With all the talk of tariffs, I’ve seen more or less this argument:
“Once the tariffs go in place, companies will start manufacturing in the USA and that’s good thing.”
However, when I think about being able to manufacture something like a laptop computer, or a car, these are both operations that require a lot of things:
- the input components to build the thing
- skilled labor that can manufacture the thing
- supply-chains that are in place from initial build all the way to retail
The premise seems to be: “OK, tariffs go in, someone INSTANTLY sets up a company that manufactures X, then USA wins”.
However, for someone to want to take the “bet” on setting up a really expensive factory, they’d have to believe that the tariff will be in place a long time, because if it is NOT… then they have made a terrible investment and the new factory will be instantly non-viable.
Am I crazy? Am I missing something? I understand that it would be great if we had domestic manufacturing but it seems like the people that are behind tariffs think you just snap your fingers and there is a factory cranking out laptops, when in my understanding this is a process that requires a huge amount of money and time.
My thinking is that the amount of people / companies in the USA that have enough capital to start up a manufacturing company like this want to make sure it’s a relatively safe bet before pulling the trigger, and if past tariff behavior from Mr. Trump is any indication, we can’t count on these tariffs being present for a long time.
MAGA Morons are fantasizing that all these new high-paying manufacturing jobs will be coming back, but thats not the plan.
The new factories will be sweat shops without safety/ health/ environmental regulations, paying minimum wage (or less, if they can end it). They will primarily rely on teenage child labor, using young people who are desperate for jobs after all the fast food jobs have been automated.
Thats the Sociopathic Oligarchs’ dream.
only the trumpers think so, and no its not, its actually more expensive, you have to build up your own factories, manufacturing plants which cost billions and years to build, and luring TALENt, is going to be very difficult
We have a very difficult time recruiting workers to existing manufacturing plants that have very competitive salaries.
do people really think
Gonna stop you right there. No. The answer is that no, they don’t think.
Trumpers are actually dumb enough to believe that factories and jobs pop from the ground overnight and without any costs.
And without immigrant labour. Just good old obese workes who keep the gears spinning.
And we haven’t even addressed the whole reason manufacturing left in the first place. It’s so much cheaper to do it overseas, even accounting for shipping. It will cost America much more to produce items internally–and who is going to buy these extra-expensive items? America is a service economy and most people are working at Walmart or McDonald’s. These people can barely afford the cheap Chinese version, much less the expensive American version.
So I guess they’re hoping wages will increase more than the extra expensive incurred by making our own items? Not going to happen, not in a million years.
That’s where the child labor comes in. I wish I was kidding.
Prison/slave labor as well.
Consider:
scenario today:
labor cost for product is $3, which goes to a chinese worker. total product cost is $5.
scenario “manufactured in the USA”:
labor cost is $6, which goes to american worker. total product cost is $10.
the product gets more expensive, but the extra expenses partially go to an american worker, which again will spend the money in the US economy, so it doesn’t really cost the national economy that much.
however, the extra $4 in the “manufactured in the USA” scenario go to american middle-management and “investors” a.k.a skimmed by the owning class. that is why the people would still lose out. that is why “home-shoring” in itself is not enough; a wealth tax is also needed.
Of course it works out if you throw any numbers in that you want. Minimum hourly wage in the US is 7.25-ish in Alabama and the rest of the decrepit South, to 16-ish in California. I googled minimum wage in China and its roughly 3.40-ish at its highest. At the worst, China is half as expensive, and I wouldn’t be surprised if the disparity between the actual industrial areas of China and Califonia/Colorado for example might be 8x.
Whats happening here is that the poorly educated South is wanting me to subsidize their lack of marketable job skills by making me pay extra for American goods instead of Chinese goods.
And don’t forget that the extra money these Americans earn will be partially consumed by the extra cost of living anyways. Not to mention the years or decades of investment it will take to get factories set here anyways, all for low-skill, physically demanding, and mentally unengaging employment.
Manufacturing should be automated anyways because nobody should have to sit at a conveyor belt all day and toil their lives away assembling dumb trinkets.
And we haven’t even addressed the whole reason manufacturing left in the first place. It’s so much cheaper to do it overseas, even accounting for shipping.
Well, I think the idea is that with the tariffs this will no longer be true. There will be a Chinese widget that cost $5 from China with $90 of tariffs on it (making it $95 to the end user) and an American product that costs $55. That American one is only cheaper in a tariff’d world.
The other problem is that the $55 American made one will mysteriously become $94 because doing anything else would be leaving money on the table and therefore unconscionable to American business owners.
Tariffs have a nasty habit of making local goods increase in price accordingly too.
