3 ms·

Note that these are near-term impacts. In the long term the listed prices may be undercut by domestic manufacturers popping up or expanding their product lines.

Note that these are near-term impacts. In the long term the listed prices may be undercut by domestic manufacturers popping up or expanding their product lines. I haven't heard much analysis on that scale, but would be interested to read more if anyone finds some.

mulmen 2y ago
Only if we have domestic supply of all the inputs, which we don’t. Domestic manufacturing still relies on imported materials.
- WorkerBee28474 2y ago
  Yes, but input materials are always cheaper than finished products (for any reasonably run business). Often below half the price.
  - mulmen 2y ago
    Yes that’s the problem. If inputs get more expensive it is harder to build domestically because nobody will build things when the inputs cost more than the output.
_DeadFred_ 2y ago
Or we might invent Fusion power and energy might become free. Our future could be very bright, lots of maybes. Or it could play out like this: initially, it doesn't make sense to manufacture locally when the price is $5. So tariffs are raised to artificially inflate the price to $8, making domestic manufacturing viable. But now we're looking at a government protected industry. If or when that artificial price support is removed, we risk losing local manufacturing again. This isn’t a model for lower prices — it’s a model for sustaining industry through artificially high pricing and policy-based constraints.
rblatz 2y ago
The only issue here is that companies need certainty the tariffs will be around for a while before they would take on the massive cost of on-shoring manufacturing. Which is lacking in this current situation.
- WorkerBee28474 2y ago
  Not 100% certainty, but if the probability that they stay is p, then if must be that p * ROE_if_remain + (1 - p) * ROE_if_reverted >= desired_return.
berbec 2y ago
Is there even an American domestic GPU manufacturer? I can't imagine it's an easy, or quick thing, to build out a factory capable of churning out 5090s, so the best bet would be someone capable of expanding quickly.
- WorkerBee28474 2y ago
  I don't think so. That said, the 5090 is a 4nm chip and TSMC Arizona is currently manufacturing other 4nm designs at scale.
acdha 2y ago
First, as people have pointed out you need a high likelihood that tariffs will be high for many years - advanced manufacturing costs a lot to setup and you can’t just build factories and hire skilled workers overnight. Second, domestic manufacturers are aware of how much their competition charges. If a Taiwanese part costs $100, the domestic provider is going to charge $98, not $80.

mulmen 2y ago

Only if we have domestic supply of all the inputs, which we don’t. Domestic manufacturing still relies on imported materials.

WorkerBee28474 2y ago
Yes, but input materials are always cheaper than finished products (for any reasonably run business). Often below half the price.
- mulmen 2y ago
  Yes that’s the problem. If inputs get more expensive it is harder to build domestically because nobody will build things when the inputs cost more than the output.

_DeadFred_ 2y ago

Or we might invent Fusion power and energy might become free. Our future could be very bright, lots of maybes. Or it could play out like this: initially, it doesn't make sense to manufacture locally when the price is $5. So tariffs are raised to artificially inflate the price to $8, making domestic manufacturing viable. But now we're looking at a government protected industry. If or when that artificial price support is removed, we risk losing local manufacturing again. This isn’t a model for lower prices — it’s a model for sustaining industry through artificially high pricing and policy-based constraints.

rblatz 2y ago

The only issue here is that companies need certainty the tariffs will be around for a while before they would take on the massive cost of on-shoring manufacturing. Which is lacking in this current situation.

WorkerBee28474 2y ago
Not 100% certainty, but if the probability that they stay is p, then if must be that p * ROE_if_remain + (1 - p) * ROE_if_reverted >= desired_return.

berbec 2y ago

Is there even an American domestic GPU manufacturer? I can't imagine it's an easy, or quick thing, to build out a factory capable of churning out 5090s, so the best bet would be someone capable of expanding quickly.

WorkerBee28474 2y ago
I don't think so. That said, the 5090 is a 4nm chip and TSMC Arizona is currently manufacturing other 4nm designs at scale.

acdha 2y ago

First, as people have pointed out you need a high likelihood that tariffs will be high for many years - advanced manufacturing costs a lot to setup and you can’t just build factories and hire skilled workers overnight. Second, domestic manufacturers are aware of how much their competition charges. If a Taiwanese part costs $100, the domestic provider is going to charge $98, not $80.