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I don't know anything about economy, so this is a question not.. a counter, but: > In a functioning market, local suppliers are likely to raise prices in respo

I don't know anything about economy, so this is a question not.. a counter, but: > In a functioning market, local suppliers are likely to raise prices in response to the tariffs, as they face less competition. Is that entirely bad? The whole "US Made!" tagline of old stopped becoming possible because we couldn't charge wages low enough to compete with foreign dollars or foreign slave wages. Raising the cost of X item so that it is actually able to be produced locally would seem to, conceptually, bring that type of job "back". With that said, there's the obvious opposite of now every item US made is meaningfully more expensive. Seeing as so much of what we buy is made offshore, this seems to effectively raise the cost of living. So, I don't really have any answers.. but hey, I don't work in economics :)

Heliosmaster 8y ago
It will bring jobs back if there are enough people who can afford the local made product. And I wouldn't be sure about it, since in the last few years we have witnessed a thinning of the middle class, and the lower parts of the population might not afford to pay a premium because it's locally made. It's hard to go back from a race to the bottom
- tomp 8y ago
  > if there are enough people who can afford the local made product Eventually, it will keep more money in the country, meaning people will also be able to afford more (after all, they'll be being paid the higher, local wages now). Compare with e.g. Switzerland, where most people have really high salary (by EU standards), and pretty much everything is really expensive, but because of the high salaries people can afford it.
  - samastur 8y ago
    This works only as long as people having these high salaries do work with high added value and you are not relying much on international trade. Otherwise they can be effectively undercut by people who can do the same thing cheaper.
    - tomp 8y ago
      hence tariffs.
      - throwawayjava 8y ago
        The argument that Switzerland provides a model for high tariffs creating wealth is... especially ironic. Switzerland is one of the least tariff-encumbered economies in the world, reguarly topping out various free trade indicies [1]. And in Switzerland's case, that's almost certainly causual. Average salaries in Switzerland are so high because of the disproprtionate role Switzerland plays in EU and global banking -- a role that wouldn't be possible if Switzerland didn't embrace free trade. So, if we're going to follow Switzerland's lead, we would roll back tariffs. Switzerland is more akin to the EU's version of Massachusetts or New York, and Zurich is the EU's version of Manhattan or SF. It's the sort of economic zone that will always exist in a large economy like the US or the EU. The population is disproportionately made up of citizens from one or two cities/metro areas, and those cities have a high concentration of highly educated and highly paid individuals typically focused on one of a few industries. Consequently, even those employed outside of these high-paying industries make more than average compared to the rest of the country/bloc. Situating ourselves similarly to Switzerland requires placing the US very high in the global value chain while maintaining a global order of very low trade barriers. Which has always been the neoliberal agenda, at least ostisibly. In other words, if we want to emulate Switzerland, we have to do exactly the opposite of the Trump plan -- continue offshoring anything lower in the value chain, continue insisting on low trade barriers, continue dominating everything higher in the value chain. Obviously, even if this strategy works for the country in aggregate, it's going ot have definite losers in a country as large as the US. On a (very!) related note, the US and Switzerland currently have basically the same PPP. [1] https://www.heritage.org/index/country/switzerland https://www.heritage.org/index/country/switzerland
        jonatron 8y ago
        You didn't explicitly say it was, but you didn't make it clear that Switzerland isn't in the EU.
  - s73v3r_ 8y ago
    That only works out if those higher salaries get paid to the people who need them, and that the majority of those profits don't get sucked up by those at the top. Given the last 30 years or so, I really do not believe that those at the bottom will have any benefit. They'll still get the same crappy wages, and now everything is more expensive for them.
maxerickson 8y ago
They will raise prices regardless of their cost structure. The millions of unfilled manufacturing "jobs" are ~$14 an hour jobs that have significant upfront training requirements, so I doubt that onshoring lower skilled manufacturing is going to lead to much of a renaissance.
- oblio 8y ago
  Even better, they will re-open the factory but because of better tech, instead of the 5000 employees from 20-30 years ago, they'll have just 100, many of which will be either remote or specialists who move in for this exact position. Not the 5000 local blue collar workers :)
  - throwawayjava 8y ago
    Advances in manufacturing automation is actually the strongest argument in favor of rebuilding a domestic manufacturing base.
