Originally Posted by
gimmick
Large majority of your production is automated. Everything you could move overseas you moved overseas. There's a lot of products where it would cost 2-10 times as much to produce in US than have it shipped in. 25% bump in production cost is nothing in that scale.
Traditional theory of tariffs is basically doing work when domestic product costs a 100 while imported cost 90. When you slap a 25% tariff there the consumer will now gravitate towards domestic. Here domestic products either don't exist anymore or they cost 500. As such the consumer still buys the imported product, it just costs more now.
Because bulk of this is branded products there's a layer of marketing that also protects the products from price increases. They have differentiated themselves from their base category, so they have very little competition left. Nike's aren't shoes anymore, they are Nike's. This is even more true of Apple. Both of those are in the 300b that's left.
i'm not an expert on the subject, but everything i'm reading suggests that the american manufacturing position versus the chinese isn't quite as dire.
trump always touts how jobs are coming back to the US, and after doing a little digging, it looks like he's correct. american manufacturing has actually surged in the past decade (obv including time under obama).
https://www.forbes.com/sites/jimvino.../#3d8fb3a57589
not only that, but people think america is
already winning the trade war with china. what's worse for democrats is that some economists think this is directly tied to trump.
China Is Losing The Trade War In Nearly Every Way "If you need any evidence how the trade spat is impacting a country’s economic health then look no further than China trade. The lower export number means lower jobs, which means another direct impact on the (Chinese) economy. Donald Trump can be pleased. His policies have brought China to its knees.”
https://www.forbes.com/sites/kenrapo.../#1dcf958e7f03
damn. (this article notes that the one advantage china has which is what i've been saying -- it's a communist government that can potentially outlast fickle american voters.)
even the costs of doing business in china have gone up, especially property costs. combined with increased shipping costs, some companies have already determined that they save money by manufacturing in the US. this helps explain why chinese exports to the US fell 3.7%, which is the first time that happened (non seasonally) since 2016. "Contrary to widespread belief, China isn’t the cheap place to manufacture that it once was, and rising costs have been forcing manufacturers to explore new countries to make their goods."
even the chinese, themselves, have begun opening manufacturing plants in the US as
it's cheaper to do so than in china.
Chinese manufacturers are setting up shop in the U.S. https://money.cnn.com/2016/11/30/tec...ica/index.html
in fairness, that article notes, like you said, that certain labor-intensive industries are not likely to come to the US. and even that american workers don't have those same skills anymore, which supports one of your main points.
i don't know. i still question whether tariffs are viable (or even necessary considering these articles), but we'll have to see.
sidenote -- i swear to god in the AOC thread i said that tariffs don't work so i'm clearly talking out of my ass and am likely to change my opinion tomorrow. classic blake.