Tariffs result in 10% laptop price hike in U.S. says Acer CEO

> There is a reason why rich prefer tariffs over a progressive income tax.

Or sales taxes, or VAT, for that matter.

Curious that it's rarely mentioned where the tariff collections go. Presumably into the federal budget?

In a progressive tax system, the poor end up paying a lot of the taxes of the rich, because the rich tend to own businesses and real estate and they just pass all their income taxes onto the poor in the form of price increases.

If you are a middle class person with a salary in the US you are likely paying upwards of 80% in taxes if you include second- and third-order taxes.

Your rent could be $1000 instead of $2000 if your landlord's income wasn't taxed so much. Your Chipotle meal could be $6 instead of $12 if the franchise owner and their commercial property landlord weren't taxed so much, let alone the workers.

This is why their plan to eliminate income tax and make up the difference with tariffs is just hilariously evil. It's literally shifting tax burden from rich to poor.

There are other mechanisms than revenue generation at play. That's not to say I'm supporting the tariff, but people who don't want to pay income taxes will support just about any other model regardless of the other effects.

Maybe I'm alone in this, but despite being able to afford to, I'm just not going to be buying as much non-essential stuff to avoid funding these tariffs.

The stocks of wealthy people aren't going to see great performance either when margins and sale volume are lowered by the increases in input costs.

> Upper income people will be fine with a 10-25% increase in cost of things they purchase. Regular income taxes are progressive.

This is assuming you are buying goods that are outside of the country. Most consumption weekly is things like food, drink, disposable items and not things like computer hardware which is refreshed every few years normally.

> There is a reason why rich prefer tariffs over a progressive income tax.

I am not rich and would prefer Tariffs over income taxes (I am in the UK). I would rather save the that gets taken every month from the taxman and I could afford to buy myself a nicer property. I could also make the conscious decision to make sure I purchase items produced in the UK which presumably for food, drink (at least) I would wager is produced in the UK and thus would be cheaper than things produced outside of the country.

As for progressive taxes they actually make it more difficult to earn more money even at a near minimum wage. When I worked at a super store (Tesco) many years ago, If I worked a few hours overtime, I would go over income band for that month and it effectively made working that shift a waste of time. I am including my time to commute which was a 30 minute cycle and not wanting to have to stack onions. So I didn't bother working overtime as a result. Neither did many of my colleges. Granted I normally would get a check back at the end of the year from HMRC as I would have over-payed for the year, but when you are living month to month, I would always prefer the cash in my pocket as the end of the tax year is an eternity away in comparison.

It’s an extremely regressive tax policy too. Not only is it a flat rate for everyone regardless of income, the wealthy spend less as a percent of income than the poor, so less of the income is taxed this way in the first place.

Why would rich people prefer tariffs? Only very specific rich people who know how a trade war is going to unfold want tariffs.

The rich favor free trade. It effectively allows them to outsource production to cheap foreign labor and increase their domestic profits. You’re incorrectly assuming a static system where production doesn’t shift to domestic sources.

Yes, tariffs increase prices somewhat for consumers. But they encourage domestic production and domestic jobs. Ask yourself—are Americans better from importing cheap Chinese crap than they were in the 1960s when stuff was made in America?

Not to challenge the notion of tax but to seek an answer: what would be a better solution to the deindustrialization of the US then? China has 350X of the shipping building capacity than the US. We couldn't even produce masks fast enough so we had to buy BYD's during the Covid. GM's factory looked like a WII-era run-down workshop compared to BYD's fully-automated factory. DJI took more than 99% of the drone market. Another question how we deal with imbalanced tariffs, like China and Europe could place higher tariff on some products than we do to them.

What evidence is there that "the rich" like tariffs?

In theory, tariffs have the potential to bring back jobs to a highly industrialized nation like the US, benefitting the poor with more and better jobs. Income tax can't do that.

this is also why states that don't have a sales tax, like Oregon, have a more equitable tax structure

Progressive taxes are usually one of the worst and attacks the success, it limits poor people to become middle-class earners, or middle class to get wealthy.

Taxes are already a certain percent. It doesn't make any sense to tax more or less percent to people over certain amount of money.

