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Comment by mothballed | Hacker News Reader

I think people way underestimate just how badly the US fucked themselves with the tariff regimes, amongst other reasons.

The way US workers survive in a high-skill economy is having complex, internationally supplied machines/services/trade.

People think what will happen is more stuff made in US, but then that room sized CNC milling machine you ordered from Germany so you can actually operate a US company suddenly has a massive tariff bill and now you have to fire 3 guys to pay the bank for that. And people are buying less of your stuff because they're already spending more money on all their other goods, either because of tariffs or because it's now made by people with less comparative advantage.

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I can't say if it is true, but I know of some small businesses who were essentially put out of business / had it all dry up when tariffs hit. They're not dead as an org, but they're not working / not paying anyone ...

My friends in the midwest say that there's actually exemptions on tariffs when it comes to buying the manufacturing equipment itself, to avoid the issues you're talking about. I think generally it's also a good thing that Americans are buying less - statistically, more stuff is made overseas than domestically. Those same friends expect purchase amounts to increase once America starts producing more on its own.

Big if on that last sentence.

Indeed. With the future of the tariffs in some question with the upcoming SCOTUS case, why would any business choose to invest in manufacturing here when the barriers might be gone in a few months (or mid-next year if SCOTUS slow rolls a decision until the end of their session)?

Or tomorrow since Trump has gone back and forth on specific tariffs

> My friends in the midwest say that there's actually exemptions on tariffs when it comes to buying the manufacturing equipment itself, to avoid the issues you're talking about.

This is a massive hand-wave and only applies to companies that have an in with the administration. If you're a small/medium-size business that doesn't have a budget for "government relations," or you're in a field like renewable energy or EVs where the admin doesn't like the vibes? Too bad for you.

> Those same friends expect purchase amounts to increase once America starts producing more on its own.

Yes they will, and aggregate output will decrease because producers are now spending more money on worse domestic substitutes for foreign products. Also, you're now shoveling corporate welfare to those new domestic producers, so they have no incentive to step up their game and innovate. (If you want an example of this look at the consistent failure of US automakers to compete globally, because tariffs incentivize them to optimize for building pickup trucks domestically.)

Import substitution has been tried many times before, it doesn't work.

Customs has detailed processes that track cars etc that travel back and forth a few times as parts are added that tracks the value add/country made in this production process - it adds cost and often the new tariffs are quite large and must be paid on the spot and brokerage process is far more detailed = adds fees$$

I really liked Ronald Reagan's comments on tariffs and fair trade from way back. Good reading in these times.

https://www.reaganlibrary.gov/archives/speech/radio-address-...

Hell, even the Heritage Foundation thought NAFTA was a good idea instead of tariffs:

https://www.heritage.org/trade/report/the-north-american-fre...

There's a lot I read about in 2025, but I do not recall anything about tarriff policy. This one is all on Trump and "Ron Vaara".

Adam Smith wrote about it at length so it’s been known since before economics became a field of study

I enjoyed Bastiat's indictment

http://bastiat.org/en/petition.html

  The question, and we pose it formally, is whether what you desire for France is the benefit of consumption free of charge or the alleged advantages of onerous production. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!

Can you help me understand your last point? As far as I'm aware the end goal is Americans producing for Americans. To reference your point, smaller European cars aren't built for the unique, rugged American terrain, as well as the massive distances that Americans drive every day. I'm not sure where innovation could come from by building towards a European market.

> smaller European cars aren't built for the unique, rugged American terrain

I’m not sure if you’ve driven in the US, but we have paved roads here, too! And an excellent interstate highway system! Driving around the unique, rugged American terrain is left for car commercials and a very small percentage of Americans.

What unique, rugged terrain? The vast, vast majority of drivers are driving 100% on paved roads. Under which circumstances are the rare exceptions not properly served by existing off-road products?

"smaller European cars aren't built for the unique, rugged American terrain, as well as the massive distances that Americans drive every day. "

They're not all hicks waving submachine guns with a beer in the other hand standing on the back of a Ranchero driving over sand dunes after fleeing mexican families.

And, the typical stereotype of "European cars are all small." Oh, boy.

Every heard of Chelsea Tractors?

Tariffs are all political bluster and theater anyway. The more I researched the realities of tariffs on the ground, the more I realized that international trade is a giant grift for everyone.

No one is honest about what is in those shipping containers (and no one wants to check). The longshoremen and their unions are corrupt AF and shouldn't even exist, let alone make more than google engineers. No one is honest about reporting what their goods are on customs forms. As of last time I checked, effective tariffs on GPUs and other important semis was actually slightly lower than under Biden. Not defending Trump but saying that what the executive says and what actually happens are different universes in regards to trade.

Oh and BTW, there's a whole parallel court system related to trade in the USA which does all the boring work of adjudication related to implementation of trade. No normie knows these guys exist and they are the reason that you can safely ignore whatever nonsense percentage trump says outloud next.

https://en.wikipedia.org/wiki/United_States_Court_of_Interna...

also

https://en.wikipedia.org/wiki/United_States_International_Tr...

Also I buy a lot of clothes which are "made overseas" (Bronsen, soso, unbranded brand) which seems to have dodged the tariffs (Bronsen prices didn't even go up and they're made in china!!!) or made in the USA/Canada but with overseas material, i.e. Naked and Famous. In theory my clothes prices should have doubled or more. In practice almost nothing happened.

Longshoremen absolutely deserve more than Google engineers, of this I'm completely certain

They probably do, but after their little stunt where their mafia boss, whoops, I mean union representative went on TV bragging he would "cripple" the economy -- all the while talking about how broke he is while wearing a rolex and gawdy gold chain -- yeah I'm not terribly surprised the common American has grown to absolutely hate the longshoreman union.

Maybe the average American needs to be reminded who handles all their treats from China. Perhaps with a strike that could cripple the economy.

I'm in the Midwest and your friends don't know what they're talking about. Hazarding a guess, they assume things will just work because their team is in power. Most people on both sides are in denial about the situation, frankly.

But hey, maybe 30 years from now, your friends will be right about America producing more.

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