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Comment by linuxftw | Hacker News Reader

This is why tariffs matter. Despite the US having much higher wages, and likely property and infrastructure costs, manufacturing is only 5-20% more for these high tech products.

Corporations outsourced not because they couldn't compete, but because why leave 10% on the table when we can reward the executives with that cash instead of the labor?

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These plants have nothing to do with tariffs though? They were in development prior to any tariffs and were partially funded by the CHIPS act. If anything, that’s the opposite of tariffs…

My point is, the cost of goods being produced in the US is not dramatically higher, as outlined in the article. Even very basic tariffs would level the playing field and bring economic benefits domestically, without a major impact to the consumer.

That assumes you have the means to bring the production domestically first.

This is a confluence of the previous administration having the forethought to do this, before the current administration tried to kill the CHIPS act.

If they hadn’t done that, you likely wouldn’t have seen domestic production able to satisfy the needs.

Tariffs alone are a misguided cudgel.

Also your comment about a “major impact to the consumer” ignores that this is an increase in cost just for the silicon. There’s a lot of tariffs on different parts of the actual product.

Context is important here: a 20% increase in price to consumer is not going to be perceived as "not dramatically higher". Focusing on tech for a moment, we are discussing this in the context of a good that normally decreases in price annually suddenly getting more expensive.

For the sake of argument, if all goods increase in price by 20%, Americans are going to have the experience of being worse off than they were before.

This is the largest tax hike on Americans in modern times (possibly ever?). While it may take a while for people to understand the impact of policy, people generally do not like large tax hikes. I don't think it's a stretch to think people will not like this tax increase, either.

Tariffs don't work to bring manufacturing back home if they change every 2 weeks and are sure to disappear in 4 years

You need to have reasonable certainty that your factory is going to be profitable on a 20+ year horizon to commit into building a production line.

I don't understand how MAGAs don't get that.

You think a CPU factory won’t be profitable for 20 years? MAGA movement won’t listen to you here if we can’t even agree on basic facts.

The thought took a shortcut. Profitable wasn't the right word

When you offshore a production facility, it's not about being profitable, it's that it can be more profitable elsewhere.

If you have no guarantee that the tariffs will still be there to artificially maintain your profitability so high, then you don't build.

I think we can agree on the facts there

A CPU factory may (because of high margins), but, for example, a car factory may not. A factory isn't just the labour, it also requires inputs, and tariffs that change weekly means that you can't rely on being able to source the inputs reliably. When your margins are smaller, random input costs can easily sink you.

If you want to bring back manufacturing you need to consider the entire supply chain, and make sure that inputs for whatever factory you are bringing in are secure and will be equal or cheaper in 20 years. These things need to be predictable.

Also, let's not pretend the MAGA movement listens to anything other than the propaganda.

My son-in-law works for a domestic truck manufacturer (semis, not pickups). Orders are down because nobody knows how much the order will cost, because of tariff uncertainty.

Yes, nothing kills business activity more than uncertainty. High prices can be planned for and dealt with. Constantly fluctuating ones with no upper bound cannot.

And lower activity creates more uncertainty, as people get laid off, banks start adjusting mortgage rates upwards and borrowing becomes more expensive. Leading to even less activity and more uncertainty. It's a scary road to go down toying with this house of cards at the level Trump has been doing.

When Biden came into office, he kept MOST of Trump's tariffs on China and even added a bunch of his own.

Despite the marketing, the tariffs are fairly bi-partisan among the congress.

The ones on Chinese EVs to protect the local car industry maybe, the blanket 10% he puts on your allies and the 25% if the allies are too woke maybe not.

Reciprocal tariffs have been something many people (on both sides of the isle) have been wishing for forever... It's not normally a D vs. R thing, except right now where the D's feel a need to play the opposition role.

On the other hand... most of the tariffs you hear about aren't real and never had/will-have an impact, and are clearly being weaponized as a way to get trading partners in-line. Few actual tariffs have been realized as-of yet... but if you read the news you'd be led to believe everything you buy is tariffed all to hell.

"Tariffs won't work because we won't actually use them" is not an argument against tariffs, that's an argument against corporate control of the economic levers.

> and are sure to disappear in 4 years

I wouldn't be so sure about that. The Biden Admin left in-place a lot of Trump foreign policy, and Democrats (the likely next admin-party) have been wishing for tariffs for years. Currently they're playing their part as the "opposition" but I'd bet money most of the tariffs stay during the next admin.

Your point about changing every 2 weeks is sound, however.

Same thing with Nokia. They still had factories in Finland in the 2010s. They were profitable, but margins were better on the factories in Asia.

Blaming tariffs when it was the greed of Wall Street, private equity, hedge funds, "corporate raiders" that ultimately shipped manufacturing overseas. All of this under decades of psuedo-economic theory called neoclassical economics. Then this is taken further under neoliberal economic policy — "reagonomics" and "trickle down economics".

These greedy fucks in the 1970s sold out current generations so they could min/max profit for themselves and billionaire buddies. All of this at the expense of decimating: local manufacturing industries, environment, public safety nets, and sustainable living.

I'm assigning blame to the greedy corporations. If consumers have $100 to spend on an item, corporations can either make it domestically for $90, or move production overseas and make it for $80. The consumer is going to pay $100 in either scenario. Lowering the tariffs ensured that the products would be made overseas so the executives can profit on the slave labor.

I'm not attempting to assign blame to one political party or another. Reasonable tariffs to protect domestic labor should be a bi-partisan issue.

>it was the greed of Wall Street, private equity, hedge funds, "corporate raiders" that ultimately shipped manufacturing overseas

Let's call a spade a spade: it was the greed of AMERICAN WORKERS that shipped manufacturing overseas. Wall Street, private equity, hedge funds, "corporate raiders" has almost nothing to do with it.

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