At the end, poor people dont want to work because they will lose all benefits and get taxed. Middle class people don't want to earn more than certain amount because they will get taxed more.

Because progressive taxes are reliant on certain income (value) or wealth, inflation makes people to pay more taxes over time.

Much of this I assume is due to labor costs. We're already seeing some basic techs start to return back to higher-tech, higher-labor-cost countries (like the US Gulf Coast) because of automation improvements. So now things that have historically been low-hanging fruit for countries trying to industrialize (and therefore able to provide the labor cheaply) are being taken away from them, because now one systems engineer can oversee, say, an entire textiles or smelting or wiring facility. It's only a matter of time until this bleeds further up the ladder, in my opinion, and electronics isn't too far up the ladder from wiring.

Its true that one purpose of a tariff is to protect domestic production. Another purpose is to hurt specific trading partners; when we impose an xx% tariff on China, companies who were previously importing goods from China may domesticate some production, but they may also just turn to e.g. Vietnam or Japan. A further third reason for tariffs is simply as a bargaining tool, as we've seen with Canada recently.

Sometimes you can tell what the real purpose of the tariff is based on what is being tariffed, and from who. For example, putting a tariff on Canadian energy: Canada is an ally of the United States who we generally don't have geopolitical interest in fighting with, and the United States has very, very strong domestic energy production and domestic energy consumption; so, the purpose is less about harming Canada, and more-so about protecting the domestic industry from being undercut by international partners. However, when it comes to electronics and microchips, we don't have the domestic production capacity, so the purpose is more aligned with: Yeah, we'll try to build that up, but we're most concerned about simply weakening China. If that production were to instead get built up in Vietnam or Japan because labor is cheaper, we'd have to see how the administration would react, but I suspect: there's a reason why we haven't levied similar tariffs against them.

This is why tariffs only work in cases where you already have a strong local production that you're trying to protect (Japanese rice farmers, Florida orange growers) or where you want to force foreign companies to set up factories locally (Toyota, TSMC, etc.) but the latter only works for really high volume and high revenue items.

It does _not_ work to resuscitate long-dead manufacturing industries.

You're telling me that domestic chip fabs didn't just pop out of the ground?

Tariffs protect domestic companies against competition from more innovative foreign companies. Because they remove incentives for domestic companies to improve their products or reduce their prices, tariffs gradually reduce the competitiveness of domestic firms; the longer and higher the tariffs, the more likely domestic industries are to turn into rent extractors, only able to sell their products because foreign competition has been handicapped.

If a country wants to have globally competitive, innovative companies, that is not compatible with tariffs.

Reagan put tariffs on Harley Davidsons and steel in the 1980s.

These gave HD a little breathing room to restructure which helped them to bounce back (for maybe 30 years), but couldn't cure the natural limits of selling a nonessential vehicle for over $20k to middle-aged men who bought a hog only to fulfill their bucket list.

But Steel didn't benefit as much as HD, since the economics of pivoting giant ossified corporations like USX take decades -- especially when hampered by old men in gray flannel suits and self-destructive unions that had no idea how unsupportable their benefits already were.

The question remains whether tariffs really accomplish anything lasting, other than attract votes in the short term, for re-election.

Same deal in Australia. We had tariff walls up until the early 1990's. The trajectory of the economy was plainly obvious it triggering a speech by the then treasurer saying Australia was at risk of becoming a "banana republic". They then went about a wholesale re-arrangement of Australia's economy. They did a lot of things, but the major one was tearing down the tariffs. During the re-arrangement a lot of people lost their jobs, and it triggered a major recession. It was a painful time.

But that was the last recession we had. It's been 30 years of growth thereafter.

I suspect the younger Australians have forgotten the lesson, but it the word "tariff" still frightens my generation. In the USA, you have no one who has lived through tariff's for near a century (Smoot-Hawley in 1930). The economists and academics will be advising anyone who would listen what the effect of rasing tariff walls would be, and it seems like the USA politic did a reasonable job of listening to them for the last 40 years or so. But now the current mob running the place got there by championing not listening to elites.

It's time to re-learn the lesson, I guess.

