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re: Will tariffs really increase domestic manufacturing?
Posted on 4/3/25 at 2:47 pm to Harry Boutte
Posted on 4/3/25 at 2:47 pm to Harry Boutte
Even in that scenario, that doesn’t decrease demand when prices are lowered. Like I said, the degree to which the decrease impacts a specific market will vary. They are all still slaves to supply and demand.
I’m also being very generous in that 25% number. There are a ton where that number could easily be 100% or higher, depending on the country. Are people really going to sit here and try and argue that a price reduction of our goods on the global markets won’t have a positive impact on trade discrepancies?
I’m also being very generous in that 25% number. There are a ton where that number could easily be 100% or higher, depending on the country. Are people really going to sit here and try and argue that a price reduction of our goods on the global markets won’t have a positive impact on trade discrepancies?
This post was edited on 4/3/25 at 2:51 pm
0
Posted on 4/3/25 at 2:55 pm to CharlieTiger
If you bring back 15% of the manufacturing jobs that left, that is still a very significant number. Plus there will be knock on effects for businesses that support a single plant with services and materials. Bringing back any degree of manufacturing is good for the economy and good for national security as we saw in COVID when China threatened to shut off access to pharmaceuticals.
Posted on 4/3/25 at 3:10 pm to Drizzt
quote:
Bringing back any degree of manufacturing is good for the economy
That's not true. Bringing back jobs that are overpriced for our market is not good. It's quite inefficient and suboptimal.
quote:
and good for national security
"Infrastructure", you mean?
Posted on 4/3/25 at 3:29 pm to dcw7g
I suspect the US electorate will, at long last, come to it's senses and vote out the adolescent morons well before the manufacturers complete the 5-10 year retooling necessary to move a meaningful amount of activity to the US.
Posted on 4/3/25 at 4:02 pm to Boss
quote:
I did a fun search on indeed for manurfacturing jobs starting at 45k+. Atlanta had over 2,000, LA 7,000, New Orleans over 1000, Mobile, AL over 600, St. Louis 2000, Cincinnati 6,000, Pittsburgh 4,000, Lexington 3,000.
Saw FL is looking to change labor laws to allow less restrictions on 14 year olds.
Do I think we will see all these new manufacturing jobs, good pay, filled with Americans, No.
Do I think most of these pledges will follow through once new President is in office, no.
I would love to be wrong on both accounts.
Posted on 4/3/25 at 4:34 pm to dcw7g
All the decision makers of the corporate world knew this had to happen eventually. Globalism is coming to an end.
Posted on 4/3/25 at 6:00 pm to jcaz
quote:
Globalism is coming to an end.
Posted on 4/3/25 at 6:23 pm to bluemoons
quote:
We are not a manufacturing-centric economy anymore. This idea that tariffs are just going to "make American manufacturing great again" presupposes that American manufacturing can be made great again, which is debatable at best.
American manufacturing is arguably pretty great. We are manufacturing more than we ever have. We are just doing it with far fewer jobs due to increased productivity and moving into more high value manufacturing.
Manufacturing is going to remain capital intensive, but perhaps not labor intensive.
One could say the US economy has pivoting nicely into being a service sector economy to maintain its employment.
I’m just not sure manufacturing “jobs” will really exist into the future, and we have 0% chance of competing against China in low tech manufacturing. 0% chance. That’s a playing field we want to avoid.
Posted on 4/3/25 at 7:24 pm to GoCrazyAuburn
quote:
The discussion at hand is will this increase domestic manufacturing. There are multiple ways that can happen. Your desire to only focus on one very specific type of manufacturing and ignore the rest is very on par.
Eh, I think you might be the one with the hyper-specific focus here.
If you’re looking to increase domestic manufacturing, then domestic demand for that domestic manufacturing is by far the biggest factor. As others have pointed out, short-term tariffs likely do not do much on that front because we are back to baseline (importing cheap goods) as soon as the tariffs drop off.
You’re making the point that we should theoretically see increased exports if other countries remove/reduce trade barriers. You’re not wrong, but that’s a much smaller piece of the pie. The question then becomes “how much would you have to increase exports for this to be worthwhile and create a meaningful increase in domestic manufacturing?”
Exports of goods represent something like 6-7% of US GDP. About a third of these exports are to Canada and Mexico, countries who have historically been free-trade partners to the US due to NAFTA and the subsequent USMCA. The baseline is already no tariffs for these countries.
Then you have to account for the fact that oil & gas and agriculture make up a huge portion of our “goods” exports. These are commodities that often are not subject to tariffs in the first place because of their economic importance to importing nations.