    - oblio 8y ago
      Yeah, but are tariffs the best way to achieve this?
Brockenstein 8y ago
>The whole "US Made!" tagline of old stopped becoming possible because we couldn't charge wages low enough to compete with foreign dollars or foreign slave wages. Not exactly. For starters being able to buy products for cheap is generally good for consumers. They have more money left over to buy other things... Secondly, the U.S. have actively fought to keep wages low in developing nations. For example: https://www.thenation.com/article/wikileaks-haiti-let-them-live-3-day/ https://www.thenation.com/article/wikileaks-haiti-let-them-l... It's easy to cry about low wages though and how that "hurts" American manufacturers. So here's the thought experiment, all workers on the planet now make at least U.S. federal minimum wage. We can now compete with Haitians for underwear manufacturing. Underwear now costs a lot more than it used to. That's not a win for consumers. And all those minimum wage underwear manufacturing jobs aren't exactly a boon to the U.S. economy, go figure. Thirdly, no nation is going to be able to produce every sort of product itself efficiently and cheaply. Trade is and always has been important. Other nations can do some things better and cheaper and it's not always labor costs that are the linchpin of being out-competed. Fourth, people imagine peak manufacturing as some sort of ideal that we should be tripping over ourselves to get back to. It's a fools errand. No matter what a lot of manufacturing jobs are never coming back, ever. It's never going to be like it used to be, automation will have seen to that. A lot of people don't understand the economy, but they have an idea how the economy should be. It's more terrifying than my mom offering to fix my computer, because moms know best.
- netinmate 8y ago
  You are right the economy is very complicated, but it seems that the only factor anyone discusses is what's good for the "consumer". I think the "consumer" is a really bad success criteria. I don't really care about what's good for the "consumer", I care about what's good for "the employee", highly skilled jobs, higher wages, and more jobs. These things can't be driven by lowering the cost to consumers, we'll get what we have now, more money flowing to the 1%, and the middle class being eliminated.
  - mistermann 8y ago
    (This isn't directed at you, just thought I'd put it here....) I care about what is good for everyone - employers, employees, the overall country, and the overall world (all these same people in other countries), on a long term sustainable basis. Whenever one reads these threads, rarely does one encounter someone who's doing anything other than talking their book, or supporting their personal ideology of "how it should be", usually based on reading articles written by others that support their ideology. I think all of us would be better off if after finishing writing a narrative or explanation that supports our personal ideology, we then turned around and tried to poke holes in it. It's child's play to rationalize why it's a win-win situation to outsource menial labor to 3rd world countries, but what happens when one of those third world countries happens to be a giant, populated by incredibly hard working and historically accomplished people, and a very smart government who remembers mistakes that were made in the past? What happens when this country isn't content being a dumb, low-margin manufacturer, and decides it wants to take over the entirety of the process including the design? Sure, the West currently still holds a lead in much of technology, but where does this bizarre idea come from that it will last forever? Because we're more "creative"? Is there strong evidence for this? And do you also happen to simultaneously hold the belief that the peoples of all nations and cultures are essentially the same (a paradox one commonly sees in liberal leaning technical communities)? Part B of this rant would be the folly of optimizing for GDP, which is another complicated and potentially very dangerous mistake for what should be fairly obvious reasons. Or the recently popular notion that humanity's highest priority and morally imperative goal should be to normalize GDP and standard of living across all members of humanity on the planet. Different cultures optimize for different things, some things require more work to achieve, but that often means less time for family and leisure. That said, I'm also strongly opposed to certain countries messing things up for entire regions of the world for decades on end with no end in sight. Life is a hell of a lot more complicated than you'd think it is, if all you had to go on was most people's personal perception of it.
jayd16 8y ago
This can also hurt US production. This makes US goods more expensive, not only for Americans but for everyone. Now US goods look even worse to any would be importer. Maybe this policy forces Americans to buy American but unless we make up every lost export with a domestic purchase it only hurts. And this is before we even consider retaliatory tariffs.
s73v3r_ 8y ago
Well, in the case of these specific tariffs that the US is imposing, they're on components of things, not on finished goods. So it's actually going to be cheaper to manufacture the entire thing in China, rather than import the components and assemble in the US.

