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It will suck on both sides, but the majority of American households can weather a $2-4k blow over the next year as supply chains react. Congress stepping in to

It will suck on both sides, but the majority of American households can weather a $2-4k blow over the next year as supply chains react. Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly. Most of Latin America being placed at the lower end of the announcement means manufacturers who used to be competitive until China Shock set around 2014-16 can be cost competitive again. Other large markets like India, UK, and Vietnam are negotiating as well and India expects as Bilateral Trade Agreement to be closed by Aug-Oct.

deleted 2y ago
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josefresco 2y ago
> $2-4k blow over the next year as supply chains react. It's gonna take a lot longer, and cost Americans a lot more money for "supply chains to react" and move manufacturing to the US.
- alephnerd 2y ago
  Manufacturing isn't returning to the US due to these tariffs. Just like before the tariffs, the US is still too expensive. On the other hand, it has killed cost-competitiveness for Chinese exports directly from China or via transshipment from Vietnam. The tariff regime has now made Latin America (Brazil, Colombia), Turkiye, Philippines, parts of the EU (Poland, Czechia, Romania), and India cost competitive. And NAFTA/USMCA exemptions still remain and this was something Congress pushed back HARD on to ensure.
  - TheOtherHobbes 2y ago
    They're not cost-competitive because they don't have anything like the same manufacturing capacity or R&D facilities for many manufacturing sectors.
  - stevenAthompson 2y ago
    > Manufacturing isn't returning to the US due to these tariffs. Even if it did, who cares? It wouldn't make anything less expensive or better and unemployment was already basically as close to zero as it will ever get. If wages go up that would just increase inflation more. I can't figure out what they even imagined this was going to accomplish.
    - blooalien 2y ago
      > I can't figure out what they even imagined this was going to accomplish. The downfall of Democracy in America and the alienation of all our allies? That is clearly their goal here...
      - deleted 2y ago
        [deleted]
  - surgical_fire 2y ago
    > Manufacturing isn't returning to the US due to these tariffs. Even if it did, is it even desirable? Countries that actually tried to keep manufacturing beyond its usefulness typically punch beneath their weight, such as the case of Germany. The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that. The US, being the most advanced economy in the world, transitioned a long time ago into a finance and service economy. It's kind of fascinating (viewing from the outside) that it want to revert to a more rudimentary economy, and there are people applauding that.
    - disgruntledphd2 2y ago
      > Countries that actually tried to keep manufacturing beyond its usefulness typically punch beneath their weight, such as the case of Germany. Can you explain to me how Germany is punching below their weight? Like, I personally think that having manufacturing in multiple places is good for resiliency reasons at the very least. > The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that. This is a complete myth. The US lost manufacturing because capital controls were removed, and capital went looking for new margins. Like, all of Microsoft's English customer service and technical documentation were in Ireland in the 90's. Is that because Irish people have comparative advantage in these fields? No, it's because wages were super super low compared to the US. We used to have a bunch of clothing factories too, because we were cheap. Fundamentally, stuff actually needs to be made if you want a modern society. You can outsource that to cheaper countries/Asia for a while, but it's not gonna end well. Like, a large proportion of the population are not cut out to be tech or finance professionals, and if you outsource all the factories that they could have worked at, then they'll get really depressed and angry and vote for Brexit/Trump/Le Pen/AfD. And given that most of the rich west are democracies, you can't just pretend these people don't exist.
    - iteratethis 2y ago
      Germany is the largest industrial power after the US and China. What on earth do you mean "punching below its weight"?
TheOtherHobbes 2y ago
Half of Americans say they live paycheck to paycheck, so no - the majority of households will not be able to survive for long if they have to spend an extra few thousand to stay where they are today. Those that can will be cutting spending, which will ripple across the rest of the economy. There's no sign that negotiation is even possible, never mind likely. One tell is that tariffs have been applied to the Heard and McDonald Islands, which are inhabited by penguins and produce no imports or exports. These are not the actions of a rational administration.
- alephnerd 2y ago
  > the majority of households will not be able to survive for long if they have to spend an extra few thousand to stay where they are today. The median American household has an income of around $78,000 [0]. They can survive the blowback. The Trump admin on the other hand will not. As a Sullivan, Raimondo, and IRA supporting Dem, it's a win-win for me. Harsher policies against China have been enacted which will not be rolled back (just like how the Biden admin let Trump 1 era tariffs remain) and it will cause a severe blow as midterm fundraising season has started. The NY by-election for Stefanik's seat itself proved that the tariffs and DOGE have made plenty of purple to light red seats vulnerabile. I wrote some thoughts about this recently [1] [0] - https://www.census.gov/quickfacts/fact/table/US/SEX255223 https://www.census.gov/quickfacts/fact/table/US/SEX255223 [1] - https://news.ycombinator.com/item?id=43574128 https://news.ycombinator.com/item?id=43574128
  - amarcheschi 2y ago
    The whole trump thing went from prospects of economic boom to "the median household is enough wealthy to tolerate the price increase" really, really quick
    - gadflyinyoureye 2y ago
      It was both. Musk said there would be pain for the short term. Trump promised the long game.
eCa 2y ago
Nearly half of the US live paycheck to paycheck[1]. Their lives are not getting easier. [1] https://www.cnbc.com/amp/2024/11/19/bank-of-america-nearly-half-of-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/amp/2024/11/19/bank-of-america-nearly-h...
thefreeman 2y ago
> Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly. I know the senate voted this through. But it still has to pass the house doesn't it? I doubt it will even get to be voted on with Mike Johnson as speaker.
- tacticalturtle 2y ago
  And even then, they’d need a 2/3 majority in both chambers to get past a Trump veto right? There’s no way they’d get that in the house.
doom2 2y ago
It's too bad that INS v Chadha essentially gutted the National Emergencies Act, which could allow Congress to end some/all of the tariffs. In it's original form, the NEA allowed Congress to pass a concurrent resolution to terminate an emergency without needing the president's signature. Now it has to be a joint resolution, which can be vetoed by the president, and what president is going to sign off on the termination of an emergency they themselves declared?
dazilcher 2y ago
> a $2-4k blow over the next year as supply chains react Can you explain the magical supply chain adjustment that will lower prices after a year?
kashunstva 2y ago
> but the majority of American households can weather a $2-4k blow over the next year - Wasn’t this the administration that campaigned on lowering costs of goods? Now, not even a half-year in, the narrative is “Sorry, deal with it, while we chaotically disrupt global markets.” - The administration is apparently intent on a strategy that builds the U.S. manufacturing base. That’s not a one-year horizon, if ever.
- goatlover 2y ago
  There was a former Republican President who ran on the promise, "Read my lips, no new taxes". And then he raised taxes.
UncleMeat 2y ago
The expanded child tax credit was ~3k per year. It absolutely clobbered child poverty rates. This sort of delta in expenses can change a family's fortune significantly.
3vidence 2y ago
Feels like peak HN to just say all Americans can weather extra thousands per year...
Tadpole9181 2y ago
And, of course, all those Americans who were already poor and are now even poorer will have the extra time and money to start businesses and manufacturing lines. Especially with the 30% increase on prices for all the machinery and raw goods they may need to import.

