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So you're saying that in order to produce cars at a price point that will actually sell, manufacturers are going to be forced to start doing more of their produ

by bhaney 2y ago

So you're saying that in order to produce cars at a price point that will actually sell, manufacturers are going to be forced to start doing more of their production domestically? Oh no!

maxerickson 2y ago
Or they will just charge more. A US company that buys metal castings from Canada and sells finished parts back to a factory in Canada might decide to look for a new source, but it's not a given that they will find one, or that switching would make more sense than losing business to higher prices.
- idrathernot 2y ago
  As a buyer of low volume metal castings from both domestic and foreign foundries that my company finishes and sells to the energy industry in the US, our customers often tout that they’ll pay any mark-up for a domestic casting. We then have to explain to them that regardless of their willingness to pay up, there are literally no domestic companies that are willing to produce this stuff, let alone at a reasonable price. To give more detail, one casting is a low precision structural attachment that connects an heavy anchor chain to a floating buoy. This part is cast from 316 grade stainless steel in China for ~$50/ea. For GSA work in the US, we have to use the same part cast domestically from A897 Ductile Iron (a far inferior material in a marine environment) because none of the few remaining US foundries who do stainless are willing to take on the work. Unless the government is going to take the tariff revenue, and immediately incentivize more domestic competition and investment in manufacturing infrastructure (dirty industries frowned upon by VC tech bros who have no idea where any of the physical items they rely on to survive come from) at a level greater than FDR’s New Deal, then the result is simply going to be extreme inflation and massive scarcity. I’d love to just start a foundry making our stainless castings right here in the USA, but anyone with the time for that doesn’t have access to the funding and anyone with the funding doesn’t have the time for the lengthy payback period of building a factory. Industrial prowess in a America is basically far too gone to catch up at this point and even the high value and cutting-edge R&D stuff will fall off as we don’t have all of the legacy “heavy industrial” know how that unlocks the latter part of the value chain.
  - qazxcvbnmlp 2y ago
    Yup. We are starting to fall down the slippery slope of not even knowing how to produce goods, not even considering cost.
  - lotsofpulp 2y ago
    > dirty industries frowned upon by VC tech bros who have no idea where any of the physical items they rely on to survive come from) Everyone knows where it comes from, it just doesn’t make business sense to plow money into high liability, low economies of scale businesses when your competition has far lower labor and environmental compliance costs.
dmz73 2y ago
They always had that option but somehow it was cheaper to ship there and back than to manufacture in US. So either you get 2x the tariff increase in price or you manufacture locally for something that increases the price by more than 2x shipping. Oh no, indeed.
- idrathernot 2y ago
  It’s not that it’s cheaper overseas, rather it’s often not available domestically at any price. People don’t realize just how absolutely gutted America’s commodity/heavy industrial production capacity really is and the whole system makes it nearly impossible to rebuild.
ASinclair 2y ago
How will they be cheaper if a significant portion of the components and raw materials are tariffed to a larger degree?
graeme 2y ago
They're more likely to shut down the plants. The cross border system has been in place for decades. It is unclear if the tariffs are a short term or long term policy. If short term then there's no way to justify the investment. So you have to wait until you get certainty. And then you need to build industrial plant, train workers. And crucially the new workers have to stop whatever work they were doing previously.
- bitmasher9 2y ago
  If tariffs are long term it seems likely more of the manufacturing process will occur in the US, so long as sufficient raw materials can be sourced inside the US. If a foreign country has cheaper raw materials and cheaper manufacturing costs, maybe they will export manufactured parts. Of course, in the short term this is full panic mode, with the real potential for some manufacturing to be removed in US or retooled to meet new requirements.
deleted 2y ago
[deleted]
jeromegv 2y ago
Canada buys more cars made in the US than actual cars are made in canada Lets say canada make 1 million car a year, that’s still less than what Canadians are buying. Some Americans seems to think that all that matter is domestic production when they forget that their own companies need to export as well. Canadians do buy cars as well. This isn’t a case where all domestic production was lost from the US.

