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Higher tariffs won't do it alone. Time is needed, as well. The current tariffs are likely seen as temporary. If you start a factory to produce on shore, you wo
by NAHWheatCracker 2y ago
Higher tariffs won't do it alone. Time is needed, as well. The current tariffs are likely seen as temporary.
If you start a factory to produce on shore, you would have to recoup capital costs off the margin available due to undercutting offshore factories while tariffs are higher.
When the administration or whims change, the tariffs go away and your factory loses that margin and isn't as profitable.
- 3D30497420 2y agoAnd probably government support too? I'd wager a lot of the initial manufacturing capacity in China was jump-started by some amount of government support (cheap loans, tax incentives, etc.).
- sangnoir 2y agoTrump is on record deriding the CHIPS act, which does exactly that.
- 3D30497420 2y agoYes, which is of course contributes to the irony: They are not doing the things which actually might help. Which, of course, suggests either they are stupid or not taking these actions for the reasons they're saying. I'm wagering both.