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> It's hard to argue that tariffs on goods from China don't make it less attractive to buy goods from China. It's true that tariffs will make buying goods from

by jfim 6y ago

> It's hard to argue that tariffs on goods from China don't make it less attractive to buy goods from China. It's true that tariffs will make buying goods from China less appealing, but if you look at the outcome, it's not really a win. Consumers are paying more for the same goods, companies are scrambling to move their production to India and Malaysia, and there's not a significant increase in US manufacturing. A properly executed initiative to increase US-based manufacturing would address all of the factors necessary to restart manufacturing: - Not only tax cuts, but subsidies and investment aimed at increasing manufacturing in specific industries - A concerted program to identify labor and skills shortages, and address them - A program to identify the missing parts of manufacturing ecosystems and address them. One reason why electronics are made in China is not only cheap labor, but access to a whole ecosystem of suppliers and other manufacturers. Need one million PCBs assembled, plastic casings made, half a million cardboard boxes printed, instruction manuals printed and bound, well, there's a whole ecosystem of partners ready to get all of these things done with the capacity to have a relatively short turnaround time. - A clear bipartisan commitment that this is something that won't get deprioritized or axed one or two administrations later, but something that is of national interest and that both parties agree to push forward - A national focus on a key differentiator from other countries' manufacturing. China has cheap, Japan, Switzerland, and Germany have good, the US has big and sturdy maybe? - Tariffs to protect newly formed manufacturing businesses, but only in conjunction with all of the above This is what a solid plan for restarting US manufacturing would look like.

AnthonyMouse 6y ago
> It's true that tariffs will make buying goods from China less appealing, but if you look at the outcome, it's not really a win. Consumers are paying more for the same goods, companies are scrambling to move their production to India and Malaysia, and there's not a significant increase in US manufacturing. If you look at the actual outcome, it was that China devalued their currency or otherwise lowered prices to eat the tariffs, because their nightmare is manufacturing getting a foothold anywhere else, whether it's India or the US. Which is a win for the US because we have China paying us billions of dollars in tariffs without paying significantly higher prices for goods. That doesn't help US manufacturing directly, but it gives the US a lot of leverage in trade negotiations because now China wants that situation to stop happening. And in the meantime the money can be used for tax cuts or subsidies to US businesses. We could also just raise the tariffs more, for as long as China decides they want to keep paying them instead of letting them push manufacturing out of China. > Not only tax cuts, but subsidies and investment aimed at increasing manufacturing in specific industries Tax cuts and subsidies are equivalent. And it's not clear why targeting specific industries is useful rather than giving the same incentives across all industries. > A concerted program to identify labor and skills shortages, and address them Address them how? With more subsidies, which is really just equivalent to tax cuts again? This is the sort of thing markets are better at than governments. > A program to identify the missing parts of manufacturing ecosystems and address them. One reason why electronics are made in China is not only cheap labor, but access to a whole ecosystem of suppliers and other manufacturers. Need one million PCBs assembled, plastic casings made, half a million cardboard boxes printed, instruction manuals printed and bound, well, there's a whole ecosystem of partners ready to get all of these things done with the capacity to have a relatively short turnaround time. This is certainly a problem, but it seems to imply the opposite of your other proposed solutions. You would then not want to target specific segments but rather have broad incentives to engage in all different kinds of business activity, i.e. general tax cuts. > A clear bipartisan commitment that this is something that won't get deprioritized or axed one or two administrations later, but something that is of national interest and that both parties agree to push forward This seems like something you need Democrats to do rather than something you need Trump to do. > A national focus on a key differentiator from other countries' manufacturing. China has cheap, Japan, Switzerland, and Germany have good, the US has big and sturdy maybe? What does this even mean? Countries don't need to differentiate like this. How is it even differentiation when three of the four countries you listed are using the same one?
- jfim 6y ago
  > Tax cuts and subsidies are equivalent. They're not. One can't cut taxes below zero, for starters. Some industries need more than just having negligible taxes to get started, especially in capital intensive businesses. Furthermore, the idea that the only lever that the government has to induce people to do things is lowering taxes is completely absurd. Tax cuts didn't build the Hoover dam, the interstate highway system, nor send a man to the Moon. The government can use targeted investments, messaging, procurement, tax cuts, and so on in order to move people towards certain outcomes. The day that the US government announces that they'll buy 100 million masks a month for a strategic reserve or replace all of the mobile devices for all federal employees, as long as they're at at most a 50% premium over the cheapest option and are fully traceable from raw materials to finished product as being fully built in the US and allied countries, is the day that people will start investigating if it's possible to do so, and start trying to do so if it's possible. > This seems like something you need Democrats to do rather than something you need Trump to do. It takes two to tango. Many other countries are able to pass laws and make progress, even in complex multiparty negotiations during minority governments.
  - AnthonyMouse 6y ago
    > They're not. One can't cut taxes below zero, for starters. You might want to check with the IRS, since that's exactly what the EITC does. It's also the de facto result when a company takes a tax loss (e.g. from deducting more expenses than it had in revenue, common for startups) and can then sell the tax loss to another company to offset its tax burden. > Tax cuts didn't build the Hoover dam, the interstate highway system, nor send a man to the Moon. As opposed to Tesla's plant at Niagara Falls, or the various privately-owned rail networks in the world, or SpaceX? > The day that the US government announces that they'll buy 100 million masks a month for a strategic reserve or replace all of the mobile devices for all federal employees, as long as they're at at most a 50% premium over the cheapest option and are fully traceable from raw materials to finished product as being fully built in the US and allied countries, is the day that people will start investigating if it's possible to do so, and start trying to do so if it's possible. But that's actually more expensive, and less productive, than just making it more cost effective to manufacture things domestically than somewhere else, because domestic production has low taxes and efficient regulations and production in countries that engage in currency manipulation or have inadequate environmental protections are subject to tariffs. > It takes two to tango. That's the problem. It doesn't matter how willing one side is to negotiate if Democrats are too busy fabricating lies about Russia collusion to come to the table. Compromise requires both sides to be reasonable.