What you’re left with is a pretty small percentage of the economy that can reasonably be expected to see growth in the case of reduced tariffs elsewhere. Those potential gains can easily be wiped out if you suffer a recession in the interim.
Another problem is that while the US tariffs on imports should theoretically incentivize further investment in domestic manufacturing, those are not necessarily the same industries that stand to benefit from any future reduction of tariffs abroad. As a result, the longer the trade war lasts, the more we should see growth stagnate in the industries impacted the most. Combine this with the fact that our trading partners are incentivized to find other sources for those goods, and you could end up with damage to those industries even if you’re eventually successful in reducing other countries’ tariffs.
Meanwhile that theoretical incentive for investment in US manufacturing for domestic consumption is questionable anyway, because you don’t know how long the tariffs will last. The uncertainty is causing absolute chaos in my industry right now. A company looking at making FID on a major manufacturing project right now isn’t basing it on a 4-year ROI. In fact, if they’re making the decision now they may not even be online yet in 4 years. They don’t know if the next president (or even the current one) will keep tariffs in place. The only thing they know for certain is that the cost to build just went way up.
/rant
Posted on 4/3/25 at 7:51 pm to frogtown
quote:
Those are pledges.
See what happened to the Foxconn pledge in Trump's first term
Did those jobs ever materialize?
Yes, Foxconn opened. Yes it was scaled back. But because they are there, Microsoft is spending $3.3 billion to build a new data center at Foxconn's site in Wisconsin, where the Taiwanese manufacturer had previously planned a display factory.
They also pay millions in property taxes.
Initial Property Tax: Foxconn initially paid around $5 million in property taxes annually.
Increased Payments: In 2023, Foxconn's property tax payments increased to about $36 million.
Largest Taxpayer: Foxconn is the largest taxpayer in both the Village of Mount Pleasant and Racine County.
Local Development Agreement: Foxconn is fulfilling all financial obligations under the local development agreement.
Tax-Increment Financing District (TID) Payments: Foxconn must make TID payments starting in 2023, amounting to about $30 million a year.
Special Assessment: Foxconn pays a $7.3 million special assessment each year.
Tax Credits: Foxconn has received millions in state tax credits for investment and job creation at its Mount Pleasant campus.
Microsoft's Data Center: Foxconn agreed to give up its development rights to 630 acres of land in Mount Pleasant's tax incremental financing district #5, as Microsoft has gained approvals to expand its plans for a massive data center campus on that land.
That's not counting the jobs to build the plant.
Posted on 4/3/25 at 7:55 pm to SlowFlowPro
quote:
Bringing back jobs that are overpriced for our market is not good.
You people are being intentionally dumb at this point. The point of tariffs is so that the market aligns with job economics. This is not that hard. You tariff Asian slave labor so American labor can compete. I’m starting to think some of you are actually retarded.
And I clearly meant national security and not infrastructure. National security means you have to be able to make essential products for yourself.
Posted on 4/3/25 at 8:55 pm to lostinbr
quote:
If you’re looking to increase domestic manufacturing, then domestic demand for that domestic manufacturing is by far the biggest factor. As others have pointed out, short-term tariffs likely do not do much on that front because we are back to baseline (importing cheap goods) as soon as the tariffs drop off.
I’ve not disagreed with any of this.
quote:
You’re making the point that we should theoretically see increased exports if other countries remove/reduce trade barriers. You’re not wrong, but that’s a much smaller piece of the pie. The question then becomes “how much would you have to increase exports for this to be worthwhile and create a meaningful increase in domestic manufacturing?”
I’ve also asked basically this same question in this thread. Maybe you are conflating my answer to the OP’s question with an opinion on if this strategy will work, ultimately? I provided two ways that this tariff strategy can increase manufacturing domestically. That’s it. I also said the risk can backfire if we overvalue our position. At no point did I or have I said what is being done will 100% work. I just provided info on the stated endgame of what Trump thinks (or hopes) will happen.
I think if what comes from all this is we tariff their goods the same as we are being tariffed, long term, it will be a problem for everyone involved.
quote:
Exports of goods represent something like 6-7% of US GDP. About a third of these exports are to Canada and Mexico, countries who have historically been free-trade partners to the US due to NAFTA and the subsequent USMCA. The baseline is already no tariffs for these countries.
