More tariffs insights from Fstoppers, Northrup and TheVerge
In the video above from Fstoppers, you can clearly see the confusion over these tariffs. In fact, prices will go up on every item, including those made in the US, since everyone relies on parts and raw materials made in different countries. And no, the tariffs will not shift any significant amount of production to the US, as in most cases the tariffs would have to be many times higher to make local US production competitive.
And there are also two more problems:
- In most cases, there is no production network in the USA for goods that are currently manufactured in ASIA. And it would take many years to build such a network.
- I doubt that for you USA workers the ‘US dream’ is to get those ‘nice’ factory jobs from Vietnam, Bangladesh and other countries. Particularly when you already have a 4% unemployment rate…will you really go work in a sweater shop?
The Verge writes:
As for whether these tariffs could potentially encourage Big Tech to restart domestic manufacturing, it’s highly unlikely. Even with these tariffs in place, it’s still cheaper for these companies to manufacture devices like smartphones, laptops, and wearables overseas. And even if they did want to move some industry back home, that wouldn’t be possible overnight. The U.S. has lost a lot of its manufacturing capacity, particularly for consumer electronics, in the last few decades.
My MAGA readers pointed out that this is just part of a ‘super-smart’ negotiating tactic by Donald Trump. That may be, but still, a lot of damage has already been done by this super-smart tactic:
- Your 401k is reduced by 20%. If you have to dip into your savings now, you’re going to feel the pain.
- Since people’s savings have lost value, they will spend less to buy things, and that will slow down the economy.
- The economy and businesses hate unpredictability. So product releases will slow down, investment will fall… and the likelihood of a recession will increase.
- The rest of the world is annoyed by the US’s actions. They will try to turn their backs on the US.
Again, I know Trump’s arguments, and there are certainly some arguments in favor of tariffs (e.g. greater independence from China in certain important areas like semiconductors and other reasons). But I think global constructive co-operation is beneficial for everyone in the long run, for the US, for China and for the rest of the world, and yes… it will never be completely fair, that is an impossible task and it doesn’t have to be to grow the economy.
