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.).
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.
Which, of course, suggests either they are stupid or not taking these actions for the reasons they're saying. I'm wagering both.
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.
That's what the american people seem to want to happen.
I'm American, and 50.2% of Americans did not vote for this.
Realistically, it will not be that bad. Most companies will just up prices to make up the cost of the tariff and consumers will eat it.
In all fairness, a good portion of the other 49.8% probably didn't vote for this (or didn't know they were voting for it) either.
That's WORSE than if you were just stupid or hateful. You chose to be willfully ignorant of something that was utterly trivial to check.
They voted for it.
Unfortunately, the taxes in question are also targeting imports from Canada and Mexico, two countries that are firmly in the US sphere of influence, and the beneficiaries of these new taxes will be countries in SEA which are increasingly in China's sphere of influence. This is a geopolitical own-goal from an administration with no coherent strategy.
It is a negotiation tactic with those two countries. It is meant to get changes on issues like border security, but also fairness given existing tariffs are often unbalanced. But also, there are a lot of imports from those countries that are basically Chinese tariff evasion.
It is an incoherent and amateur negotiation tactic. If the US can't secure the southern border on its own, what makes anyone think that Mexico is going to be able to do a better job at that? Naturally, we are ignoring for the moment that the majority of illegal immigration does not happen at the border in the first place. As for fairness, maybe Trump should have addressed that when he timidly rubber-stamped NAFTA 2 during his first term. And you're not going to beat "Chinese tax evasion" in this way without charging these taxes on every country on Earth.
These import taxes are performative posturing. Please stop trying to paint them as part of some brilliantly motivated campaign.
It does not seem like Canada wants to be 51 state nor it seems like Europe feels empowered after Trump started to support Putins expansion.
Grabbing territories by force or economic coercion seems like a despotic thing to do, doesn't it. Even threatening to do so would probably make people trust you less and be less likely to cooperate, I would think.
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?
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.
There is no way to recoup the cost there. This is just the largest single tax increase in US history.
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.