Trump promised voters tariffs are a panacea for the economy, but Walmart finance chief John David Rainey warned they will be inflationary for customers.
Say you’re an businessman who’s been manufacturing in China. Excel shows that you can make the same product in America for less than the post-tariff cost. Sound good?
But you’re not stupid. You know the tariffs will end up wildly unpopular and fuck up the economy. A) Why keep producing when people won’t be able to afford your goods? And more importantly, you want to be left holding the bag with your shiny new American factory when the tariffs are repealed?
Oh for sure, I should have clarified that I was really speaking to the products that already have a US-based manufacturing presence and already have to compete with imports. Ramping up domestic production on things that aren’t already manufactured here because of the demented ramblings of a guy who (ostensibly) won’t be around in 4 years is just asking for your business to go under
The amount of money it would take to move manufacturing back to the US would cost billions and companies aren’t going to do that. They would have to pay to import (with tariffs, still) any raw materials that can’t be made or mined here. Companies are just going to move their manufacturing to Vietnam another SE Asian country (some are already doing it), where labor is still cheap. And labor here for manufacturing wouldn’t be cheap. The company would have to worry about unions, and this country does not like unions (or labor, for that matter).
I saw it explained best like this
Current imported price: $30
Current locally made price: $35
New imported price: $70
New locally made price: $69.99
Locally made still won’t happen.
Say you’re an businessman who’s been manufacturing in China. Excel shows that you can make the same product in America for less than the post-tariff cost. Sound good?
But you’re not stupid. You know the tariffs will end up wildly unpopular and fuck up the economy. A) Why keep producing when people won’t be able to afford your goods? And more importantly, you want to be left holding the bag with your shiny new American factory when the tariffs are repealed?
Oh for sure, I should have clarified that I was really speaking to the products that already have a US-based manufacturing presence and already have to compete with imports. Ramping up domestic production on things that aren’t already manufactured here because of the demented ramblings of a guy who (ostensibly) won’t be around in 4 years is just asking for your business to go under
The amount of money it would take to move manufacturing back to the US would cost billions and companies aren’t going to do that. They would have to pay to import (with tariffs, still) any raw materials that can’t be made or mined here. Companies are just going to move their manufacturing to Vietnam another SE Asian country (some are already doing it), where labor is still cheap. And labor here for manufacturing wouldn’t be cheap. The company would have to worry about unions, and this country does not like unions (or labor, for that matter).