You're not missing anything. This is how every company has taken advantage of rising inflation and now tariffs.

Yeah exactly, companies just have to say the price increase is due to tariffs and increase their margins. That's exactly what Acer CEO is doing here.

> So the company is making more profit from you now? What am I missing?

You are probably missing that what people pay for their computers is still a function of the market and competition. If everybody goes up with their prices by exactly 10%, then maybe it would play out like that. Most likely though there are segments of the market where prices matter a lot to the customer and they won't be able to increase their margins. On the top of the line products it might be possible. On average I think they might slightly improve their margins, but it might also just be a wash.

That's the same percentage profit. And there would likely be some reduction in sales due to the increased price, so the absolute profit wouldn't increase as much as you suggest. Obviously lots of other factors involved.

Yes. Most companies target a profit percentage, not a fixed amount. So if their costs go up, their profits go up. But since everyone does it, they end up still being competitive in the market.

The demand side.

Less laptops will be bought even if profit per laptop goes up overall profits will go down. Money is finite and these are durable goods. People will now look at other options like the second hand market.

The value of the product when calculating tariffs isn't necessarily the manufacturing cost, it could also be the "market value". I tried to find a source for how to calculate the value on a complete laptop but a quick search failed me.

But, for example, when bringing wine into Ontario Canada, the duty is calculated on what the Ontario Liquor Board would sell the bottle for, not on what I pay for it. This isn't the US of course, but it gives you an example that tariffs are not always paid on manufacturing costs.

They would only hike the price by $50, not just blanket 10% for no reason.

The CEO called out 10% because the tariffs themselves are higher % of COGS.

We saw this throughout the pandemic.

Companies used the very real inflationary pressures to increase the cost of their products well beyond what those inflationary pressures alone would require.

There are 2 reasons IMO that led to this working:

1. If every company does it, the normal competitive market pressures to reduce prices don't operate. Normally, every company will only raise prices due to collusion, which would be illegal. But when there's a broad based increase in cost, every company will also raise prices beyond just the absolute values of those costs independently, because companies are judged by their margins more than they are by absolute numbers. This is not illegal but the effect is the same.

If in your example, Acer sells 1000 laptops, they originally made $1mm in revenues, with $500k in costs, leading to $500k in gross profits and a gross profit margin of 50%.

If their costs increase by 50%, they need to increase their selling price by $100 to maintain those margins. $1.1mm revenue, with $550k costs, leading to $550k gross profits for a gross profit margin of 50%.

If, however, they increase their Selling price only by the cost, their new selling price will be $1050, for revenues of $1.05mm, costs of $550k, gross profits of $500k, but gross profit margins declining to $500/$1050 = ~47.6%.

The decline in gross profits will hurt their stock price and their valuations (if private) significantly.

2. Consumer pressure. The other reason companies do not easily increase prices with higher costs is negative publicity. Pandemic related inflation, and now tariffs, give them an easy way to explain the reason for the price increases to their consumers and avoid facing any backlash directly.

What did surprise me with the pandemic, which will likely be true with the tariff increases, is that once the companies did increase their selling prices after the pandemic, even though their costs then subsequently dropped, they did not drop prices, across the board.

And the result were the record breaking profits companies have been declaring.

They’re making more profit in absolute dollars, but the return on investment (ROI) is the same. ROI is what matters because investors trade cash for shares and seek a return on that cash.

For example, if you invest $1,000 and earn $100, your ROI is 10%. But if you invest $10,000 and earn $200, your ROI is only 2%, even though the dollar return is higher. Investors focus on percentage returns because they invest different amounts and receive profits proportional to their ownership.

Investors prefer higher percentage returns, even if the dollar amounts are smaller. For example, making ten separate investments that each return a smaller dollar amount but a higher percentage would be more attractive than one large investment with a lower ROI.

Lower ROI also comes with an opportunity cost. Capital tied up in a low-return investment can't be used for higher-return opportunities. Investors aim to allocate their money where it can generate the best possible return relative to the risk, rather than just chasing higher dollar profits.

In the example above Acer had to risk more capital and got the same percentage return on that capital.

