4 ms·

Let’s assume tariffs are used as a means to bring manufacturing to the US. By that definition the administration has no idea what level of tariffs will make thi

Let’s assume tariffs are used as a means to bring manufacturing to the US. By that definition the administration has no idea what level of tariffs will make this happen. Setting up manufacturing in the US for any item is not cheap - we don’t have the know how, labor to do it to begin with. On top of that the cost of manufacturing is many fold compared to china, India, Bangladesh or Taiwan. So 25% or 10% is still not in anyway going to force manufacture to come back. Tariffs have to be at an insane level to justify bringing manufacturing back. My worry is that the administration is may be prepared to go there. That will cause a deep deep recession across the whole globe. Even then it will take a couple of decades to have meaningful manufacturing in the US

CaliforniaKarl 2y ago
> we don’t have the know how, labor to do it to begin with. That, I believe, is one of the reasons why the H-series and E-series exist in the United States, along with the L visa. It gives you the opportunity to bring foreigners into the United States, either for a limited (but finitely-extendable) period of time, or permanently. You can argue that the current forms of those visas do not work, but that is not my point: My point is that the above reason is why the visas exist. To bring my point back around to tariffs: I think making the above-mentioned visas harder to get goes against the purpose of the tariffs. If you want manufacturing etc. brought back here, then make it easy (or easier) to get the knowledgeable folks who you need to train the folks who will do the manufacturing here.
- thephyber 2y ago
  Half of the administration primarily wants to onshore all the things. The other half wants to primarily kick out foreigners to reduce competition with domestic workers. They don’t have a plan, only hopes.
  - CamperBob2 2y ago
    They don't have hopes either, only impulses. Pure id.
- yalogin 2y ago
  This administration has no logic, that much is established. They are driven by two different philosophies - a burn it all down and build again and another stop all immigration now. Both these philosophies are both unified by racism/dictatorship tendencies
jfim 2y ago
I believe the idea is to replace the internal revenue service (income taxes) by the external revenue service (tariffs). The tariffs are kind of a hidden sales tax, with the hidden drawback of making cross border manufacturing pretty painful. The auto industry is especially impacted by this, with parts crossing the US/Can/Mx borders pretty frequently. I doubt this scheme would work, but from what I understand the rich typically prefer sale taxes to wealth/income taxes since they only consume a small fraction of their net worth in goods, preferring to invest (which wouldn't be taxed). They're also not regressive, meaning that poorer people would end up paying a larger portion of their income in taxes.
- deleted 2y ago
  [deleted]
gnuloonix 2y ago
[flagged]
ra 2y ago
> Let’s assume tariffs are used as a means to bring manufacturing to the US. I don't think it's that altruistic. This is simply a way to defend or fund income tax cuts. If you look at the federal gov P&L according to DOGE (https://doge.gov/spend https://doge.gov/spend); excise and customs taxes are the best opportunity to drive revenue if you won't raise income tax.
- kersplody 2y ago
  There is also a plan afoot to replace income taxes with tariffs following the McKinley Economic model, involving high tariffs, gold standard, focus on industrialism, and economic imperialism. It kinda made sense in the days where there was a manufacturing base to protect and one could plunder 3rd world economies, but those horses have long left the barn. Also this plan is moronic when you look at the cash flows if implemented today.
  - chrishare 2y ago
    It's also very regressive, at least in isolation. Income tax rates are progressive, but lower income families spend more of their total income on goods so tariff will hurt them more proportionally.
    - Spivak 2y ago
      It does seem like that is The Point.
    - Auracle 2y ago
      I’d think that low income people would spend a larger proportion of their money on stuff made primarily in the US - food being the biggest thing. Clothing aside, most things that we get internationally are wants, not needs…and clothing itself can become that once you have enough.
      - Majromax 2y ago
        > I’d think that low income people would spend a larger proportion of their money on stuff made primarily in the US The distributional effects are still bad for consumers, even purchasing made-in-America goods. The domestic good will still be higher-cost than the pre-tariff foreign good, so low-income consumers will be worse off than the status quo. If the tariffs are set at a moderate level (i.e. not so high as to make imports effectively impossible), basic supply and demand suggests that the sticker price of American goods should equal the post-tariff price of imported goods. That's essentially what consumers saw with tariffs on appliances in Trump's first term. Protective tariffs could still arguably make sense in a demand-constrained economy where there was a lot of unemployment to go around: individual consumers would be worse off but more people would be employed. However, breathless media aside this conflicts with basic statistics that show the prime-age employment[†] rate (https://fred.stlouisfed.org/graph/?g=1DUXA https://fred.stlouisfed.org/graph/?g=1DUXA) near cyclical peak levels, currently above the pre-financial-crisis level. Tariffs are a lousy solution for the more common complaint that stuff is just too expensive. [†] — I use the prime age employment rate to avoid problems with "discouraged workers" or disability being excluded from unemployment and to correct for basic demographic shifts. If fewer people are employed because more people are retired, that's an entirely different problem.
doctaj 2y ago
No one is going to spend millions to billions of dollars on manufacturing facilities in the current political situation (read: unstable, risky, constantly changing).
- Aperocky 2y ago
  That's the bingo card. The economy runs on expectations. I've been thinking about the recent layoffs impacting government. If 1% of the workforce is laid off at once for no good reason, are the impact restricted to 1% of economy? I'd assume no, because 90% of the other people would start saving just in case. To not have that situation, you would need to be convincing that the impact are only restricted to the people that are laid off, but that isn't happening because they weren't laid off with an convincing cause. So now everyone is cowering because this suddenly looks like something that could happen to them.
- Animats 2y ago
  That's the real problem. We've seen this happen in the rare earths industry over and over since about 1990, with wild swings in prices and profits. When demand and supply have a lot of inertia, minor changes in either cause big change in prices. A US startup is preparing to mine titanium in Tennessee. Three US startups in different states want to start up rare earth mines. They all need some assurance of not being drastically undercut on price, or some way to hedge that. If we're going to have protective tariffs, they should be at the consumer product end, not the raw materials end. Smartphones, not steel.
RecycledEle 2y ago
> Let’s assume tariffs are used as a means to bring manufacturing to the US. By that definition the administration has no idea what level of tariffs will make this happen. Setting up manufacturing in the US for any item is not cheap - we don’t have the know how, labor to do it to begin with. On top of that the cost of manufacturing is many fold compared to china, India, Bangladesh or Taiwan. So 25% or 10% is still not in anyway going to force manufacture to come back. I don't think there will be many startups reinventing products from scratch and building factories in the US. I think multi-nationals will move a small factory to the US to avoid tarrifs. That makes the US more resilient when some idiot leads us into another war. 25% is plenty to give a US location a comparative advanatage.

