5 ms·

How do tariffs fit into the stated goal of “increasing supply?”

by SlightlyLeftPad 2y ago

yieldcrv 2y ago
Entrepreneurs are supposed to offer domestic versions at their own risk
- SlightlyLeftPad 2y ago
  With how quickly the tariffs are added and removed, if I were an entrepreneur I’d find it difficult to lean in on a risky investment that may be undermined or undercut by the eventual and sudden removal of tariffs. I’m curious how this plays out in reality.
  - yieldcrv 2y ago
    so far, Apple says they'll invest $500bn to bring their supply chain stateside, Softbank $100bn-$200bn, "Stargate" Group is supposed to be $65bn and that was just to curry favor as well as get in front of the tariff plans we'll see if they follow through, but those count as American entrepreneurs too if there are disruptions on smaller scales, some people will take the risk, and there will be winners and losers as with everything else.
    - SlightlyLeftPad 2y ago
      It’s definitely interesting. I’m starting to think of the potential upside there and it’s going to be a relatively long road to move all that back here. There’s an issue of raw materials supply as well and I’m curious if this is more of an “assembled in USA” type of thing or the whole chain will move. Time will tell.
    - intended 2y ago
      Tariffs don’t achieve this, and it misdiagnoses the problem in the first place. Manufacturing is now increasingly automated, so it doesn’t employ as many people anymore. This is an issue India faces as does every developing economy. Economic growth is increasingly dependent on service sector growth. Moving supply chains also requires weaker labor laws, and lower salaries for workers, than minimum wage, to be competitive. OSHA is a problem for factory owners, because it increases costs with the tradeoff of higher worker safety. In contrast, there are suicide nets around factories in China. The American populace doesn’t want to work jobs at lower wages. The price for competitive goods requires firms to be cheap. You are going to be subsidizing people to work in factories, for decades, if not a full century. All the while people will take aim at the subsidy, and then blame minimum wages and people who support labor laws. Ad infinitum.
      - yieldcrv 2y ago
        America has many American workers at minimum wage and above. (and below) In this specific sector, the entire industry including retail has shown they will pay many multiples of a higher price for GPUs and cloud services. So if a US grown supply already cost that much out the gate, there is already examples of the market being able to bare that.
        intended 2y ago
        I get your point - but when I see what you are saying, the focus is on the demand side and price elasticity. There is definitely an unserved market. Even now, there’s many people who want to purchase the service and can’t afford to. However, even if we concede your point in its strongest sense - the revenue is a different beast from the profit margins. Higher labor and compliance costs mean that making things in america is more expensive. The solution is usually to not pay people that much In the end a company is measured by its stock performance. Their incentive is to maximize profit. If the solution is to pay people less, most voters balk.
        SlightlyLeftPad 2y ago
        Exactly, rather than evolve our economy and support high paying jobs which often require high education, the strategy seems to be revert to past things that made our economy successful and neglect the education system. Why? I think it’s because it guarantees votes and is an easy movement to get behind but it’s not /better/. I don’t think it will actually work either because you have to compete with your aforementioned labor costs which isn’t sustainable.
        intended 2y ago
        Right! I say take it a step further - not everyone is excited by sitting in front of a computer and doing intellectual exercises. People like different things and are suited to doing different things as well. But if there is only one way forward, which is Engineering, Medicine and Law - then you have essentially recreated 1970s India and China. But this is 2025 - not only do we have automation we have GenAI, which threatens to take away tons of low level service work. Education is something that takes years to result in blooms. Decades of nurturing. (Hey - thats a useful analogy. Societies plant and harvest crops of trained professionals.) Can people discuss these difficult topics? Nope. Besides, if you do - people start becoming more “liberal”, “disconnected” from ground reality. Code for people not voting the way leadership would like.

How do tariffs fit into the stated goal of “increasing supply?”

yieldcrv 2y ago

Entrepreneurs are supposed to offer domestic versions at their own risk

SlightlyLeftPad 2y ago
With how quickly the tariffs are added and removed, if I were an entrepreneur I’d find it difficult to lean in on a risky investment that may be undermined or undercut by the eventual and sudden removal of tariffs. I’m curious how this plays out in reality.
- yieldcrv 2y ago
  so far, Apple says they'll invest $500bn to bring their supply chain stateside, Softbank $100bn-$200bn, "Stargate" Group is supposed to be $65bn and that was just to curry favor as well as get in front of the tariff plans we'll see if they follow through, but those count as American entrepreneurs too if there are disruptions on smaller scales, some people will take the risk, and there will be winners and losers as with everything else.
  - SlightlyLeftPad 2y ago
    It’s definitely interesting. I’m starting to think of the potential upside there and it’s going to be a relatively long road to move all that back here. There’s an issue of raw materials supply as well and I’m curious if this is more of an “assembled in USA” type of thing or the whole chain will move. Time will tell.
  - intended 2y ago
    Tariffs don’t achieve this, and it misdiagnoses the problem in the first place. Manufacturing is now increasingly automated, so it doesn’t employ as many people anymore. This is an issue India faces as does every developing economy. Economic growth is increasingly dependent on service sector growth. Moving supply chains also requires weaker labor laws, and lower salaries for workers, than minimum wage, to be competitive. OSHA is a problem for factory owners, because it increases costs with the tradeoff of higher worker safety. In contrast, there are suicide nets around factories in China. The American populace doesn’t want to work jobs at lower wages. The price for competitive goods requires firms to be cheap. You are going to be subsidizing people to work in factories, for decades, if not a full century. All the while people will take aim at the subsidy, and then blame minimum wages and people who support labor laws. Ad infinitum.
    - yieldcrv 2y ago
      America has many American workers at minimum wage and above. (and below) In this specific sector, the entire industry including retail has shown they will pay many multiples of a higher price for GPUs and cloud services. So if a US grown supply already cost that much out the gate, there is already examples of the market being able to bare that.
      - intended 2y ago
        I get your point - but when I see what you are saying, the focus is on the demand side and price elasticity. There is definitely an unserved market. Even now, there’s many people who want to purchase the service and can’t afford to. However, even if we concede your point in its strongest sense - the revenue is a different beast from the profit margins. Higher labor and compliance costs mean that making things in america is more expensive. The solution is usually to not pay people that much In the end a company is measured by its stock performance. Their incentive is to maximize profit. If the solution is to pay people less, most voters balk.
        SlightlyLeftPad 2y ago
        Exactly, rather than evolve our economy and support high paying jobs which often require high education, the strategy seems to be revert to past things that made our economy successful and neglect the education system. Why? I think it’s because it guarantees votes and is an easy movement to get behind but it’s not /better/. I don’t think it will actually work either because you have to compete with your aforementioned labor costs which isn’t sustainable.
        intended 2y ago
        Right! I say take it a step further - not everyone is excited by sitting in front of a computer and doing intellectual exercises. People like different things and are suited to doing different things as well. But if there is only one way forward, which is Engineering, Medicine and Law - then you have essentially recreated 1970s India and China. But this is 2025 - not only do we have automation we have GenAI, which threatens to take away tons of low level service work. Education is something that takes years to result in blooms. Decades of nurturing. (Hey - thats a useful analogy. Societies plant and harvest crops of trained professionals.) Can people discuss these difficult topics? Nope. Besides, if you do - people start becoming more “liberal”, “disconnected” from ground reality. Code for people not voting the way leadership would like.