Yes, they are likely making more per unit, but less profit in aggregate, since the increase in price means they will likely sell less laptops than before. The aggregate loss in value here is known as dead-weight loss.

Why do you assume their costs are going up the same percentage? It's not clear from the linked article, but maybe their costs per your example are going up 12% from 500 to 600, and they're only raising prices by 10% to 1100 to keep the same margin.

Of course I doubt this would actually be the case (because capitalism), but that's the one of the assumptions you're missing in your example.

> So the company is making more profit from you now? What am I missing?

Yes. The elasticity of Tariffs is historically >1.

Not every country is subject to the tariffs.

If apple assembles their MacBooks in Vietnam, they get a 10% discount relative to Acer laptops assembled in china

The catch is that it costs them more to acquire the laptops so (in theory) they can't acquire as many of them to sell if they start from the same amount of money. Which is ok on the surface, but makes them a worse investment because they return less money back to you for the same amount put in.

Ex. If they only have $1M to spend, the tariffs mean they can only buy ~1800 laptops to sell instead of 2000, so if the profit of $500 stayed the same then the company is making less money than it did before. If they instead bump the margin for each laptop to $550 then they make the same amount of money as before even though they're selling less laptops.

Of course in an actual version it's messier because the math doesn't work out that cleanly. If it costs $800 to make a laptop you sell for $1000 then it now costs 880 with a 10% tariff. To keep the 20% margin the new price would be $1056, only a 5% increase in the final price.

What you are missing is that they can't import the product for $500. They have to sell it to the "USA" for 1000 and pay 100 in tariffs. They can't "pocket" the profit in the USA. Look up https://en.wikipedia.org/wiki/Transfer_pricing

tariffs mean the company has to pay the county money sort of like an extortion fee. profit is still the same and the US gets the 10%.

The basics of pricing theory, that higher prices reduce demand.

You mean Dell, HP and Lenovo?

Heck, I could drive to the Lenovo plant on my lunch break...

Great news for System76; and great news for if the tariffs stick around. We could use more computers made in Colorado.

Only if we have a corresponding and equal subsidy to protect laptop buyers. :-)

For the low, low price of dooming Ukraine, rebooting Guantanamo Bay, and oppressing non-binary people :)

Ah yes. What would the ever-benevolent American corporations do if we stopped shielding them from competition?

We already know what they'll do from when the same thing happened to Japanese cars in the 60s... American companies will change nothing and then jack the prices up to just below tariff increases.

Or increasing taxes on the domestic industries that use steel and aluminum, in order to prop up the orders of magnitude smaller domestic steel and aluminum industries. The likely result will be a net loss of jobs and a net negative to GDP.

> I think we will see prices higher than the % increase in tariffs

Pretty much. Most consumers (and even a lot of purchasers) don't know about the individual tariff rates per good, so it's safe to assume that you can optimize pricing to maximize your margin where possible.

Beyond that, there's economies of scale that won't scale as far, based on lowered demand.

The vast majority of products at grocery stores are not imported from overseas. And even when they are, the cost of the good is only a part of the total cost to the store. For example no tariff would change the price of intra-USA transport of imported goods (well besides oil…). Labor and real estate need to taken out as well.

Obviously if you increase a cost the price is going to go up, but it’s not anywhere near 27% for groceries specifically.

Now pure imports, like most of the crap on Amazon or Temu, is another story.

Of course we will....

Inflation -> Sorry, gotta raise prices -> Profits increased

Interest Rates -> Sorry, gotta lay everyone off -> Profits increased

Tariffs -> Sorry, gotta raise prices again -> .....

About as well thought out as the Laffer curve.

> Are these even well thought out economic strategies?

Have any of Trump/Musk's actions in the past month seemed particularly well thought-out? It's sharp-elbowed bullying by people who will never see any consequences for their actions.

trump's logic is very simple:

1. make players in the room happy - tax cuts and deregulation

2. make his voters happy - tariffs and immigration control

3. enjoy the power - memecoin and cola button

and there are indeed some 'well thought out' economic strategies behind tarrifs

> "In theory, tariffs would be a shrinking ice cube. That you would tariff a country and then as the production comes back to the U.S. the income tax - the corporate revenues and the paid income tax - goes up and the tariff income would go down."

https://www.reuters.com/markets/us/treasury-secretary-bessen...

it is the strategy, as long as the US is building a laptop production industry in domestic

Also free of blame, since the increases can be labeled "Trump Tarif Surcharge".

