World News

Who is going to invest many millions in setting up a business to make something when they have no idea what fuck-nugget will do next week that might fuck them over? Where are they going to source the raw materials when no one will want to trade those materials to a market that wants to fuck them over? How are Americans going to pay for these goods that will be more expensive than they are under the previous set up? This is abject stupidity that makes America poorer. There is no Eden at the end of this and Joe Public will bear the brunt of it.

But tariffs are the only thing that actually forces companies to put the factories back to the USA. Or do you have a better idea?

I mean no... And, how about accepting that the US is no longer a manufacturer, and that's just fine in a global economy

U.S. factories in most cases cannot produce goods that are competitive in a global market. Our labor costs are too high.

This idea that we can revive American traditional manufacturing of basic goods is a complete fantasy. The factories in Vietnam aren't going anywhere, because they will still be selling to the other 95% of the globe outside the U.S. Even if factories are stood up in the U.S., they will be constrained to producing higher-priced goods exclusively for the domestic market, with all the attendant inflationary impacts from start-up costs and higher labor costs.

Meanwhile, retaliatory tariffs from other countries will cause the collapse of U.S. exports. We'll lose markets for the sectors where the U.S. is still competitive, like agriculture, advanced manufacturing, and even services.

Trump's approach is similar to the failed development strategy of import substitution industrialization, except in this case he thinks it will cause the U.S. to reindustrialize. In any case, it will fail for the same reasons ISI failed in Latin America.

I think you're kind of being unfairly downvoted because it's definitely underappreciated how much tariffs are used in modern trade deals.

Putting selective import tariffs on certain goods (like say car manufacturing) might be a wise move if you want to encourage the US to develop a manufacturing base. It's worth noting that the US, and most other countries have been doing this selectively for years.

This is reeeaally far from the tariffs that have actually been anounced though, which are the highest rate the US has had in around 100 years, and applied pretty indescriminately. There are some goods that the US just can't produce itself (like certain rare earth minerals that aren't in the USA) but even worse, because of the insane logic of applying them to countries as they have been done, it opens up this type of event:

• A comany like Apple might assemble laptops in the US, but import parts like chips from, say, China.
• They now have around a 40% tariff on all chips, which is really going to drive up cost, and leaves them with two options.
• Option one, they bring all manufacturing into the US, which would take a long time to build up the infrastructure, and still really ramp up the price because wages in the US are so much higher than they are in China
• Option two, they outsource everything to say Mexico or Canada who don't pay the tariffs on Chinese chips, and just pay the wholesale import tariffs are needed to bring things from Mexico/Canada to the US. They also get to skip out all the reciprocal tariffs that other countries are placing on the US in retaliation for the recently announces ones when they import out to, say, Europe.

Even option one is bad, because Apple might sell laptops internally, but the newly increased price makes them super uncompetitive with rival firms overseas, so it might still lead to a loss in overall jobs for US workers.

I'm not pretending this doesn't suck - but US based international companies like Apple have a clear incentive to just forgoe the US as much as possible now. This kind of risk is why countries have traditionally been very conservative with changing tariffs.

I think you're probably right that there might be an argument for countries to be less conservative than they have been, but the US government just cranked up the dial from 0 to 11 and we're all about to find out what that might look like in real time.

Maybe calculated tariffs on commodities where companies are contemplating outsourcing, but that's a step you take in advance in order to dissuade their action. This is like making the whole school sit with their heads down through recess because one specific kid was unruly.

Edit: There wasn't even an unruly kid. The Principal is just vindictive, has a hangover, and hates children.

You need to have a plan in place before doing this to even think about bringing manufacturing back here. And tariffs need to be like the last part of the plan

You can't just flip a switch to have manufacturing moved to the United States overnight or even five years. Not to mention that even raw goods needed to even start the process that are being tarriffed like aluminum just doesn't come out of nowhere. This is a dumb sledgehammer approach that's going break more things than it fixes