by Clubber | 2025-04-05 03:14:33+00:00
>Why should corporations respond to all of this by taking a lot of risk and invest in capital?

They would invest domestically to evade the tariffs. They invested heavily in Mexico since NAFTA to increase profits, the tariffs (hopefully) make it more profitable to manufacture domestically.

>The tariffs aren't based on any sort of sound strategy, just one poorly educated person's black and white, simplistic worldview full of insecurity.

I'm not going to reply to that since it is an emotional argument.

>They change practically by the hour; first they're on, then they're off, then they're on, then they change, thne they're bigger than anyone expected.

I agree it should have been much more predictable and steady. I suspect the fluctuation is due to the countries in question capitulated to what Trump wanted (higher security at the border, removed tariffs on US goods, allowing the CIA to hunt down cartels in Mexico, etc)

>That doesn't make companies say "well, let's expand!" It makes them hunker down. Kill off the least profitable products, cut overhead, etc.

Not expand, relocate. Relocate building new factories with US labor on US soil, run by US workers.

>There's time needed to build the necessary manufacturing, train a workforce, etc.

Agree.

>There's prices skyrocketing when suddenly American manufacturers have less competition.

Short term yes, but tariffs are deflationary long term in advanced economies.

https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-9396.00...

>There's also the plunge in sales of goods we sell to other countries. This is the sort of thing you change over a generation. Not in a day, year, or even four years.

I agree it's very agressive. I don't recall any politicians trying to get manufacturing on shore in earnest in my lifetime (and I'm old), but I'm happy to see an attempt. Drive anywhere down main street in middle America, you'll see a lot of boarded up ghost towns that used to be propserous. Lobbyists spend a lot of money to keep their clients' costs down by using cheap offshore labor. Their clients are of course corporations.

>You can't just snap your fingers and say "you'll buy all your CNC machines from AMERICAN companies!" -

You can offer price incentives. If US CNC machines are $100K and Chinese are $110K with tariffs, they will buy US CNC machines.

>even if we had enough manufacturing capacity, where are you going to get the workers from, particularly as literacy and education levels have been falling, and the whole education system is getting torn up?

Many of these jobs don't require a college degree. On the job training used to be an effective way to do this. It's not going to be easy, but it's possible. There are plenty of people in middle America looking for work.

>...and where are you going to get all the semiconductors from? The US famously had to buy titanium for the SR-71 from Russia through shell companies because the US lacked the mining capacity, the refining capacity, and know-how.

Well if China invades Taiwan, which they have been promising to do and did with Hong Kong, we won't have any modern semiconductors. The US economy and military can't survive without modern semiconductors. TSMC (Taiwan) and Intel just made a deal where TSMC will run Intel's fabs in the US using their manufacturing expertise.

https://www.tomshardware.com/tech-industry/intel-and-tsmc-ag...

There are definitely long term upsides to this if the tariffs stay intact and there are long term upsides if other countries remove tariffs on us. It's certainly rewiring the global trade network, hopefully in our favor. We have one ace up our sleeve, we have the largest market in the world by 2x. That's a lot of negotiating power.