deleted 2y ago

[deleted]

josefresco 2y ago

> $2-4k blow over the next year as supply chains react. It's gonna take a lot longer, and cost Americans a lot more money for "supply chains to react" and move manufacturing to the US.

alephnerd 2y ago
Manufacturing isn't returning to the US due to these tariffs. Just like before the tariffs, the US is still too expensive. On the other hand, it has killed cost-competitiveness for Chinese exports directly from China or via transshipment from Vietnam. The tariff regime has now made Latin America (Brazil, Colombia), Turkiye, Philippines, parts of the EU (Poland, Czechia, Romania), and India cost competitive. And NAFTA/USMCA exemptions still remain and this was something Congress pushed back HARD on to ensure.
- TheOtherHobbes 2y ago
  They're not cost-competitive because they don't have anything like the same manufacturing capacity or R&D facilities for many manufacturing sectors.
- stevenAthompson 2y ago
  > Manufacturing isn't returning to the US due to these tariffs. Even if it did, who cares? It wouldn't make anything less expensive or better and unemployment was already basically as close to zero as it will ever get. If wages go up that would just increase inflation more. I can't figure out what they even imagined this was going to accomplish.
  - blooalien 2y ago
    > I can't figure out what they even imagined this was going to accomplish. The downfall of Democracy in America and the alienation of all our allies? That is clearly their goal here...
    - deleted 2y ago
      [deleted]
- surgical_fire 2y ago
  > Manufacturing isn't returning to the US due to these tariffs. Even if it did, is it even desirable? Countries that actually tried to keep manufacturing beyond its usefulness typically punch beneath their weight, such as the case of Germany. The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that. The US, being the most advanced economy in the world, transitioned a long time ago into a finance and service economy. It's kind of fascinating (viewing from the outside) that it want to revert to a more rudimentary economy, and there are people applauding that.
  - disgruntledphd2 2y ago
    > Countries that actually tried to keep manufacturing beyond its usefulness typically punch beneath their weight, such as the case of Germany. Can you explain to me how Germany is punching below their weight? Like, I personally think that having manufacturing in multiple places is good for resiliency reasons at the very least. > The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that. This is a complete myth. The US lost manufacturing because capital controls were removed, and capital went looking for new margins. Like, all of Microsoft's English customer service and technical documentation were in Ireland in the 90's. Is that because Irish people have comparative advantage in these fields? No, it's because wages were super super low compared to the US. We used to have a bunch of clothing factories too, because we were cheap. Fundamentally, stuff actually needs to be made if you want a modern society. You can outsource that to cheaper countries/Asia for a while, but it's not gonna end well. Like, a large proportion of the population are not cut out to be tech or finance professionals, and if you outsource all the factories that they could have worked at, then they'll get really depressed and angry and vote for Brexit/Trump/Le Pen/AfD. And given that most of the rich west are democracies, you can't just pretend these people don't exist.
  - iteratethis 2y ago
    Germany is the largest industrial power after the US and China. What on earth do you mean "punching below its weight"?

