)

  1. The response to this video has been really great, thank you. I appreciate that (most) people have avoided slinging insults at each other – and also that people really enjoyed a more educational video!

  2. But cheapness screams slave labor. If the Chinese apple employees who most were kids, were trying to commit suicide so much the company place nets outside their factories?!?!?! Then no telling what slaves of other lesser companies experience for our lower $2 prices?!?!

  3. Hi Sarah! I’ve been following you since 2016 and I’m from Srilanka. What all you talked about Srilanka is 100% true. China is slowly dominating this island. As I noticed these days there are so many Chinese living here and even in local product’s retail packet’s they have added Chinese as additional language to print the products details.

    We are totally clueless about what’s going on here and whether it is good or bad? ☹️

  4. Donald Trump did not start this trade war, the Chinese started it many years ago. The only difference is our past Presidents were bought off and did nothing, this President is smart when it comes to business and cannot be bought off. Good for trump lets start making our own product again.

  5. A little unrelated but I killed my Amazon membership 2 days ago. They provide great service and I use them for everything but they really don't care about what they are doing to small businesses. Not only that but they recently this week opened up a physical store in NYC. Everything thats rated with a 4 stars on Amazon can now be bought at the Amazon store in NYC. Which means they are going to be killing even more businesses. I can't stick by a greedy company like that.

  6. Makes sense. If everyone is ordering from China, then tariffs are good for the world. That way China does take
    Over the world

  7. Thanks Sarah for tackling an important topic that's on the mind of most of drop shippers. There are 2 points however that I'm still concerned about:
    1. Yes it has been the case so far, but this can change anytime (Trump can change type of goods affected, does not have to follow any logic)
    2. There are other measures govts can take to benefit from this type of commerce such as the taxes imposed by the Australian govt right on Aliexpress for shipments to Australian consumers

  8. But Ted the business woman you should have concern that rapid prototyping and additive manufacturing will cut down import from China surely…. In near future very soon….

  9. Soon there won't be cheap stuff coming from China. There will only be cheap expensive stuff. It will only hurt the US consumer since most stuff consumed in this country comes from China.

  10. Latest tension news. Is this the end of E-packet shipping? Trump Opens New Front in His Battle With China: International Shipping


  11. https://cjdropshipping.com/2018/10/18/you-should-use-cj-the-usa-warehouse-during-the-high-season-and-chinese-new-year/

  12. I heard my ding-dong President was wanting to do away with ePacket. I have also heard this is a good thing, but I don't know. I know dropshippers use ePacket to save money and thus make more income, so I am not too happy about that as I am planning my store.

  13. It all boils down to the exploitation of dirt cheap Chinese labor (including child labor and what the west considers slavery). Also rampant intellectual property theft. If that's all your business model is founded on, then good riddance.

  14. Hi! I love your channel! BTW, you missed to cover the UPU/e-Packet/subsidized mailing system issue that Trump's war is also trying to target recently.  This would increase the prices of goods from China and definitely impact dropshipping/sourcing from China.

  15. This is in response to the PetroYuan, right now we have the "PetroDollar" most oil sales are done in the US dollar, this artificially inflates the value of the dollar each day as all the countries around the world have to go to the forex market, etc to buy the dollar in huge volume in order to buy the oil necessary for their economies to keep going. Every country needing to buy the dollar keeps it's value up, in the forex market. This is also the reason for our alliance with Saudi Arabia. Times are changing though and since China buys the most oil they want to buy oil in the Yuan and eventually have it SOLD in the Yuan, but if that happens the dollar will no longer be the defacto world currency, its value will no longer be buoyed by the oil industry. This is happening slowly, but right now China has started selling oil securities ( unfair trading practices ) in the Yuan which makes it possible for them not to buy US dollars each day. That's why they've imposed a tariff also, in addition to competition in high dollar electronics. This should be interested to everyone who relies on US dollars to live though, because if the world market does turn to the 'Petro Yuan', the value of the dollar will go down significantly, it's possible the buying power of our savings could shrink alot, etc. Not only that China has the power to crash the US dollar by dumping it all on the forex market, because it has collected so many of them due to our love of their stuff, that is the meaning of Financial Warfare, Economic Warfare, etc. because it would cause instant hyper inflation. One more thing, this is the reason for our endless wars in the middle east, and our backing of Israel other than religion. If you look closely every war has been in response to changing the currency in which oil is sold – in that respective country from a currency we like to a currency we don't like. That's why we can't stop going to war because if the oil is sold in another currency the dollar loses it's value, and the US is no longer a superpower. That's why you always hear someone grumbling wherever there is news playing 'this is all about the oil', 'dang oil', etc. That's why. One more thing, a mind bender – since oil is sold in the US dollar, and the Federal Reserve prints US dollars for free basically, that means the US govt. gets it's oil essentially for free. Anyways, look out for a time when you need to actually buy and hold Yuan, diversify your portfolio of currencies. Namaste

  16. You're awesome, I don't usually follow politics but this has been thrilling to watch. Keep pumping ecom news and history content 👏👌

  17. Sarah! I would love to join the Dropshipping Club/Have a Membership, but I don't know how to find that website or link to access to it…

  18. no so long as amazon doesn't take advantage of tax payer money, trump has nothing to do with what Amazon is doing he's just making sure they don't take advantage.