by jfim 6y ago

AnthonyMouse 6y ago

> It's true that tariffs will make buying goods from China less appealing, but if you look at the outcome, it's not really a win. Consumers are paying more for the same goods, companies are scrambling to move their production to India and Malaysia, and there's not a significant increase in US manufacturing. If you look at the actual outcome, it was that China devalued their currency or otherwise lowered prices to eat the tariffs, because their nightmare is manufacturing getting a foothold anywhere else, whether it's India or the US. Which is a win for the US because we have China paying us billions of dollars in tariffs without paying significantly higher prices for goods. That doesn't help US manufacturing directly, but it gives the US a lot of leverage in trade negotiations because now China wants that situation to stop happening. And in the meantime the money can be used for tax cuts or subsidies to US businesses. We could also just raise the tariffs more, for as long as China decides they want to keep paying them instead of letting them push manufacturing out of China. > Not only tax cuts, but subsidies and investment aimed at increasing manufacturing in specific industries Tax cuts and subsidies are equivalent. And it's not clear why targeting specific industries is useful rather than giving the same incentives across all industries. > A concerted program to identify labor and skills shortages, and address them Address them how? With more subsidies, which is really just equivalent to tax cuts again? This is the sort of thing markets are better at than governments. > A program to identify the missing parts of manufacturing ecosystems and address them. One reason why electronics are made in China is not only cheap labor, but access to a whole ecosystem of suppliers and other manufacturers. Need one million PCBs assembled, plastic casings made, half a million cardboard boxes printed, instruction manuals printed and bound, well, there's a whole ecosystem of partners ready to get all of these things done with the capacity to have a relatively short turnaround time. This is certainly a problem, but it seems to imply the opposite of your other proposed solutions. You would then not want to target specific segments but rather have broad incentives to engage in all different kinds of business activity, i.e. general tax cuts. > A clear bipartisan commitment that this is something that won't get deprioritized or axed one or two administrations later, but something that is of national interest and that both parties agree to push forward This seems like something you need Democrats to do rather than something you need Trump to do. > A national focus on a key differentiator from other countries' manufacturing. China has cheap, Japan, Switzerland, and Germany have good, the US has big and sturdy maybe? What does this even mean? Countries don't need to differentiate like this. How is it even differentiation when three of the four countries you listed are using the same one?

jfim 6y ago
> Tax cuts and subsidies are equivalent. They're not. One can't cut taxes below zero, for starters. Some industries need more than just having negligible taxes to get started, especially in capital intensive businesses. Furthermore, the idea that the only lever that the government has to induce people to do things is lowering taxes is completely absurd. Tax cuts didn't build the Hoover dam, the interstate highway system, nor send a man to the Moon. The government can use targeted investments, messaging, procurement, tax cuts, and so on in order to move people towards certain outcomes. The day that the US government announces that they'll buy 100 million masks a month for a strategic reserve or replace all of the mobile devices for all federal employees, as long as they're at at most a 50% premium over the cheapest option and are fully traceable from raw materials to finished product as being fully built in the US and allied countries, is the day that people will start investigating if it's possible to do so, and start trying to do so if it's possible. > This seems like something you need Democrats to do rather than something you need Trump to do. It takes two to tango. Many other countries are able to pass laws and make progress, even in complex multiparty negotiations during minority governments.
- AnthonyMouse 6y ago
  > They're not. One can't cut taxes below zero, for starters. You might want to check with the IRS, since that's exactly what the EITC does. It's also the de facto result when a company takes a tax loss (e.g. from deducting more expenses than it had in revenue, common for startups) and can then sell the tax loss to another company to offset its tax burden. > Tax cuts didn't build the Hoover dam, the interstate highway system, nor send a man to the Moon. As opposed to Tesla's plant at Niagara Falls, or the various privately-owned rail networks in the world, or SpaceX? > The day that the US government announces that they'll buy 100 million masks a month for a strategic reserve or replace all of the mobile devices for all federal employees, as long as they're at at most a 50% premium over the cheapest option and are fully traceable from raw materials to finished product as being fully built in the US and allied countries, is the day that people will start investigating if it's possible to do so, and start trying to do so if it's possible. But that's actually more expensive, and less productive, than just making it more cost effective to manufacture things domestically than somewhere else, because domestic production has low taxes and efficient regulations and production in countries that engage in currency manipulation or have inadequate environmental protections are subject to tariffs. > It takes two to tango. That's the problem. It doesn't matter how willing one side is to negotiate if Democrats are too busy fabricating lies about Russia collusion to come to the table. Compromise requires both sides to be reasonable.