Likely, none, zero, zilch. It will just cause inflation as it spreads across goods and domestic companies raise prices simply because they can.

The only way that a 10% tariff could bring jobs back would be if the difference between paying someone in the US to do it is less than 10% more than paying someone outside the US to do it. Otherwise it will still be profitable to do this outside the US, and this is just a tax hike on Americans, who don't generally seem to understand that tariffs are taxes.

Bringing it all back to North America isn't going to help much, since its almost impossible to locally source every single component that goes into a modern computing device. There there is the cost of labor.

Tariffs have various long term effects that are useful. One is shifting where that manufacturing is done and in the longer term it could bring it back, depending on the cost of doing it in a different, non China, country. But another long term effect is geopolitical - China is in a more difficult economic position than the US and tariffs will make it difficult for them to keep building their military and difficult to envision war. It will also weaken their authoritarian government, which has an interest in annexing Taiwan and also in undermining the US, Europe, and other free societies. The other benefits of tariffs matter - it isn’t just about the short term effects (of inflating costs or whatever).

> being more assembly jobs back to North America

Electronics Assembly jobs already exist in North America - but in Mexico.

They aren't going to bring assembly jobs back to the US, because electronics assembly is very low value and low margins.

> How much of a price hike can actually being more assembly jobs back to North America? Or are they already brought back?

And at what cost even if they did/do.

Washing machine tariffs resulted in a pass through cost greater than 100%. The employment effect (1800-2000 jobs) but the cost to the public of those jobs was $800,000+ each:

* https://www.aeaweb.org/articles?id=10.1257/aer.20190611

Prosperous America, a partisan think tank, thought this was generally positive:

* https://prosperousamerica.org/economic-view-tariff-jumping-i...

Looking at it from the "national security" perspective, they aren't exactly wrong:

> Democratic countries’ economies are mainly set up as free market economies with redistribution, because this is what maximizes living standards in peacetime. In a free market economy, if a foreign country wants to sell you cheap cars, you let them do it, and you allocate your own productive resources to something more profitable instead. If China is willing to sell you brand-new electric vehicles for $10,000, why should you turn them down? Just make B2B SaaS and advertising platforms and chat apps, sell them for a high profit margin, and drive a Chinese car.

> Except then a war comes, and suddenly you find that B2B SaaS and advertising platforms and chat apps aren’t very useful for defending your freedoms. Oops! The right time to worry about manufacturing would have been years before the war, except you weren’t able to anticipate and prepare for the future. Manufacturing doesn’t just support war — in a very real way, it’s a war in and of itself.

* https://www.noahpinion.blog/p/manufacturing-is-a-war-now

There's the old saying about WW2: The Allies won [against the Nazis] from British intelligence, Russian blood, and American steel. The silliness of the current situation is that American can't go it alone anymore, but allies are now being alienated.

So bringing back manufacturing jobs wouldn't be a bad thing, but what do you have to do to accomplish it? If China is designated as a 'country of concern' ("enemy"), perhaps target them, but why 'go after' your nominal friends?

Higher tariffs won't do it alone. Time is needed, as well. The current tariffs are likely seen as temporary.

If you start a factory to produce on shore, you would have to recoup capital costs off the margin available due to undercutting offshore factories while tariffs are higher.

When the administration or whims change, the tariffs go away and your factory loses that margin and isn't as profitable.

Would IMO need significantly more tariffs to effect significant shifts (and, even more importantly, some certainty that those tariffs are going to stick for the next decades, which is hard to provide).

Chinese mean manufacturing wage is ~$25k/year (purchasing parity adjusted, $15k unadjusted, for an average 49h/week of work). If you want domestic products to be competitive, you basically need the difference paid by consumers/taxpayers in tariffs or subsidies.

