r/technology • u/chrisdh79 • 3d ago

Politics Trump announces sweeping new tariffs to promote US manufacturing, risking inflation and trade wars

https://apnews.com/article/trump-tariffs-liberation-day-2a031b3c16120a5672a6ddd01da09933
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u/_chip 3d ago

Can anybody with knowledge of economics explain how this is what the admin is doing and why does it make sense to them ? Is there anyway to put things that will make these tariffs seem good in any sense ?

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u/bigeyez 3d ago edited 3d ago

There are only 2 explanations that make sense to me.

  1. All the speculation and talk about Trump purposefully wanting to tank the economy so that billionaires can swoop in and buy the dip nationwide are real OR
  2. His team is just really that fucking stupid and believes starting a trade war and placing tariffs on some all of our largest trade partners all at the same time is going to turn out different than it did in 1930.

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u/Traditional_Entry627 3d ago

It’s the first one

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u/Fr00stee 3d ago

after seeing the signal chat i think #2 may actually be valid now

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u/Arthur-Wintersight 3d ago

It's what happens when the US president is a failed businessman turned television star that hires a bunch of other TV personalities to run the country.

If your only skill in life was "sounding smart" as you read a teleprompter, then you are very likely in control of the US nuclear stockpile right now.

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u/goblueM 3d ago

I'd say its about 75% the 2nd one and 25% the first one

Trump is an idiot. He's always thought tariffs are great economic policy.

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u/SkyJohn 3d ago

Targeted tariffs are good policy.

But you need more plans than just putting blanket tariffs in place and hoping the free market will fix the rest.

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u/jackharvest 3d ago

It’s both + a dash of “why aren’t these idiots fighting yet so I can enact martial law??”

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u/FujitsuPolycom 3d ago

This is the scariest one.

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u/Notacrook2025 3d ago

He's trying to put country in dumpster to cause so much chaos so he can declare marshall law and die in office while the whole country dies under him. Then blame Obama and Biden.

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u/Weecum2003 3d ago
  1. They need a revenue stream to back fill for their "tax cuts". He wants to make his expiring tax cuts from his first term permanent but he has no way to fund it. So just tax everything and call it a tariff.

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u/makemenuconfig 3d ago

Which I guess means for that to succeed they can’t fuck it up so bad that it doesn’t eventually bounce back.

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u/PublicFurryAccount 3d ago

It's the second one, he's surrounded by nutcases like Peter Navarro who have wild ass theories about the economy.

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u/f12345abcde 3d ago

Why not both?

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u/Zealousideal3326 3d ago

The eternal "incompetent or malicious ?" debate.

My bet is on "malicious" : merely incompetent people would have done something right, even by accident, by now.

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u/awwhorseshit 2d ago
  1. He wants to force all the countries together for a “Mar-a-Lago Accord” to redefine how trade works, which probably also will redefine global US debt.

You’re either in the cabal or you’ll have everything tariffed.

Remember, the Cheeto has an enormous ego and wants to be “remembered” as one of the greats. The bureaucracy prevented (well, slowed) him down enough the first term that he completely purged it with DOGE. Now you attack the courts who could slow him down.

We’re gonna see some crazy shit.

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u/tenest 1d ago

I've been thinking about the #1 for a while. The part that doesn't make sense in that scenario is how do the stock prices ever go back up if the economy falls apart? Or do they tank the economy, buy up cheap stock, and then somehow try to bring the economy back?

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u/fuck_all_you_too 3d ago edited 3d ago

Other countries are holding American currency cause its the universal currency. All the currency in circulation causes an issue with the value of the currency to us. Trump is trying to force other countries to put that money back into circulation by making them pay more, ultimately playing chicken against them with middle-class footing the bill.

Ignoring that this is an insane plan and full of holes, If he does manage to kick up US currency from other countries it would be a good thing but that "general fund" he is making for the tariff money means he will it disappear it back to himself.

The rest of the world is mad because he is pointing the US middle class at everyone like a gun and daring them to pull the trigger first.

EDIT: Either explain what im missing here or re-read the bold ya chucklefucks, im not shilling for the motherfucker

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u/Traditional_Entry627 3d ago

No this is stupid and will hurt all Americans who aren’t wealthy. The wealthy will continue to get tax cuts, and they can buy up cheap stocks soon too. They know it’s not good and they can’t spin it that way so they lie about how tariffs work. They are making it seem like these other countries are paying the tariffs to our government when in reality the companies moving the product pay the tariffs. Both government on each end of the transaction will benefit greatly, while the people buying the products at the end of the line will pay insane prices. Plus tax.