This is exactly the thing I can seem to get anyone to agree with me on … Imported goods will never become significantly more expensive than American for the reason you just said…
There’s a lot of money in figuring out the right margin below the imported product such that they’ll lose some sales but ultimately profit more because of the increased profit margins. Not that you were seriously saying it would be a dollar cheaper but most I talk with tend to think that difference is much bigger than I expect which tends toward single digit percentage differences
But they’re not going to increase wages to account for us having to spend 55 dollars on something that used to cost 5. So the end result is just that people end up with less overall. I’m cool with limiting consumerism, but this isn’t the way to do it imo. And it’s not going to make us “richer” as a nation.
In both scenarios the profit margin is removed, or the customers are bearing the significant increase in cost. Hence the recession - the stock market plummets or inflation goes up. Or both.
Do people really think…
Imma stop u there
I work in a Canadian manufacturing company that is owned by a large American conglomerate. When Trump started all these shenanigans, there were rumors floating around that head office was going to move the shop to the US to save money.
Apparently they did a cost/benefit analysis and determined that it would cost them far more than they stood to lose, by moving the operation South, and the returns wouldn’t even begin to come in for at least a decade. They decided that raising their prices to absorb the tariffs, was by far the better option. Even the projected losses were manageable compared to the cost of disrupting their supply chains.
All these tariffs are going to do, is make everything.ore expensive. Nothing else is likely to change.
Trump’s notional plan is to replace income/gains tax (on the wealthy) with tariffs. I have not heard of any meaningful uses being reserved for other nation’s retaliatory tariffs. Logically and morally they should be going to relieve the burden of the US tariffs, but I have never heard how that might be intended to be accomplished.
The last time Trump did this in his first term his tariffs ended up causing businesses to move out of the United States.
Why would you move to the u.s, and have to pay tariffs to every other country, except for just one?
Also because these tariffs are so overreaching they also include component parts. So you can’t build your laptop because all of the chips are built outside the US so by being in the US you actually increase your exposure to tariffs. Outside the US you can build your laptop without having to deal with tariffs on every single component, then let Walmart pay tariffs to import.
The problem is you appear to have an IQ greater than that of 6 and so you’re probably not a MAGA supporter. Trying to apply logic to these idiots is a waste of time.
Not to mention any new factories will have drastically fewer jobs than the factories that left due to newer factories being highly automated. The cost of retrofitting existing factories has stopped many companies from upgrading to keep higher their quarterly profits for investors. If they are forced to build, they will invest in money saving long run cost savings like automation.
Yeah, this is a great point. A fully automated car company in the USA is great for those who want to buy cars, but for those who want a job building cars, it does nothing. The observation that these NEW firms would be set up with massive automation makes perfect intuitive sense to me, because who’d invest in a brand new manufacturing firm and use last century technology to do so?
Assume that, for the first time in his life, Donald meant what he said. Pretend that he won’t change his mind or panic, and assume that the same GOP which keeps missing Speaker of the House election layups won’t break and let the Democrats take the tariff power away
The midterm congressional elections are always a swing to the other party. The Democrats are more likely to take at least one chamber of Congress than Trump is to say something dumb. But let’s assume that for some reason they only take one, and you get gridlock enough to preserve the tarrifs until the next POTUS takes office in January 2029.
A factory would need to break even by that time to be worth a quick investment. And not just break even, but leave you with more wealth than if you just bought a bunch of crypto and stayed home until this all passes. And if you signed an deal today, your break even points might be as soon as only 45 months away.
You can’t even get a car loan with a team that short.
If Nike shoes go from $200 to $300 from tariffs, there is a big opportunity for crossborder shopping in Canada or Mexico, where in Canada they would be $226. And then more opportunity to smuggle them with volume discounts for US ebay listings. A peer to peer smuggling network takes away from “backbone of retail economy”, and then lowers value of US official market such that making $300 shoes inside the US costs a big investment, and still loses to smuggling.
Apparel industry jobs tend not to be as glamourous as Boeing, Catterpillar, Deere jobs which are pretty much only US manufacturing export sector than defense. Losing export markets from hatred of US, doesn’t get replaced with good jobs in apparel, or exports of expensive US apparel.
There’s also a good chance that competing global brands take massive market share from US aligned companies, and less scale will mean less marketing budget.
I’m smart enough to understand that setting up domestic manufacturing is much more complicated and expensive than I could guess. I also know that getting a project like this from concept to steady, reliable, marketable production takes years.
I also know that the people who think this is quick and easy will proudly wear their MAGA hats today.
It is a simple solution to a complicated problem. For a segment of society, it sounds good enough.
“But you just like… screw stuff together, right? Cut the basic materials to make the parts, put it together, box it up, ship it out, right?”
- Someone I legitimately spoke to once. We were talking about assembling TVs.
I find that people who’ve never assembled anything more complex than Ikea furniture or something more technical than changed a pipe or switch in their home, tend to think production exists in exactly two levels: Low-tech, hand-tools-at-most labor which can be easily spun up because “anyone can do it”, and ultra-high-tech stuff like computer chips which need highly specialized factories, but where a few factories can mostly satisfy nationwide demand.
