by piva00 | 2025-04-07 07:26:03+00:00
It's the messaging which you need to apply a reality check: how is it going to happen?

Let's say I'm an industrialist, I have an HQ in the USA while my products are made in factories around Asia (China, Vietnam, Taiwan), I invested some US$ dozens of millions to setup production where labour costs are lower, my whole pricing depends on comparative advantages: my USA HQ does R&D by well-paid workers, the designs are then dispatched to be produced at lower cost factories.

Now my products will be taxed some 30-50% more, I will have a big drop in sales so the forecast for the foreseeable future is looking like a loss for many quarters, I'd need to invest some US$ dozens of millions to setup factories in the USA, hire people to do the work that Vietnamese workers do but paying US salaries, or invest a ton more in automation and robots to run these factories as cheap as I currently can in Asia. But my financial outlook is pretty bad, I won't be able to sell my products, there's a major risk there so I can't get very low interest loans since no bank can know if I'll be able to pay it. Also, should I invest this in case it will take some 5-10 years to recoup the investment? How will tariffs look like in that time frame? If I invest and competitors don't and tariffs get struck down/removed I will have just burnt money, evaporated it, while my competitors get an advantage by saving it. Repeat this across thousands of companies to get the scale of the dilemma.

I will need to put more collateral to get cheaper rates, while it's looking like I will be potentially losing money until I manage to setup these factories. I also need suppliers, and they need to setup shop in the USA as well because if not my inputs will all be more expensive anyway from the tariff tax, so I'm being squeezed in that direction as well.

Multiply this by thousands and thousands of companies, all depending on a global supply chain, how the actual fuck will this work out in reality to onshore production when these companies all got squeezed all at the same time?

There is no basis in reality for the messaging, it's devoid of any actual plan, any regards for the potential impact not to the "economy™" but to all the people employed by all the affected companies who will see a massive drop in sales, the workers are the consumers and when they get laid off because the companies can't keep paying salaries it will further depress outlooks on sales, turning into even riskier deals for financiers to take to support the necessary investments to onshore production of entire supply chains.

To top it all off there will be massive inflation since all prices went up overnight by being taxed through tariffs, less consumer spending, fewer products being purchased, companies earning less, firing people, less consumer spending, fewer purchases, so on and so forth.

It's a death spiral completely triggered by maniacs, no confidence crisis, no major shock from a natural disaster (i.e.: a pandemic), just a bunch of lunatics trying to impose a new world order through decree.

And stupid people eat this messaging up, they want to believe it will be all fine and dandy even if it's one of the stupidest acts ever taken by a major government...

It's all just so fucking stupid, I still can't believe how it is all just plainly so stupid.