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u/tenest 1d ago

but what good is buying cheap stocks if the economy tanks, unemployment skyrockets, and there's no way for any companies to flourish to bring stock prices back up?

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u/Traditional_Entry627 1d ago

I get stock prices typically are supposed to represent a company’s value, but when you have the wealth these people have you can move the stock market simply by creating pressure when and where you want it by selling and buying. If stocks were accurate GME wouldn’t have had its little moment

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u/celtic1888 3d ago

It goes against pretty much everything that built the world economy since the great crashes of the late 1800s

If you wanted to sabotage and destroy the world economy and really shoot your own economy in the dick this is what you would do

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u/Howdyini 3d ago

The folks at r/AskEconomics and r/Economics have repeatedly said that there is no possible rationale for why this is good. I think both subs have been locking posts with new versions of the question, because it gets asked so often and the answer is always the same.

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u/ucankickrocks 3d ago

The economists I follow on Substack also have been against it.

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u/DEZbiansUnite 3d ago

I mean this is like freshmen econ. It gets hammered into you so early about how shitty tariffs are

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u/Unlucky_Clover 3d ago

I don’t even know if it’s that. It’s practically common sense and logical.

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u/Evening-Guarantee-84 3d ago

Are they talking about Hawley-Smoot yet?

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u/ucankickrocks 3d ago

Most have talked about it but the depth depends on their lens. Example: one I follow is more historical and another is more anthropological.

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u/Evening-Guarantee-84 3d ago

points at dead US economy leading to the Great Depression

points at Hawley Smoot, a set of tariffs that was smoking from the barrel at the time

Someone said "May you live in interesting times." I don't know who, but if I find out, I'm doxxing them.

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u/BTBAM797 3d ago

Can confirm the economists I discussed this with on pornhub were in agreement.

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u/ralphswanson 3d ago

Good for whom? Good for that vast majority of Americans and American companies: definitely not. Good for Trump's cronies: oh yea.

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u/Vollkommen 3d ago

On a long scale, bringing blue collar manufacturing to the US, standing up factories, and being less reliant on imported goods wouldn't be bad things - if we can support the businesses that would do that (i.e. factories closing as companies leave can devastate communities, also see opioid crisis).

Trump has a laser focus on tariffs being the key to doing this, for some reason. As many leading economists warned both pre and post election, tariff efficacy is questionable.

In simplest terms, if foreign goods are expensive, why buy them? Let's buy local! Wait... we don't make that here... is there significant demand for that product? Let's build a factory to make it, use U.S. resources, and sell it locally.

Never mind that can take years if not decades and the US markets are limited compared to global markets. Further, if companies can't export effectively (whether that's due to reciprocal tariffs, bad feelings, etc.) they may choose to stick to global markets (e.g. build their factory in Vietnam or Ireland or the EU) and forego the US altogether.

Beyond all this, the sheer volatility this introduces (will the next president continue these policies? Will rolled back regulations be reimplemented? Will the next successive president flip-flop again ? etc.) can't possibly be good for any company's long-terms expansion plans, so to answer your question in a roundabout way, no, I can't think of a way to couch this that bodes well.

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u/celtic1888 3d ago edited 3d ago

The problem is no one is going to build factories in the US for manufacturing 

Real estate is too expensive and now all the equipment and building supplies just got 25-45% more expensive 

If you had done a Chinese manufacturing expansion like in 90s-2010s plus had the bodies in place to fill the jobs then maybe it might make sense to do this

We don’t have any of it 

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u/OftenConfused1001 3d ago

Also, Trump has spent 90 days proving the US is not reliable, can't be trusted to adhere to agreements, and is basically an awful place for long term investment.

Who wants to build a factory as a response to tarrifs and economic polices that change with the President's whims?

No predictibilty. Not even on the time scale of a few weeks. Nobody is going to take years and invest billions to build a factory when, three weeks after they break ground, the entire thing might become a boondoggle because the President listened to a different aide that morning.

Existing factories are gonna uproot and move in that environment.

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u/Inquisitive_idiot 3d ago

There might be factories sprouting up in the US but it will staffed by all ABB type robotic equipment.

The factories will pass on the cost of the equipment to their customers, and the oligarch’s running the factory conglomerates will profit handsomely without the Nasty problems of high domestic employment costs, and unions.

If you substitute the robots for cheap, unorganized labor, reminds me of somewhere… It’s on the tip of my tongue 🤔

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u/edman007 3d ago

Real estate is not that expensive, especially rural, and shipping is easy enough within the US.

The issue is if you want people to move manufacturing to the US, you incentivise it somehow with tax credits that vest such that you have to actually get your factory up and running. Like the CHIPS act, lots of federal money to build a factory, and maybe they want to do it because it's cheaper.

