There’s no reason to assume that domestically produced televisions (or other products) will be significantly lower in price than imported products that are subject to tariffs.
It’s all about competition. If the Trump administration puts a three hundred dollars tariff on imported televisions, domestic producers have no incentive to continue selling their televisions for the current cost. The price charged by their competition just went up by three hundred dollars. Domestic television producers will now be able to raise their prices by two hundred and fifty dollars and still be the cheaper product. And that two hundred and fifty dollars will just be extra profit for them.
My biggest quibble about the Presidential debates was Kamala not explaining to viewers that this was the upshot of Trump imposing tariffs, when he brought it up. He made it seem like it lowered taxes thus saving people money.
Realistically, he is using it punitively to punish those he has a beef with. He doesn’t give a good god-damn that it raises the final price to consumers, his base included.
And while doing without, maybe they find an alternative. Stop using Chinese widgets, and start using less-expensive gadgets. Then the American widget manufacturers who finally bring their new factory online discover that the market that used to exist is now a fraction of what it once was, because gadgets have become the de facto industry standard. They’ll have to spend years selling at a reduced price to win back the users, if that’s even possible.
Customs guys, basically. I once tried to bring a box of T-shirts into the US to sell at a seminar. I’d had them printed up for another event, but had some leftovers. The customs guys saw the box, and when I explained what it was, they started asking about where they were made, and all sorts of things. They wanted documentation of the whole supply chain. No way I had that information, but they did let me turn around and store them at the Canadian Border shack, where I picked them up on the way home.
I meant “less expensive after the tariffs”. The whole point of a massive tariff is to drive the foreign suppliers out of the market.
Also, while widgets and gadgets may do approximately the same thing, there may be a reason to prefer a more expensive widget’s performance vs the cheaper gadget. But if widgets suddenly spike in price, maybe that performance gap becomes less important.
The countries that make higher end products tend to make products that require higher levels of precision and engineering. They used to produce low-cost widgets, built up factories and skills to make those things, improved those factories and skills to the point where they could make better things, and let other countries take over the lower-level stuff. It would be a waste to use high-end tools to make cheap products that don’t need high precision. Neither the US nor other high-income countries are currently suffering from labor shortages nor do they have empty factories just sitting around waiting for workers. Our workers wouldn’t be interested in most of these jobs, relative to their current jobs working in air-conditioned office, software and design jobs.
The countries in competition with China are places like Vietnam and Indonesia. But they have far smaller populations. While they are liable to gain a bit of a bonus from all of this (if we don’t proceed on to tariff them as well), they will struggle to pick up the slack.
There may be a few places making premium low-end stuff. Looking for things like nice linen sheets, smaller furniture, etc. I’ve seen that Ukraine, Lithuania, etc. are making some good stuff that’s more like hand-crafted. I’m not sure whether they’re making things like toasters and microwaves, though. There’s really only China and South-East Asia.
Overall, if we wanted to shift manufacturing away from China to the rest of South-East Asia, Trump shouldn’t have killed the Trans-Pacific Partnership. At best, he’ll just end up in the same place, traveling a much less comfortable path.
Right, but there is a huge range of products that are no longer produced in the US in mass market quantities. Look at textiles, which the US produced in huge quantities until post-WW2. Most of this has been offshored where the US grows and exports raw cotton and then imports finished goods because the cost is so much lower overseas.
Ramping up new industries for domestic production is capital and labor intensive. This can’t happen overnight.
you cant really produce shit in the Usa if you dont have the shit-ecosystem in place.
Wanna start producing trousers on the same scale like it were 1960? … good luck finding 20 millón zippers for them in the states … and “trousers Machínes” …
Now imagine that for more complex products with 100s of parts and sub-parts.
Hey, lets start building motorcycles again like it was 1960 … not gonna happen … you either need to start importing parts from specialized compañías (in s-e-asia) or you can start producing them in the Usa and have a motorbike Rolling off the line in 3-5 years from now … costing 20k … producing something like a $5-7k mid-sized Honda with honda quality Will not happen.