I don't think current tariff level is going to move lots of manufacturing jobs into the US (and I would personally argue that most Americans don't even want those jobs as they are currently). Instead, I'd expect a slow shift towards countries with favorable local wage/tariff combination (India, Vietnam, etc.).

As others here have said, an increase of only 10% or 20% will do nothing, not even motivate other countries to blink. They'll just reciprocate with tariffs of their own which will add inflation across even more products. To motivate structural change, you'd need tariffs of 100% to 500% -- forcing a new business model.

The real objective of Trump's mindless minions (e.g. Musk) is to create bragging points that will motivate bloviate-receptive voters to believe something was done by the administration to 'fix' problems, thereby increasing support for the party without actually doing anything useful.

What drove labour intensive assembly jobs away from the USA was wages that are a fraction of what the USA has, and correspondingly lower standing of living.

If sustained long enough tariffs will fix that. Costs will rise in the USA, exports will drop because the price of everything made in the USA will go up, the dollar will then drop, living standards will drop, and eventually comparative wages will start to approach those in Asia. Once that happens, assembly jobs will naturally migrate back to the USA.

The USA has avoided that outcome for years by manufacturing very high margin products. Think Intel, SpaceX, vaccines, and the software giants like Microsoft, Google and Meta. That came at the cost of bifurcation of the economy, with tech sector jobs paying outlandish wages compared to what someone manufacturing a car could get. It seems that pissed so many people off they elected Trump.

Trump probably thinks is the fix, but changing is coming no matter who is in power. As China, India in particular, now even those "high brain power" jobs are under price stress. Chip manufacturing has almost gone, the software companies are paying 1/4 or 1/10 the price of engineering talent by hiring overseas, India has become the pharmaceutical manufacturing powerhouse of the world.

So you don't need lower tariffs to fix it. The fix is coming regardless of who you vote for. All tariffs will do is accelerate the process. But if there is one process you didn't want accelerated, it's this one.

It's not all doom and gloom. Look to Canada, Australia and Europe to see what the final outcome will be like. It's not so bad, is it? You probably don't want to end up like the Britain, as that would mean a few rich with most of the USA ending up at the living standard of Mississippi.

You have a source for this claim of that plan?

> Is VAT a better system? Arguably, yes—given that the majority of countries worldwide have adopted it as their preferred taxation model

Most VAT countries I know that are not Saudi Arabia have VAT and income tax.

In the case of VAT, it applies equally to national and foreign companies.

Import duties aren't imposed by an orange man.

VAT is categorically different--it is applied to both domestically and foreign produced goods.

I believe import duties are similar to tariffs, and open to criticism on the same grounds.

VAT is what Americans call sales tax (yes I know it's slightly different, but not for the purposes of this discussion). Imported goods into the US are subject to sales tax too, if the sate where the buyer lives has sales tax. Quite amazing that people on HN are swallowing the disinformation on this.

VAT is a sales tax. Tariffs are a sales tax.

But while VAT is an "honest" sales tax (meaning it's transparent to users), tariffs is a "dishonest" sales tax (consumers don't realize they're being taxed).

The problem is that Trump is telling voters that he is _decreasing_ their taxes, whereas he's actually _increasing_ them.

I know it's often heresy on HN, but I've found Macbooks to be fairly reliable. I've used my Macbook air for a decade now at this point - first as a Mac and later switching to Ubuntu.

I'm very happy with my Acer Aspire Nitro 5. It was cheap. And it looks cheap. It's mostly plastic. And it'll slightly bend if you carry it on one edge. Plus I took it apart once to upgrade the internal SSD. But it has survived 3 years of frequent travel including 10+ international flights. I run Pop!OS on it so that it's all encrypted in case I ever lose it. And a Syncthing daemon in the background to securely backup all of its data.

Framework? Or do you need something mainstream?

How is this relevant to the article? I had a look at my Thinkpad T42 and X201 and both were manufactured in China. I looked up a picture of the T40's bottom case and it was manufactured in China as well. I think the differences in durability you're noticing are more because the majority of laptop buyers value the laptop being thin and light over being durable, so companies moved their product lines to suit these tastes. In fact, you seem to be a part of that segment. If you really value the laptop being durable over all else, why did you buy a Samsung ultrabook, a Dell XPS, and a MacBook (all thin-and-light ultraportable laptops) instead of a current generation T or P series ThinkPad or a Panasonic Toughbook?