Heliosmaster 8y ago

It will bring jobs back if there are enough people who can afford the local made product. And I wouldn't be sure about it, since in the last few years we have witnessed a thinning of the middle class, and the lower parts of the population might not afford to pay a premium because it's locally made. It's hard to go back from a race to the bottom

tomp 8y ago
> if there are enough people who can afford the local made product Eventually, it will keep more money in the country, meaning people will also be able to afford more (after all, they'll be being paid the higher, local wages now). Compare with e.g. Switzerland, where most people have really high salary (by EU standards), and pretty much everything is really expensive, but because of the high salaries people can afford it.
- samastur 8y ago
  This works only as long as people having these high salaries do work with high added value and you are not relying much on international trade. Otherwise they can be effectively undercut by people who can do the same thing cheaper.
  - tomp 8y ago
    hence tariffs.
    - throwawayjava 8y ago
      The argument that Switzerland provides a model for high tariffs creating wealth is... especially ironic. Switzerland is one of the least tariff-encumbered economies in the world, reguarly topping out various free trade indicies [1]. And in Switzerland's case, that's almost certainly causual. Average salaries in Switzerland are so high because of the disproprtionate role Switzerland plays in EU and global banking -- a role that wouldn't be possible if Switzerland didn't embrace free trade. So, if we're going to follow Switzerland's lead, we would roll back tariffs. Switzerland is more akin to the EU's version of Massachusetts or New York, and Zurich is the EU's version of Manhattan or SF. It's the sort of economic zone that will always exist in a large economy like the US or the EU. The population is disproportionately made up of citizens from one or two cities/metro areas, and those cities have a high concentration of highly educated and highly paid individuals typically focused on one of a few industries. Consequently, even those employed outside of these high-paying industries make more than average compared to the rest of the country/bloc. Situating ourselves similarly to Switzerland requires placing the US very high in the global value chain while maintaining a global order of very low trade barriers. Which has always been the neoliberal agenda, at least ostisibly. In other words, if we want to emulate Switzerland, we have to do exactly the opposite of the Trump plan -- continue offshoring anything lower in the value chain, continue insisting on low trade barriers, continue dominating everything higher in the value chain. Obviously, even if this strategy works for the country in aggregate, it's going ot have definite losers in a country as large as the US. On a (very!) related note, the US and Switzerland currently have basically the same PPP. [1] https://www.heritage.org/index/country/switzerland https://www.heritage.org/index/country/switzerland
      - jonatron 8y ago
        You didn't explicitly say it was, but you didn't make it clear that Switzerland isn't in the EU.
- s73v3r_ 8y ago
  That only works out if those higher salaries get paid to the people who need them, and that the majority of those profits don't get sucked up by those at the top. Given the last 30 years or so, I really do not believe that those at the bottom will have any benefit. They'll still get the same crappy wages, and now everything is more expensive for them.

maxerickson 8y ago

They will raise prices regardless of their cost structure. The millions of unfilled manufacturing "jobs" are ~$14 an hour jobs that have significant upfront training requirements, so I doubt that onshoring lower skilled manufacturing is going to lead to much of a renaissance.

oblio 8y ago
Even better, they will re-open the factory but because of better tech, instead of the 5000 employees from 20-30 years ago, they'll have just 100, many of which will be either remote or specialists who move in for this exact position. Not the 5000 local blue collar workers :)
- throwawayjava 8y ago
  Advances in manufacturing automation is actually the strongest argument in favor of rebuilding a domestic manufacturing base.
  - oblio 8y ago
    Yeah, but are tariffs the best way to achieve this?

