Comment by burnt-resistor | Hacker News Reader

Comment by burnt-resistor | Hacker News Reader

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> I do NOT expect an instant resurgence of manufacturing in the US.

It takes several years and lots of money. And investment ain't going to happen without both stability and demand. This merely allows domestic competitors to raise prices to encourage more inflation with a profit-price spiral. Aggregate demand will soften by virtue of increasing prices. Furthermore, trade deficits are stupid metrics to fixate on when fair value (cash and goods) flows in both directions. This is what happens when a stupid, ignorant person is surrounded by even more evil, greedier, manipulative advisors, anointed unitary executive, and allowed to legislate by fiat. (Trump isn't very dangerous or concerning by himself; it's the advisors plus the power given to him to rapidly rubber stamp special interest agendas that are concerning.)

if it would give domestic manufacturers such great pricing power, then wouldn’t it also encourage foreign manufacturers to manufacture in the US to take advantage of that pricing power? Wouldn’t that be a good thing for the US? and as more manufacturers move to the US, wouldn’t that competition then tend to lower prices?

>if it would give domestic manufacturers such great pricing power, then wouldn’t it also encourage foreign manufacturers to manufacture in the US to take advantage of that pricing power? Wouldn’t that be a good thing for the US? and as more manufacturers move to the US, wouldn’t that competition then tend to lower prices?

Moving manufacturing into the US takes a lot of up-front investment and would take a long time to pay off. It could happen if the manufacturers believe that the pricing pressure is going to remain present for the time that it takes to pay off. This is what's meant by 'business wants to see stability'. The current administration has shown the opposite of that, with a chaotic series of rules which don't appear to be well thought through, or likely to stick, so it's mostly achieving the worst of both worlds.

(A similar thing is true of defense spending: if the government is commissioning some manufacturing for which it is the only buyer, and it has demonstrated that the amount that it actually buys is liable to fluctuate wildly in the name of 'cost savings', then the price it pays per unit is going to reflect the risk that the business which is setting up that manufacturing doesn't actually sell as many as promised)

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