Helping Mexico build a wall on it's southern border will certainly help reduce the number of Venezuelan and Guatemalan immigrants entering Mexico or the USA.

The irony is that build a wall and have Mexico pay for it makes a degree of sense. As long as we are talking about the MEXICAN southern border.

The dumbass in charge cannot figure this one out though, as diplomacy and discussion is beyond their abilities.

-------

Biden was making a degree of progress here. Mexico wants fewer firearms leaving Texas into the hands of Mexican gangs. But otherwise seemed open to the idea of we could cover more cross border issues. I don't believe we can create tighter gun control regime in Texas though, but these are the kinds of things Mexico wants.

Discussion to find a more politically realistic exchange is the point of diplomacy. Maybe we never find anything, but the hope of a mutually beneficial solution is closer than you might think.

Did that just last week. $200 off at lots of places until February 25, IIRC.

> United States became extremely self sufficient and eventually produced the cheapest products in the world

100 years ago

> a strong manufacturing base

if the US had a strong manufacturing base, your argument would be relevant to today

The time when tariffs would have worked would have been around the time that China was trying to build up its manufacturing capabilities, as it would have made it more attractive for US companies to keep their manufacturing onshore instead of offshore. That time is long long gone.

Whose actions?

I'm skeptical of tariffs in general, but it seems like there's a clear strategic case for tariffs on a country whose market may become unavailable entirely when they begin their long-promised invasion of their neighbor.

I'll believe it when he institutes a national Land Value Tax

I'm afraid building stuff locally will mean significantly more than 20% premium. Not sure if even double is the right price range increase.

You and virtually nobody else. Hell, I’m not even convinced you would given the option.

It won't be a 20% premium. More like 100%+.

The Librem 5 USA phone is made in the US, and costs $1600. That might seem reasonable compared to the $1000 iPhone 16 Pro, but if you look at the spec sheet it's clear that it's closer to a $100 phone than a flagship. That's not a 20% premium, that's over 1000% premium.

https://puri.sm/products/librem-5-usa/

I worked for a company that sourced all custom built assembly parts with-in the US state it was started in. PCBs and enclosures. After Texas VCs bought they company, they shipped it all overseas to Asia. Those proud patriots did anything they could to save a buck and maximize their own profits.

This year I learned they are maximizing their profits again and close in the branch that handles assembly and shipping. Moving to a more economic location to save a buck.

Your ideology goes against the nature of greed for those that have money and use it to maximize their own profits and harming those that help start and drive the business.

Even customer service as outsource to Asia.

It's actually funny how I feel the opposite right now since a few months ago. And I'm not saying one way is wrong, the other way is right, but it's funny how quickly one can be polarized (me in this scenario) in a very short period of time.

1. I dont think this is true.

2. 20% isnt close to enough of a premium to manufacture in the US.

Don't worry...The tariffs are only on Acer \s

For the vast majority of laptops that aren't made by Apple all profit margins are entirely erased (and then some) by these tariffs. So yeah the manufacturers could eat the cost... as long as they don't mind losing money on every sale.

Are you saying, if the supplier's cost goes up by 10-25% due , they should absorb it, and sell the product at the old price? Is that what you would do if you were building a product to sell?

If they currently have a 5% margin and their costs go up, they either

1) Go bust

2) Increase prices

This isn't a situation where supply is constrained (say in housing), where you will charge the same no matter the costs. If you charge too much then a competitor will increase supply and undercut you and you lose business.

Tarrifs means that your competitor can't undercut you, until it becomes cheaper to build entirely in the US, which will me far higher tarrifs and far higher prices that the end consumer pays.

Market forces work both ways.

> I have no doubt they will argue the price increase as a result of tariffs, but market prices are and will always be about what the market will tolerate and rarely nothing else.

Only in a market where sellers (either a single seller or a cartel) exercise monopoly power; in a competitive market, market clearing costs are driven down toward zero economic profit by competitive pressure.