And again, for the most part we shouldn’t be focused on getting those jobs back.
China is doing much the same as Japan did, and moving towards higher tech production and services having initially got a foot in the door with labor-intensive manufacturing and assembly.
I know that electrical goods can feel more tangible than cloud services or whatever, especially when the former has a “made in china” printed on it. But a developed country should be more focused on the latter; it brings more value in the modern economy. Designing the iPhone brings a lot more wealth than being the place where it is assembled.
It would be pretty ironic if the end of the US’ dazzling economic run comes from lying about the state of the economy and then getting people to believe a race to the bottom is needed.
Ultimately a successful society is one where even the least productive ordinary citizens actually create value in excess of their cost of upkeep. With that cost denominated in the local currency and using local costs.
We can certainly collectively choose to pay to imprison the criminals and pay to feed and house the orphans, the elderly, and the disabled. That’s a civilized and charitable thing to do.
But everybody else needs to each individually earn their upkeep, where their lifetime value-add exceeds their lifetime consumption and most years (months?) their annual value-add exceeds their annual consumption.
If that’s impractical, we’re talking about a completely different economic system with a UBI and an acceptance that we have far more metaphoric mouths to feed than we have people doing anything useful to create their metaphoric food.
IMO the challenge is the large fraction of not-disabled folks who are hopeless at generating more value in an advanced hi-tech economy than their own cost of maintenance. What of them?
Euthenase them all as soon as their productivity drops to a point where their consumption exceeds their production. There’d be a considerable saving in social security.
Clearly not a realistic option. But it is the problem our society needs to resolve.
There’s plenty of total productivity around to feed & house everyone. But not if the most successful want to keep all of theirs for themselves. The end state of that approach is gated guarded compounds for the 1% and favelas for the 99%. We sure don’t want that either.
What do we want and which subset of we gets to decide that on what basis?
Hellifino. But overall I am not optimistic that human nature will permit most of the wiser choices.
I think you’re arguing on a different topic.
AI is arguably a bigger threat to high-skill jobs like software engineer or lawyer (though personally I am optimistic; I think we’ll just largely do more with the same number of humans) than it is to low-skill manual labor or menial work.
It should also be remembered that just because the salary for a job is comparatively low, that doesn’t mean that that work is not valuable; it just means that market forces means that person is comparatively replaceable with other people. (I think there can be a temptation for some to see salary as some kind of measure of contribution to society).
We’ve already got a tax and welfare system which redirects income from those who have to those who have not; from those who produce to those who consume. We’ve had that for over a century; the whole developed world has.
The rich put up with this, basically, because living in a stable, peaceful and productive world is more valuable to them than keeping every last penny they have. The law of diminishing returns means that a millionaire’s last penny is worth a lot less to him that a pauper’s last penny is worth to the pauper; hence it is rational to transfer the millionaire’s penny to the pauper since this maximinses overall welfare and some of the increase in welfare can accrue to the millionaire.
The whole world has this system because, basically, it works.It does what it’s designed to do.
After that, there’s nothing left to talk about bar the fine-tuning; exactly how redistributive should a country’s tax-and-welfare system be? There’s no objectively correct answer to that; it depends on societal value judgments which may vary from society to society. But, as the distribution of income and wealth becomes more and more unequal, then you would expect the tax-and-welfare to respond by becoming more redistributive, so whatever degree of household consumption equality, social inclusion, etc is considered optimal is maintained.
In my line of work, we’re getting warning from suppliers of 5-10% cost increases. I’ve been preparing budget numbers for existing contracts to warn builder/owners of cost increases. All of this is going to get passed to the tenets in long term, increasing the sort of their lease. Our place in it is fairly minimal due to our trade but you get into steel work, misc metals, interior furnishings and appliances, etc and it adds up. The person ultimately paying for it is the person signing the lease; the suppliers, builders and certainly not overseas nations aren’t taking the hit.