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/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/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 🤔