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Tariff may be worse for the economy, but threatening tariffs as a "negotiating tactic" with Canada and Mexico is just plain stupid. Unless if they have insider
by Aunche 2y ago
Tariff may be worse for the economy, but threatening tariffs as a "negotiating tactic" with Canada and Mexico is just plain stupid. Unless if they have insider information, businesses simply have no idea how to operate. For example, it would take years to build a factory, and they don't want to sink hundreds of millions in a factory in the US if tariffs don't actually go through or vice versa.
- andrewla 2y agoI completely agree, but I would argue this whether or not the stock market is going up or down in the immediate term.
- rayiner 2y agoThat makes building the factory in the U.S. the safe choice whether tariffs are implemented or not.
- Aunche 2y agoHow is it safe to spend all this money on a domestic factory just for it to be cheaper to import everything anyways? The safe choice is to hoard cash and inventory until they have certainty of whether tariffs will happen or not. All Trump is doing is creating unnecessary deadweight loss when he can just negotiate without threatening a suicide pact.
- lostdog 2y agoThe safe choice is not to build the factory. Even if you build the factory in the US to avoid tariffs on the goods you sell, did all your inputs also get built in the US? Are the tariffs on your inputs going to wipe out your profits? To build a factory you want to predict out the cost vs benefit. But if the costs are highly uncertain, then the numbers in your spreadsheet fluctuate wildly. So you just sit on the money you have and wait to build the factory until things are more certain.