CaliforniaKarl 2y ago

> we don’t have the know how, labor to do it to begin with. That, I believe, is one of the reasons why the H-series and E-series exist in the United States, along with the L visa. It gives you the opportunity to bring foreigners into the United States, either for a limited (but finitely-extendable) period of time, or permanently. You can argue that the current forms of those visas do not work, but that is not my point: My point is that the above reason is why the visas exist. To bring my point back around to tariffs: I think making the above-mentioned visas harder to get goes against the purpose of the tariffs. If you want manufacturing etc. brought back here, then make it easy (or easier) to get the knowledgeable folks who you need to train the folks who will do the manufacturing here.

thephyber 2y ago
Half of the administration primarily wants to onshore all the things. The other half wants to primarily kick out foreigners to reduce competition with domestic workers. They don’t have a plan, only hopes.
- CamperBob2 2y ago
  They don't have hopes either, only impulses. Pure id.
yalogin 2y ago
This administration has no logic, that much is established. They are driven by two different philosophies - a burn it all down and build again and another stop all immigration now. Both these philosophies are both unified by racism/dictatorship tendencies

jfim 2y ago

I believe the idea is to replace the internal revenue service (income taxes) by the external revenue service (tariffs). The tariffs are kind of a hidden sales tax, with the hidden drawback of making cross border manufacturing pretty painful. The auto industry is especially impacted by this, with parts crossing the US/Can/Mx borders pretty frequently. I doubt this scheme would work, but from what I understand the rich typically prefer sale taxes to wealth/income taxes since they only consume a small fraction of their net worth in goods, preferring to invest (which wouldn't be taxed). They're also not regressive, meaning that poorer people would end up paying a larger portion of their income in taxes.