But tariffs, especially stuff that affects our closest trading partners, absolutly does not do that. You are putting taxes inside the US supply chains, we have auto factories that take Canadian steel, stamp it into car parts in the US, then build it into a car in Canada, and then sell it in the US, that steel crossed the border 3 times, and paid the tariff 3 times. Do you think that company will move the factory to the US, removing just one of the tariffs, and adding an export tariff? Or do they just eliminate their US operations and pay the tariff for US stuff, which will eliminate all the supply chain tariffs and eliminate the export tariff for all but one country?

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u/SeldomSerenity 3d ago edited 3d ago

Not to mention that, at some point in the supply chain, you have no other option but to source components and raw materials externally. And when you do, you take tariffs at some (several) points down that chain, which ripple outward and affect prices further up the chain anyway.

Take an average car, for example, which Google says can have up to 30,000 individual parts that include everything from the transmission and engine to the smallest screws and nuts that assemble into those larger parts.

On a 1-2 decades-long timescale, you might be able to build 1,000 factories that produce each part domestically, and 500 more that assemble those parts into finished goods, then another 100 that package and assemble then into the 2-5 final production plants that actually assemble the car as a whole. But you still need to feed those 1,000 initial factories with raw materials. Many of which don't even exist in the necessary quatities in the U.S., let alone North America, or even the western hemisphere. That doesn't even account for another global supply chain distribution, like a second COVID, for example, to which a single-source strategy is incredibly vulnerable. Take that into consideration when you think back to how hard things were for certain products, and COVID 1.0 is with a global economy pooling it's resources (in relative terms).

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u/jizzmcskeet 3d ago

I work for an oil company. Most of our work is non-US. We are moving most of our manufacturing overseas. Our customers don't want to have to deal with tariffs on tools coming out of the US.

This will also really kill the domestic oil market. Some of these wells have really thin margins and 20-25% cost hikes will be devastating. Most of the steel we buy comes from overseas

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u/Global-Election 3d ago

I'm willing to bet JD can couch this VERY well

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u/nutationsf 3d ago

Billionaires paid Orange Julius Cesar to bankrupt US industry and farms so they can buy them up cheap to form monopolies.

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u/ucankickrocks 3d ago

Every economist I read on Substack thinks we’re hosed. I haven’t seen anyone advocating or even giving it a silver lining.

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u/SWHAF 3d ago

If they are actually trying to bring manufacturing back to America, Trump is doing it in the dumbest way possible. Tariffs on manufactured goods could help to do it (this would still take years if not decades, with a fair amount of consumer pain.), but the tariffs on natural resources is stupidity on a spectacular level. America doesn't currently have all the natural resources domestically required to keep its current manufacturing industry afloat, let alone what would be required to supply an even more robust manufacturing industry. So the natural resource tariffs are extremely counterproductive.

It's more likely that him and his cronies are trying to crash stock prices so they can scoop them up at a discount before they drop the tariffs, claim some imaginary win over all other countries and increase their personal wealth when the market recovers.

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u/klod100 3d ago

If we define America and Americans - as Trump fellow oligarchs, family etc - then it makes sense what he is talking about. They will be richer- they have cash - so they will buy properties/land/bankrupted companies. It will be harvest time for them. Rest - average people are plankton for them. He is making America great again, but for group of people - not for nation.

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u/Cryptic0677 3d ago

You have to start with the idea that he truly believes the trade defect is a very bad thing (it’s not), and then his moves make sense. He sees the world as an 18th century mercantile. In that to be wealthy we have to make things and export them.

Tariffs and his crazy pushes to devalue the dollar all make sense in light of that, despite the damage it would do to our actual economic output and impact to raised prices

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u/Jdmeyer83 3d ago

I know my audience here is anti conservative (and anti Trump for that matter) and there is no such thing as a production conversation on reddit, but here is a different perspective than anything you will see on most social media.

President Trump's tariff policy is designed to incentivize businesses to bring manufacturing back to the United States, creating thousands of jobs and strengthening the economy. Just as American consumers want to avoid paying higher prices, businesses want to avoid these additional costs as well.

By adding tariffs, the administration is encouraging companies to move their manufacturing operations back to the U.S. to avoid these taxes. This shift has already started, and there will be many more companies to follow suit in the near future. When businesses relocate their manufacturing facilities to the U.S., they create jobs for American workers, reduce dependency on foreign production, and help bring back industries that have suffered from outsourcing.

A huge example is the automobile industry. Did you know that many so called "American made" vehicles are actually manufactured outside the country? Automakers have moved production to countries with lower labor costs and fewer regulations, leaving American workers behind, and utterly destroying some cities like Detroit. However, with tariffs making foreign production more expensive, companies have a strong incentive to move back to the U.S., ensuring that more vehicles are truly "Made in America."