by bhaney 2y ago

So you're saying that in order to produce cars at a price point that will actually sell, manufacturers are going to be forced to start doing more of their production domestically? Oh no!

maxerickson 2y ago

Or they will just charge more. A US company that buys metal castings from Canada and sells finished parts back to a factory in Canada might decide to look for a new source, but it's not a given that they will find one, or that switching would make more sense than losing business to higher prices.

idrathernot 2y ago
As a buyer of low volume metal castings from both domestic and foreign foundries that my company finishes and sells to the energy industry in the US, our customers often tout that they’ll pay any mark-up for a domestic casting. We then have to explain to them that regardless of their willingness to pay up, there are literally no domestic companies that are willing to produce this stuff, let alone at a reasonable price. To give more detail, one casting is a low precision structural attachment that connects an heavy anchor chain to a floating buoy. This part is cast from 316 grade stainless steel in China for ~$50/ea. For GSA work in the US, we have to use the same part cast domestically from A897 Ductile Iron (a far inferior material in a marine environment) because none of the few remaining US foundries who do stainless are willing to take on the work. Unless the government is going to take the tariff revenue, and immediately incentivize more domestic competition and investment in manufacturing infrastructure (dirty industries frowned upon by VC tech bros who have no idea where any of the physical items they rely on to survive come from) at a level greater than FDR’s New Deal, then the result is simply going to be extreme inflation and massive scarcity. I’d love to just start a foundry making our stainless castings right here in the USA, but anyone with the time for that doesn’t have access to the funding and anyone with the funding doesn’t have the time for the lengthy payback period of building a factory. Industrial prowess in a America is basically far too gone to catch up at this point and even the high value and cutting-edge R&D stuff will fall off as we don’t have all of the legacy “heavy industrial” know how that unlocks the latter part of the value chain.
- qazxcvbnmlp 2y ago
  Yup. We are starting to fall down the slippery slope of not even knowing how to produce goods, not even considering cost.
- lotsofpulp 2y ago
  > dirty industries frowned upon by VC tech bros who have no idea where any of the physical items they rely on to survive come from) Everyone knows where it comes from, it just doesn’t make business sense to plow money into high liability, low economies of scale businesses when your competition has far lower labor and environmental compliance costs.

dmz73 2y ago

They always had that option but somehow it was cheaper to ship there and back than to manufacture in US. So either you get 2x the tariff increase in price or you manufacture locally for something that increases the price by more than 2x shipping. Oh no, indeed.

idrathernot 2y ago
It’s not that it’s cheaper overseas, rather it’s often not available domestically at any price. People don’t realize just how absolutely gutted America’s commodity/heavy industrial production capacity really is and the whole system makes it nearly impossible to rebuild.

ASinclair 2y ago

How will they be cheaper if a significant portion of the components and raw materials are tariffed to a larger degree?

graeme 2y ago

They're more likely to shut down the plants. The cross border system has been in place for decades. It is unclear if the tariffs are a short term or long term policy. If short term then there's no way to justify the investment. So you have to wait until you get certainty. And then you need to build industrial plant, train workers. And crucially the new workers have to stop whatever work they were doing previously.

bitmasher9 2y ago
If tariffs are long term it seems likely more of the manufacturing process will occur in the US, so long as sufficient raw materials can be sourced inside the US. If a foreign country has cheaper raw materials and cheaper manufacturing costs, maybe they will export manufactured parts. Of course, in the short term this is full panic mode, with the real potential for some manufacturing to be removed in US or retooled to meet new requirements.

deleted 2y ago

[deleted]

jeromegv 2y ago

Canada buys more cars made in the US than actual cars are made in canada Lets say canada make 1 million car a year, that’s still less than what Canadians are buying. Some Americans seems to think that all that matter is domestic production when they forget that their own companies need to export as well. Canadians do buy cars as well. This isn’t a case where all domestic production was lost from the US.