Brockenstein 8y ago

>The whole "US Made!" tagline of old stopped becoming possible because we couldn't charge wages low enough to compete with foreign dollars or foreign slave wages. Not exactly. For starters being able to buy products for cheap is generally good for consumers. They have more money left over to buy other things... Secondly, the U.S. have actively fought to keep wages low in developing nations. For example: https://www.thenation.com/article/wikileaks-haiti-let-them-live-3-day/ https://www.thenation.com/article/wikileaks-haiti-let-them-l... It's easy to cry about low wages though and how that "hurts" American manufacturers. So here's the thought experiment, all workers on the planet now make at least U.S. federal minimum wage. We can now compete with Haitians for underwear manufacturing. Underwear now costs a lot more than it used to. That's not a win for consumers. And all those minimum wage underwear manufacturing jobs aren't exactly a boon to the U.S. economy, go figure. Thirdly, no nation is going to be able to produce every sort of product itself efficiently and cheaply. Trade is and always has been important. Other nations can do some things better and cheaper and it's not always labor costs that are the linchpin of being out-competed. Fourth, people imagine peak manufacturing as some sort of ideal that we should be tripping over ourselves to get back to. It's a fools errand. No matter what a lot of manufacturing jobs are never coming back, ever. It's never going to be like it used to be, automation will have seen to that. A lot of people don't understand the economy, but they have an idea how the economy should be. It's more terrifying than my mom offering to fix my computer, because moms know best.

netinmate 8y ago
You are right the economy is very complicated, but it seems that the only factor anyone discusses is what's good for the "consumer". I think the "consumer" is a really bad success criteria. I don't really care about what's good for the "consumer", I care about what's good for "the employee", highly skilled jobs, higher wages, and more jobs. These things can't be driven by lowering the cost to consumers, we'll get what we have now, more money flowing to the 1%, and the middle class being eliminated.
- mistermann 8y ago
  (This isn't directed at you, just thought I'd put it here....) I care about what is good for everyone - employers, employees, the overall country, and the overall world (all these same people in other countries), on a long term sustainable basis. Whenever one reads these threads, rarely does one encounter someone who's doing anything other than talking their book, or supporting their personal ideology of "how it should be", usually based on reading articles written by others that support their ideology. I think all of us would be better off if after finishing writing a narrative or explanation that supports our personal ideology, we then turned around and tried to poke holes in it. It's child's play to rationalize why it's a win-win situation to outsource menial labor to 3rd world countries, but what happens when one of those third world countries happens to be a giant, populated by incredibly hard working and historically accomplished people, and a very smart government who remembers mistakes that were made in the past? What happens when this country isn't content being a dumb, low-margin manufacturer, and decides it wants to take over the entirety of the process including the design? Sure, the West currently still holds a lead in much of technology, but where does this bizarre idea come from that it will last forever? Because we're more "creative"? Is there strong evidence for this? And do you also happen to simultaneously hold the belief that the peoples of all nations and cultures are essentially the same (a paradox one commonly sees in liberal leaning technical communities)? Part B of this rant would be the folly of optimizing for GDP, which is another complicated and potentially very dangerous mistake for what should be fairly obvious reasons. Or the recently popular notion that humanity's highest priority and morally imperative goal should be to normalize GDP and standard of living across all members of humanity on the planet. Different cultures optimize for different things, some things require more work to achieve, but that often means less time for family and leisure. That said, I'm also strongly opposed to certain countries messing things up for entire regions of the world for decades on end with no end in sight. Life is a hell of a lot more complicated than you'd think it is, if all you had to go on was most people's personal perception of it.

jayd16 8y ago

This can also hurt US production. This makes US goods more expensive, not only for Americans but for everyone. Now US goods look even worse to any would be importer. Maybe this policy forces Americans to buy American but unless we make up every lost export with a domestic purchase it only hurts. And this is before we even consider retaliatory tariffs.

s73v3r_ 8y ago

Well, in the case of these specific tariffs that the US is imposing, they're on components of things, not on finished goods. So it's actually going to be cheaper to manufacture the entire thing in China, rather than import the components and assemble in the US.