Ted Bauman is an investment adviser and contributor to Banyan Hill Publishing who is the editor of Alpha Stock Alert, Plan B Club, and The Bauman Letter. As a man who travels around the world, he was recently in South Africa and took notice that many of the products in the country are made by American companies. He has also noticed the same trend in other countries like Switzerland and Germany. While the American products he bought were made in South Africa, the companies or copyright owners who invented them get a part of the sales.
This money does not technically come from “exports,” because a company must have some kind of presence in the U.S.A. to qualify them as so. Under president Trump’s export laws, those who hold licenses and foreign subsidiaries are not included. Ted Bauman wants investors to understand that this makes a big difference. The United States has a trade deficit with many countries around the world but part of its deficit with China becomes a surplus, of sorts. Bauman has revealed that there aren’t any companies that need to manufacture goods in their own country to be shipped elsewhere. In fact, if companies based in the U.S.A. manufacture their products overseas where they sell them, it saves them money on the cost of shipping.
Many American companies make a lot of their money through the licensing of their brand name and then selling products overseas that are made overseas. This means that manufacturing does not need to happen in the U.S., and Ted Bauman wants investors to know that they should watch their investments in American companies closely if they were made with foreign subsidiaries. For example, Apple does a lot of business in China, but if a trade war took place, the profits of the company would be affected negatively. Ted Bauman feels that president Trump should slow down on his talk of trade wars as these will certainly have an effect on the stock market. Already, we are seeing that Canadians are vowing to buy less products from American companies and we are also seeing less imports from Canada due to tariffs.