  19. In 2014, China surpassed USA as #1 in GDP, where just 14 years before, US GDP was 3 times that of China. It's the first country in history to do so and they continue to pull ahead at a constant rate. I personally know of efforts by China to invest, provide loans to governments, build ports and expand their trade network in South America and the Caribbean. That's on the US doorstep. Even within these countries, there are thousands of Chinese immigrants establishing businesses that provide these sort of goods, and the numbers are increasing.

  20. You forgot to mention chicoms did this for many years before trump was elected. Due to dumb asses like obama taking zero action.
    Liberalism….find a cure

  21. China is the biggest enemy of USA and really the world. Traitors in USA politics have sold America to China. Tariff them to death. Buy from America.

  22. I have a Facebook store right now using Shopify Lite. I have great merchandise, but its hard to get anyone trust you. Oh yea…great shower scene on the airplane 😉
    see you at High 5ive Bargains ©

  23. Chinese silk road is going to murder the U.S. better learn how to grow your own food and bake your own bread. Dont trust anyone who think American empire will rule for ever. Every empire falls, so get the lube ready for yourselves.

  24. Have you ever took an economics class? Seriously… The USA and China have already been in a trading war and the US has been losing. Before Trump, the US had a 500 billion dollar trade deficit with China. On top of that, China steals 600 billion dollars a year worth of intellectual property from the US. China doesn't let our products in while dumping theirs in. Not only that, this "free" trade is hurting American jobs. Example: NAFTA caused the loss of over 40 million jobs. Trump is fixing our wack trade deals. Everything I said can be found on government websites like us census and us treasure. Further more, the US takes a hit on their GDP because all these jobs are in other countries like China. GDP – goods and services produced within a countries borders. Let's not get into how this affects the multiplayer effect because at this point you're lost and scratching your head with your deep fried lookin ass hair. That being said, learn what a trade war actual is.

  25. Right now the USPS delivers small items from China for free ( CA, AUS,NZ,Europe etc postal services do also) and Trump wants to end this nonsense. That is why you can buy an item for $1 with free shipping all the way from China but a local USA seller will have to charge $5 or more just for the shipping-crazy! (btw who do you think ends up paying the USPS for the shipping? Yup, us sucker taxpayers of course…..yer welcome China!!)

  26. Hello Sarah,
    To understand how the world works, you must first know all the facts. I do not know all the facts and never will, despite 11 years of research. The world is guided by a global conspiracy that will result in what they refer to as a New World Order. Most politicians are only puppets in this game, which is why most politicians break their promises, as their allegiance is to the conspiracy, as opposed to the people. To learn more, read books by Antony Sutton, Carroll Quigley, John Robinson, A. Ralph Epperson, and more.Go to Amazon or Google and type these authors names to see a list of the books, some can be found on the web for free like John Robinson – Proofs Of A Conspiracy (1798). I appreciate you tell the truth as you know it, but hope you will learn more, to further this information into the public domain. I appreciate your honesty.

  27. I don't understand why the United States does anything to strengthen China which is a Communist country that we are technically at war with. We are in a position of Armistice with the North Koreans who were backed by the Chinese during the Korean war. If it weren't for the Chinese, our soldiers would have finished the job with the North Koreans in 1953.

  28. Is there a way to source newly manufactured goods through South Korea, Taiwan, Vietnam, etc? I would like to bypass China. I noticed some options on Alibaba and am wondering if these places have worked out for others. Thanks!

  29. So what if you want to sell an item that is on the terrif list (like leather gloves), are we covered by simply having a TOS which states :(Import duties not included), or are there Plugins/way's to automatically calculate what the terrif is, and have it prepaid?

  30. this woman is definitely not your average digital marketing expert. this is a legit entrepreneur who knows her way not just around the internet but around the actual business world and the economy as well. i can tell that she is a good mentor. if i ever get enough money to take an online course, i'm gonna take hers.

