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Counterpoints to the article: > Some of the most compelling jobs to bring back to the US are the so-called “last screw” system integration operations. Somewha
by sumeonenew 8y ago
Counterpoints to the article:
> Some of the most compelling jobs to bring back to the US are the so-called “last screw” system integration operations.
Somewhat. The system integration operations are tedious and human-labor intensive. Those operations could still move to other cheaper labored countries such as Vietnam, India, etc. And if the operations can be automated, these operations will be reshored. The point of the tariffs exercise is to encourage manufacturing to move out of China and into other countries or reshored, to punish China for stealing IP and unfair business practices.
> I’ve examined the tariff lists (List 1 and List 2), and it taxes the import of basic components, tools and sub-assemblies, while giving fully assembled goods a free pass.
Trump just announced he is starting an additional $200 billion tariff on Chinese goods. That will definitely cover some fully assembled goods since the trade deficit is only around $330 billion, and there is already tariffs on $50 billion https://www.washingtonpost.com/business/economy/trump-escalates-china-trade-war-announces-plan-for-tariffs-on-200-billion-in-products/2018/06/18/ac683f80-7355-11e8-b4b7-308400242c2e_story.html https://www.washingtonpost.com/business/economy/trump-escala...
> While stiff tariffs on the import of microchips drove investment in local chip companies, trade barriers meant the local companies didn’t have to be as competitive.
True in some ways. However, there will always be competition pressures and anti-monopoly pressures. It really depends on the shape of the market. And in technology, there are always the threat of obsolete/disruptive innovations to keep companies on their toes.
> New Tariffs Hurt Educators and Makers
If educators and makers really wanted cheap standalone components to play with, and there is a market, there will be a market sooner or later born in US for them. the $250 billion tariffs (and any subsequent ones) will make sure of that. If manufacturing can be reshored to China in 15 years, it can be reshored back to US in less time than that, with US economy booming 4% this quarter, massive capital inflow, and robotics technology growing.
- king_phil 8y agoI don't see how there is going to be a market built (we are talking about a five or ten year timespan here to build a semiconductor factory) around a trade barrier created by a tariff where nobody knows how long it will be in effect. Would you bet dozens of millions of dollars to create a production of already existing, cheaper produced products to supply a market created by tariffs? How easy would it for the next administration (or the current) to drop these tariffs? What about your investment then? Which sane person would make such an investment?