by ericmay | 2025-05-01 15:14:19+00:00
> To move a factory, people have to stop doing the work they're currently paid to do.

> Destroying your ability to import things that people need for their work will indeed free up people to make those things in local factories, by massively increasing unemployment. Do you, personally, want to switch from your current job to making iPhones?

I don't, but that's because it wouldn't be economically productive for me to do so. For someone working at Waffle House it might be.

Let's be very clear though that every economic decision we make as a country has repercussions, and winners and losers. Remember the coal workers who had to Learn 2 Code?

> all the tariffs do is act like a stealth purchase tax that reduces aggregate demand without inducing production to relocate (though production may claim to relocate for reasons of political correctness, they won't actually move from tariffs below this level).

Well we do need to raise taxes to pay for these services we want and/or to reduce the national debt. I don't believe that this is the best or only way to do that but that's a nice benefit in the scenario you are describing. If we purchase less that's better for the planet too.

No doubt many companies won't relocate at least in the short term, but some will.

I don't disagree with your assessment related to the average tariffs right now, but that figure is very much subject to change, and something like the exchange rate where China has put artificial pressure on the currency to keep it lower in value than it might otherwise be is an example that I think would be worthwhile analyzing when looking at the entire picture.

> The Chinese can cope with this because of two things you don't have: (1) lower starting expectations because they're moving through the process of industrialisation and started low, (2) lower cost of living.

Cope in what way? America will be just fine even with higher prices or even supply change shortages and can find other manufacturers to produce goods. China will be just fine too losing money and jobs but finding other markets like the EU for products that no longer come to America. Both countries can cope with less trade with each other. I've seen this trope repeated time and time again in these discussions about how China somehow is exceptional and can cope with struggle more than Americans and it's just as faulty of an assumption as claims to American exceptionalism are.

> Wage pressure in this case would be pointing in the opposite direction.

> Those are the same point.

I don't think so but maybe you cold elaborate if you have the inclination? It's also a little difficult to discuss because neither of us have really laid out assumptions very well so we may be discussing different things at times.

Generally speaking though in the case of unemployment rates which I think is what I was responding to, having to build new factories in the United States (however many) with a low unemployment by definition would increase wages simply due to labor supply and demand.

The person I was responding to (again going off memory here and could be wrong and I apologize if so - maybe it was you! :) ) was supposing that this was a bad thing or that the jobs couldn't come back because of the low unemployment rate because there wouldn't be any workers.

I disagree with that general assessment completely.

We would see a rise in wages and increases in investment in automation and manufacturing technology due to the rise in labor cost.