  31. I have to say, this is a great video, and even more impressive are the comments. I honestly expected to scroll down and just see a lot of Trump hate speeches based of fake or inaccurate information. I'm just not getting into drop shipping, but I've been importing and exporting from China for awhile. The media is quick to blow up about a trade war because it gets attention, but they always fail to mention the reason to tariff increases, which would help people better understand what will be effected. Unless you're trying to dropship washing machines, raw ore, or a handful of other items that other countries have violated our trade agreement on to save cost, it's not an issue.

  32. Thank you for this video, it helped me to understand more about China's political moves in my country (Italy).

  33. Nice video but I say your wrong, unless you overlooked my area of purchasing. Lawn equipment with 2 and 4stroke engines, prices are increased slightly but "shipping"?? That has quadrupled since December.
    This trade war is stupid. There is only one people who will suffer economically from this and that is us, here in the US. The only way to compete in a global economy is produce, meet the global demand in a market and export. We have a man who hasn't paid taxes in 30yrs, hasn't had any successful business endeavors only failures, who doesn't listen to his educated advisors, is credit rich, who has dramatically increased our national debt,…and he is in charge of our economy? We will feel the repercussions of his failure to think things through, for generations to come.

  34. As a manufacturer and exporter in China, we don't want the trade war at all. Many customers from North American and Europe require the OEM services, they just need to focus on brand marketing, sales channels, and then get most of the margins into their pockets. I really don't understand that the average profit rates in general industries here just 1-10%, basing on the EXW costs not the sales prices in Walmart. Have we gone too far?
    You're smart, and every Chinese will agree with you that Mr. Trump's target is China 2025. Time will prove that Mr. Trump didn't contribute much to USA people, but put a strong and worth of respect competitor in front of China. Given the historical experience, usually we'll collapse from inside if we stay in an easy and comfortable environment too long, that's why China got so weak and poor in the 19-20th century. Trade war reminds us must to keep the mind clear.
    With respect to "Why Chinese Products Are So Cheap", I wish to add that at the very beginning because of the cheap labor cost and cheap raw material resources. Then the industrial concentration also made the logistics cost down, optimized the Supply chain. After that and before "one belt one road", the strongest inland transportation net (including highway, high-speed train, airports, sea & river ports ), energy supply nets and efficiently administration managements help to reduce the manufacturing costs a lot. Since "one belt one road", China's huge production capacity keep stable and developing. You're right, that's also the very important reason.
    Actually, Chinese people like the USA much more than Japan, Canada, UK, Australia, etc., it could date back to President Roosevelt period in 20th. The USA once helped us pretty much during World War II, Chinese people always keep in mind and be grateful for that timely assistance. Sometimes we would rather ignore the political strategies at the back, which still bring troubles to us nowadays.
    Anyway, it's just my personal opinion.
    Thanks very much for the lovely video, lovely young lady!
    Let's cross finger for the world peace, and trade peace! 😀

  35. Regarding epacket shipping (assumably), the USPS made a request to the PRC which was "conditionally approved". The most that I could find out is that international rates will be reset upon the approval of the PRC and as to when, it's anyone's guess. These things don't happen quickly. This will affect the dropshipping industry and those smaller sellers who buy their materials from China, among others.

  36. For someone who really loves capitalism, Trump really doesn't like big chinese manufacturers having a big advantage over the american equivalent so he wants a trade war, HAHA

  37. Sarah can you please make a video specifically relating to The Univeral postal union and The U.S withdrawing from it. I'm trying to understand how high shipping rates might increase.

  38. "Sarah… You're an amazing girl. Absolutely amazing. Everybody is talking about you. Nobody YouTube's quite like Sarah. Just tremendous" -Trump

  39. Wow this video is awesome China's basically buying the world and Sarah here is all I'm not saying anything political the feel free to tell yourselves apart in the comments section below

    Me: 🤣🤣🤣🤣🤣🤣🤣🤣😏😏

  40. The US/China trade imbalance is .5 TRILLION $ yearly, in Chinas' favor. That is neither fair or sustainable. Plus the atmosphere that permitted tiananmen square is not only still there but even more pervasive. Beware of this country

  41. You are a natural teacher Sarah. I've been worried about this subject for a while but had no idea how to sus it out. You made it all seem so simple in your explanation. Thank you.

  42. Very informative! But what about the recent announcement of tariffs on another $300 billion of Chinese imports that hes recently spoken about on the news? Are those $300 billion goods also not the goods that by any meaning could be found on aliexpres or any dropshippers use?

  43. but he wants to ban epacket so shipping will be more expensive and epacket wont be available anymore. So for one item from aliexpress it will cost you around $40-$80 for postage to USA, Australia ect.

  44. People criticize President Trump on the trade war with China but remember people when you stick an object up their ass they scream when you take the object out they cry !#!#!##

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