deleted 2y ago
[deleted]

gnuloonix 2y ago

[flagged]

ra 2y ago

> Let’s assume tariffs are used as a means to bring manufacturing to the US. I don't think it's that altruistic. This is simply a way to defend or fund income tax cuts. If you look at the federal gov P&L according to DOGE (https://doge.gov/spend https://doge.gov/spend); excise and customs taxes are the best opportunity to drive revenue if you won't raise income tax.

kersplody 2y ago
There is also a plan afoot to replace income taxes with tariffs following the McKinley Economic model, involving high tariffs, gold standard, focus on industrialism, and economic imperialism. It kinda made sense in the days where there was a manufacturing base to protect and one could plunder 3rd world economies, but those horses have long left the barn. Also this plan is moronic when you look at the cash flows if implemented today.
- chrishare 2y ago
  It's also very regressive, at least in isolation. Income tax rates are progressive, but lower income families spend more of their total income on goods so tariff will hurt them more proportionally.
  - Spivak 2y ago
    It does seem like that is The Point.
  - Auracle 2y ago
    I’d think that low income people would spend a larger proportion of their money on stuff made primarily in the US - food being the biggest thing. Clothing aside, most things that we get internationally are wants, not needs…and clothing itself can become that once you have enough.
    - Majromax 2y ago
      > I’d think that low income people would spend a larger proportion of their money on stuff made primarily in the US The distributional effects are still bad for consumers, even purchasing made-in-America goods. The domestic good will still be higher-cost than the pre-tariff foreign good, so low-income consumers will be worse off than the status quo. If the tariffs are set at a moderate level (i.e. not so high as to make imports effectively impossible), basic supply and demand suggests that the sticker price of American goods should equal the post-tariff price of imported goods. That's essentially what consumers saw with tariffs on appliances in Trump's first term. Protective tariffs could still arguably make sense in a demand-constrained economy where there was a lot of unemployment to go around: individual consumers would be worse off but more people would be employed. However, breathless media aside this conflicts with basic statistics that show the prime-age employment[†] rate (https://fred.stlouisfed.org/graph/?g=1DUXA https://fred.stlouisfed.org/graph/?g=1DUXA) near cyclical peak levels, currently above the pre-financial-crisis level. Tariffs are a lousy solution for the more common complaint that stuff is just too expensive. [†] — I use the prime age employment rate to avoid problems with "discouraged workers" or disability being excluded from unemployment and to correct for basic demographic shifts. If fewer people are employed because more people are retired, that's an entirely different problem.

doctaj 2y ago

No one is going to spend millions to billions of dollars on manufacturing facilities in the current political situation (read: unstable, risky, constantly changing).

Aperocky 2y ago
That's the bingo card. The economy runs on expectations. I've been thinking about the recent layoffs impacting government. If 1% of the workforce is laid off at once for no good reason, are the impact restricted to 1% of economy? I'd assume no, because 90% of the other people would start saving just in case. To not have that situation, you would need to be convincing that the impact are only restricted to the people that are laid off, but that isn't happening because they weren't laid off with an convincing cause. So now everyone is cowering because this suddenly looks like something that could happen to them.
Animats 2y ago
That's the real problem. We've seen this happen in the rare earths industry over and over since about 1990, with wild swings in prices and profits. When demand and supply have a lot of inertia, minor changes in either cause big change in prices. A US startup is preparing to mine titanium in Tennessee. Three US startups in different states want to start up rare earth mines. They all need some assurance of not being drastically undercut on price, or some way to hedge that. If we're going to have protective tariffs, they should be at the consumer product end, not the raw materials end. Smartphones, not steel.

RecycledEle 2y ago

> Let’s assume tariffs are used as a means to bring manufacturing to the US. By that definition the administration has no idea what level of tariffs will make this happen. Setting up manufacturing in the US for any item is not cheap - we don’t have the know how, labor to do it to begin with. On top of that the cost of manufacturing is many fold compared to china, India, Bangladesh or Taiwan. So 25% or 10% is still not in anyway going to force manufacture to come back. I don't think there will be many startups reinventing products from scratch and building factories in the US. I think multi-nationals will move a small factory to the US to avoid tarrifs. That makes the US more resilient when some idiot leads us into another war. 25% is plenty to give a US location a comparative advanatage.