TheOtherHobbes 2y ago

Half of Americans say they live paycheck to paycheck, so no - the majority of households will not be able to survive for long if they have to spend an extra few thousand to stay where they are today. Those that can will be cutting spending, which will ripple across the rest of the economy. There's no sign that negotiation is even possible, never mind likely. One tell is that tariffs have been applied to the Heard and McDonald Islands, which are inhabited by penguins and produce no imports or exports. These are not the actions of a rational administration.

alephnerd 2y ago
> the majority of households will not be able to survive for long if they have to spend an extra few thousand to stay where they are today. The median American household has an income of around $78,000 [0]. They can survive the blowback. The Trump admin on the other hand will not. As a Sullivan, Raimondo, and IRA supporting Dem, it's a win-win for me. Harsher policies against China have been enacted which will not be rolled back (just like how the Biden admin let Trump 1 era tariffs remain) and it will cause a severe blow as midterm fundraising season has started. The NY by-election for Stefanik's seat itself proved that the tariffs and DOGE have made plenty of purple to light red seats vulnerabile. I wrote some thoughts about this recently [1] [0] - https://www.census.gov/quickfacts/fact/table/US/SEX255223 https://www.census.gov/quickfacts/fact/table/US/SEX255223 [1] - https://news.ycombinator.com/item?id=43574128 https://news.ycombinator.com/item?id=43574128
- amarcheschi 2y ago
  The whole trump thing went from prospects of economic boom to "the median household is enough wealthy to tolerate the price increase" really, really quick
  - gadflyinyoureye 2y ago
    It was both. Musk said there would be pain for the short term. Trump promised the long game.

eCa 2y ago

Nearly half of the US live paycheck to paycheck[1]. Their lives are not getting easier. [1] https://www.cnbc.com/amp/2024/11/19/bank-of-america-nearly-half-of-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/amp/2024/11/19/bank-of-america-nearly-h...

thefreeman 2y ago

> Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly. I know the senate voted this through. But it still has to pass the house doesn't it? I doubt it will even get to be voted on with Mike Johnson as speaker.

tacticalturtle 2y ago
And even then, they’d need a 2/3 majority in both chambers to get past a Trump veto right? There’s no way they’d get that in the house.

doom2 2y ago

It's too bad that INS v Chadha essentially gutted the National Emergencies Act, which could allow Congress to end some/all of the tariffs. In it's original form, the NEA allowed Congress to pass a concurrent resolution to terminate an emergency without needing the president's signature. Now it has to be a joint resolution, which can be vetoed by the president, and what president is going to sign off on the termination of an emergency they themselves declared?

dazilcher 2y ago

> a $2-4k blow over the next year as supply chains react Can you explain the magical supply chain adjustment that will lower prices after a year?

kashunstva 2y ago

> but the majority of American households can weather a $2-4k blow over the next year - Wasn’t this the administration that campaigned on lowering costs of goods? Now, not even a half-year in, the narrative is “Sorry, deal with it, while we chaotically disrupt global markets.” - The administration is apparently intent on a strategy that builds the U.S. manufacturing base. That’s not a one-year horizon, if ever.

goatlover 2y ago
There was a former Republican President who ran on the promise, "Read my lips, no new taxes". And then he raised taxes.

UncleMeat 2y ago

The expanded child tax credit was ~3k per year. It absolutely clobbered child poverty rates. This sort of delta in expenses can change a family's fortune significantly.

3vidence 2y ago

Feels like peak HN to just say all Americans can weather extra thousands per year...

Tadpole9181 2y ago

And, of course, all those Americans who were already poor and are now even poorer will have the extra time and money to start businesses and manufacturing lines. Especially with the 30% increase on prices for all the machinery and raw goods they may need to import.