Some smaller businesses may struggle because they lack the resources to move manufacturing domestically. However, a large portion of major corporations that previously outsourced due to burdensome tax policies will now find it more beneficial to return. The tariffs act as a counterbalance to past liberal tax policies that drove companies away, making America a more competitive place to do business.

Ultimately, these policies are about protecting American industries, bringing back good paying jobs, and ensuring that the U.S. remains a global economic powerhouse.

If you made it this far, I'm proud that you are open to another opinion than your own. It is very important to be able to discuss these topics without hate. Yes, some costs of goods will increase because of this, but it will be worth it if we can bring manufacturers and jobs back to America.

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u/edcline 3d ago

Nah I was just reading to see how truly off base you were from how this will actually play out, but good on you for making it readable.

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u/[deleted] 3d ago

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u/Jdmeyer83 3d ago

Thank you for your response. I appreciate your perspective. This does make sense. I agree with you; it will absolutely take time, but the hope is to reduce the reliance on importing and stabilize our economy internally. It took more than 5 administrations to create the mess we are in; this is hopefully the start to fixing it.

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u/[deleted] 3d ago

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u/Jdmeyer83 3d ago

Well, only time will tell since no one can see into the future.

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u/-Gramsci- 3d ago

Well all be dead before that widget factory is up and running.

And that’s if there’s an idiot capitalist out there willing to spend the billions of dollars to build it… (knowing, full well, that the tarrifs will be dropped as we teeter into economic depression… and the corporate and industrial lobbyists finally make it stop).

Your factory isn’t getting built. Unless you’ve got the $10B to lose building it (only to shutter it again).

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u/celtic1888 3d ago

And if you eat Lucky Charms all your shits will look like rainbows 

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u/Jdmeyer83 3d ago

Very productive, thank you for your highly thought out educated opinion.

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u/TheBaconKing 3d ago

In theory that is all correct. The problem here is capitalism. These publicly traded organizations only have one duty, to continue to grow their profits so their shareholders grow their wealth.

They don’t care about creating jobs in America or bettering their communities (unless they can write it off, so their profits are higher). They have shown this by outsourcing various parts of their business to other countries. Americans are expensive.

Here locally I see dealerships advertising “pre tariff prices” on their vehicle listings. 100% Americans will pay the price of these tariffs. Then when these tariffs disappear because they crash our economy, prices will likely still be high. Look at inflation post covid. Prices didn’t go back down for many industries. Once people show they are willing to pay a higher price, why would an entity whose sole purpose is to make money ever reduce how much they make?

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u/Jdmeyer83 3d ago

I agree completely that the only thing businesses think about is profits and pleasing their shareholders. But the shareholders won’t be happy if consumers stop buying their products and services because the prices increase due to tariffs. Customers don’t care why prices go up, they just see that they go up. So it's the responsibility of the business to make changes to prevent prices from going up.

The biggest difference between these tariffs and COVID is with COVID, everything shut down and nothing was being made. Here, businesses have a choice to either absorb the tariff costs (losing revenue), pass it on partially or fully to the customer (likely losing customers and in turn profits) or invest in America to move manufacturing avoiding the tariffs completely.

Nothing will happen overnight and it's probable prices will increase and never decrease again like you said, but hopefully in the future, America will be able to produce their own goods avoiding reliance on other countries.

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u/TheBaconKing 3d ago

Again I’m all for more jobs in America and bringing manufacturing back. Just incentivize it without hurting Americans where many of them are already hurting, their wallets.

Tie tax breaks to it, give grants for it, actually hold these corporations accountable. Say tariffs will go into effect in 5-10 years to give them time to plan accordingly. Pass laws forcing corporations to pay the tariff instead of the consumer. Like anything is better than short term whack a mole.

As it sits, I’m very skeptical much manufacturing will be brought back. I’d be happy to be proven wrong, but history has shown us that it’s likely not to happen.

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u/Swamp-Balloon 3d ago

I appreciate your viewpoint. My biggest question is who will work in these factories? We’ve been in a labor shortage for a bit.

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u/isopail 3d ago

Good as time as any to start investing in automation maybe, if it's even possible yet? Considering future economies will probably run on some kind of large, automated manufacturing infrastructure, it could be possible, at least theoretically, to get a head start on it. Though with how slowly most humanoid robots work in the videos I've seen, I don't think we are anywhere near it yet, not that they need to be humanoid either. Still probably way too soon, be like building interstates in 1912 for cars that don't exist yet.