The baseline for those countries is absolutely not “no tariffs”.
quote:
Then you have to account for the fact that oil & gas and agriculture make up a huge portion of our “goods” exports. These are commodities that often are not subject to tariffs in the first place because of their economic importance to importing nations. What you’re left with is a pretty small percentage of the economy that can reasonably be expected to see growth in the case of reduced tariffs elsewhere. Those potential gains can easily be wiped out if you suffer a recession in the interim. Another problem is that while the US tariffs on imports should theoretically incentivize further investment in domestic manufacturing, those are not necessarily the same industries that stand to benefit from any future reduction of tariffs abroad. As a result, the longer the trade war lasts, the more we should see growth stagnate in the industries impacted the most. Combine this with the fact that our trading partners are incentivized to find other sources for those goods, and you could end up with damage to those industries even if you’re eventually successful in reducing other countries’ tariffs. Meanwhile that theoretical incentive for investment in US manufacturing for domestic consumption is questionable anyway, because you don’t know how long the tariffs will last. The uncertainty is causing absolute chaos in my industry right now. A company looking at making FID on a major manufacturing project right now isn’t basing it on a 4-year ROI. In fact, if they’re making the decision now they may not even be online yet in 4 years. They don’t know if the next president (or even the current one) will keep tariffs in place. The only thing they know for certain is that the cost to build just went way up.
The rest I generally don’t disagree with. Again, I was answering a very general question with what the “goal” is for going on. As also said somewhere else in this thread, the discussion on if that will or won’t work is a whole other discussion. What is being done is a big risk. I think something needs to be done to try and combat what other countries are doing with their tariffs in our goods and the generally awful trade agreements we’ve signed into over the last few decades. I don’t know what the right answer there is though.
quote:
I think you might be the one with the hyper-specific focus here.
No, not really. I answered a very specific question.
This post was edited on 4/3/25 at 8:59 pm
Posted on 4/3/25 at 9:03 pm to GoCrazyAuburn
quote:
Don't know. It is a 10 year pledge.
I've not once said I think they can or will actually commit to it all. But, seeing as people are wanting specifics what has been pledged so far, I am offering examples.
If he wants to have a discussion on how much we think these pledges will actually materialize, that is a different discussion. Seeing as this entire thread is based on a theoretical question, it makes his resposne a silly one, when I flat out admit in my first post that a pledge is just a pledge and ultiamtely means nothing until hard dollars are committed.
But isn't that the issue with all of this? Companies can and will say whatever is needed to gain favor for the next 4 years with no intentions of actually spending the money because they know it is a waste.
Trump may change his mind next week, and all of this is gone.
The next President, no matter which party, will remove this nonsense either way.
All companies have to do now is play the game and wait until Trump either changes his mind (for the 4th time) or wait until he is out of office.
Posted on 4/3/25 at 9:04 pm to Jjdoc
quote:
That's not counting the jobs to build the plant.
Who cares. Foxconn pledged to create 13000 full time jobs. They only created 1500.
Proof that these "pledges" are just that, pledges.
Posted on 4/3/25 at 9:08 pm to The_Duke
quote:
But isn't that the issue with all of this?
I don’t know if I’d say it is “the” issue with it, but it is undeniably a major issue if all this is to work or not.
Posted on 4/3/25 at 9:15 pm to Drizzt
quote:
You tariff Asian slave labor so American labor can compete.
My point stands
quote:
Bringing back jobs that are overpriced for our market is not good.
It's economically optimal to have countries of a less economic status supply this labor so we get the economic benefits. Nerfing our economy so that we're devolved to the point where these jobs make sense is quite counter-productive (but what you'd expect from Leftist redistribution)
quote:
And I clearly meant national security and not infrastructure. N
"National Security" for MAGA is the same as how DEMs used "infrastructure".
This went WAY over your head, apparently
Posted on 4/3/25 at 9:40 pm to GoCrazyAuburn
quote:
Very valid question. If we can ever get rid of the stigma and people realize the amount of money that can be made in these fields, can easily happen. Will it? Hard to say.
This great amount of money in manufacturing jobs is why they moved overseas.
The question isn’t about whether companies will pledge to build here. The real question is whether today’s Americans are willing to pay for American labor.
Posted on 4/3/25 at 9:44 pm to slackster
You understand that goes both ways right?
Posted on 4/3/25 at 9:48 pm to UltimaParadox
BS, manufacturing work has become a national security issue. There is a major war coming whether you agree or not and we're gonna need the infrastructure and manpower to build weapons, process foods, and medicines for the war effort. COVID exposed our vulnerabilities. Hopefully, no war comes but we must alway be ready.
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