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.
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.
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.
IMO there is something more at work here. I believe he is collapsing the economy on purpose and evaporating everyone’s savings, forcing them back into the labour force under any means. They want to go back to factory towns where workers have zero agency and are at the mercy of their employers. That is the end goal here, the rest of it is just the hand waving show to keep everyone distracted.
I find it increasingly hard to tell the difference between a mastermind playing 7D chess with the world, and someone just acting randomly and implementing all kinds of policies at a whim.
Putin is doing the planning, Trump can’t think
Trump was so proud of himself for using the word “reciprocal.” He likely didn’t know what it meant earlier this week.
I think you’re right that he’s collapsing on purpose, but I think it’s because it’s what’s best for Russia and it’s profitable for the wealthy long term, being able to buy back into the crashed market. But also the control thing too. Just a bunch of shitty things.
It’s not that complex or Machiavellian.
Look at what rich people have done after every recession of the past 40 years and how what’s happened to their wealth after the recovery. The economy crashes forcing middle-class people to sell off what scant assets they own. Even people on the lower end of upper-class tend to sell off assets when the stock market crashes. Super rich people who have enough money to weather the economic downturn buy the dip, gobbling up all those assets people are selling. Then when the economy recovers the rich people make out like bandits (which they are).
That’s all that’s happening. He’s tanking the economy so Musk and his other rich friends can buy the dip and increase their wealth even more when the economy improves.
I don’t get it. Why would anyone be forced to sell their assets? Do they invest with money they actually need? They shouldn’t. Just wait out the storm.
Two things:
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People see because they see the markets going down and want to get out before it hits bottom.
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The bigger issue, though, is that a hell of a lot of people will lose their jobs and have no money. Remember the Great Recession? When the job market is that shitty and you lose your job, there aren’t other ones available. No job means no income. You can apply for unemployment insurance, but that only covers a fraction of the income from your last job. So people can’t afford to pay their bills. When you can’t afford utilities, rent, gas, etc, but you have a 401k sitting there, it becomes the only option to pull money out of that. It’s a super shitty decision to have to make, but when it’s a question of losing your home or sacrificing your retirement, short-term material needs win out.
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Time will tell. It’s all about the layers, but if you look at the current situation at face value, it makes very little sense, ergo something more sinister is a foot 3-4 steps down the road.
It makes complete sense if you are looking at it from the perspective of an oligarch. They are just trying to tank the economy to hoover up even more assets. They’re banking on an eventual recovery, after which they’ll be even richer and more powerful than they are now.
As with most things in life, assuming some grander Machiavellian scheme is usually wrong. People don’t think and plan like that outside of movies and TV. Most people, especially the very rich and powerful, only plan for the short term.
There is no 3-4 steps down the road. They’re just trying to repeat exactly what they did during/after the COVID recession. And the Great Recession. And the '01 dot-com recession, etc, etc, etc.
Except he is using a playbook built by other people that we’ve only seen the gist of. This is manufactured, not eventual. He is also removing all consumer and worker protections. There is more too it, but keep turning a blind eye to just “more of the same” and see where that gets ya. I am saying the same thing as you, but I am alluding to it being a byproduct and not the simple end goal. They want housing under their thumb as well as worker protections and healthcare. There is malicious intent there, I’m sure of it. It is more than the accumulation of wealth.
I’m not turning a blind eye to anything. I’m just not making up conspiracies where there’s clearly none. There isn’t some hyper intelligent grandmaster planning everything out 15 moves in advance. This isn’t Lex Luthor or Doctor Doom running the show. It’s a bunch of morons whose understanding of economics ended with mercantilism asking ChatGPT how to run an economy.
You can make money on the stock market when it goes down
It’s the tech oligarchs. They’re doing their own gilded age. Their empires exist in the tech domain. Mostly IT services. They’re going after the whole pie. They want the entirety of American industry.
What they have in mind exactly is anyone’s guess. We’re not going back to the times of railroad or oil barons. We’re not necessarily going back steel and auto manufacturing. The future is in things like robotics, renewable energy, semiconductors, or whatever the future holds.
I think crashing the economy just to buy stock is old news too. The saying has become rather mindlessly echoed. They have relatively little to gain from this. The rich hold 90% of stocks. There’s little to extract from the remaining 10%. Plus I think people have believed too much in the idea that stocks are a shell game. It’s not as much as people think. The markets are still based on tangibles meaning actual industry. That is what the oligarchs are after. What’s better than owning stock in the industry is owning the industry itself. Complete total monopolies just like the gilded age and just like they’ve monopolized IT services sector.
Fun fact: the top 10% now account for approximately half of all consumer spending which equates to about 30-35% of US GDP. First time since we started tracking it and first time in a long long while that’s happened. Wealth inequality has indeed matched the guilded age. Maybe even surpassed it but it doesn’t quite seem like it yet. Just matched.
Also the stock crash isn’t about stocks. It’s about capital and labor investment. When things go bad, the small to medium sized businesses struggle the most which then Blackrock and the like swoop in to buy them all at steep steep discounts. That is ultimately a smarter long term play than buying “slightly” discounted stocks. IE the stock play is as you said. It’s mostly rich folks that own it but the rich don’t own all businesses yet. Recessions are a chance to do just that which from looking around we already seem to be in with the amount of layoffs and small to medium sized business struggling mightily. The internet omni-presence and ability to earn money sitting at home is too strong for a standard recessionary environment and indicators to show up to the same degree as before. Or at least that’s what I think.
They don’t “think” in general. Abstract concepts and long-term consequences do not trouble their minds.
do people really think
Gonna stop you right there. No. The answer is that no, they don’t think.
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
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.
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.
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.
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.
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.
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.
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.
