The important quote: "If the tariff from China is 100%, and you know it is going to be 100 % for the next 10 years, you will make a different business decision than if it is, ‘Might be 100%, not sure what's going to be in three months, what's it going to be in a year from now, and what's it going to be in three years from now.’ That uncertainty does not create stable markets. It does not create very accurate business decisions."
Yeah. If you actually wanted to bring manufacturing back to the US you'd figure out which industries you wanted to develop, probably subsidise them, communicate very clearly what you were going to do and then ratchet up the tariffs on those specific finishes products, whilst being sure to maintain access to raw materials and components you still needed. What you wouldn't do is slap unexpectedly high tariffs on absolutely everything, shout about how you'll do a deal if only they respect you, and then walk them back in as inept and inconsistent a manner as possible. That's what you'd do if you wanted to destroy what's left of your industry. Think there's anyone in the rest of the world relying on US suppliers that hasn't started looking elsewhere? And it might now be cheaper for Americans to import from Japan or South Korea than from US companies dependent on Chinese components in their supply chain...
Subsidizing specific manufacturing and having at least some consistency was a big part of the US strategy until the last few months. Most notably, the US passed huge subsidies for semiconductor manufacturing in 2022.
I don't know how effective that will be but it at least seems more coherent than these goofy tariffs (whatever people think of tariffs overall we absolutely cannot keep shifting them week to week).
> we absolutely cannot keep shifting them week to week
We absolutely cannot create the expectation that we plan to get what we say we want: zero trade deficits.
If we even succeed in making the rest of the world believe we're going to do this it will be catastrophic. So much of the advantages the US enjoys rides on trust and goodwill, and zeroing trade deficits would wreck the world economy and destroy trust in the US dollar as a safe haven. Just like paying down the national debt would.
(Software dev working for a European manufacturer of industrial automation equipment)
We just hit pause on a major product development effort in order to go back and re-evaluate some of our vendor choices. Specifically to see how we can eliminate as many dependencies on US companies as possible. Fortunately we were relatively early in a 18-24 month development cycle for a somewhat complex hardware device.
The company already started a project two months ago to look at how we can migrate off AWS and Azure and instead use domestic alternatives for our online systems.
For the hardware components this is a bit more work, but it looks like we can find replacements for most of the key items. Though there are a few components where we would have to rearchitect some of the systems to eliminate US components.
For us it is simple: we need stability and predictability. We have long development cycles and long lifecycles for the things we make. Stopping development and trying to eliminate things that depend on the US is a bit unreal and shocking, but management have to deal with the world as it is.
I know some of my colleagues at other companies in the sector are going through similar exercises.
Right now changes are taking place that will not be visible for years, but that will stick around for decades. The current administration in the US is doing real, long term damage to the US.
It is really weird for us (Europeans) to read hacker news and it see mostly indifference to what is happening in your country. You probably should worry a bit more about this than you do.
You also wouldn't go out of your way to piss off America's two biggest export markets: Canada and Mexico. As it stands, not only are there significant counter-tariffs that would make U.S. manufacturers even less competitive in Canada[1], there is significant consumer backlash to anything American-made where, just a couple months ago, products "Made in the U.S.A." would have been viewed favourably[2].
The way Trump has done things, any company that manufactures in the U.S. had better be able to get by with just the domestic U.S. market, because exports to Canada and Mexico aren't likely to be significant for quite some time, even if Trump backs off quickly. Lasting damage has already been done.
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[1]It remains to be seen if Mexico will eventually retaliate.
[2]Perhaps not favourably in terms of price/quality competitiveness, but certainly in a geopolitical "support your neighbour instead of China" sense.
It also breaks a lot of the way businesses make and sell stuff today.
For example, several car makers makes cars in Canada, Mexico and the US but sells them across the borders (and globally). Honda makes Civics and CRVs in Canada but sells them in the US, but the Accord is made in the US and sold in Canada. So now if there are tariffs on car imports and especially if there is also a reciprocal tariff, Honda gets hit both ways. What would they do? Make some civics in the US and some in Canada? Seems very inefficient.
Factually despite all the noise there are no significant tariffs in either direction at this point in time, 98% of trade is tariff free under the free trade agreement. Mexico and to a lesser degree Canada are in a more favorable position than they were before the tariffs as they are the only countries in this position [1]
My experience is this: The majority of Americans have a hard time believing we (Canada) are their biggest export market and trading partner generally. Because they barely think about Canada, and when they do it's as a quaint and cold place of no real importance to them.
And this perception has worked in Trump's favour. "Those weak irrelevant people up there are taking advantage of us, time to teach them a lesson" works well when the people you're telling it to don't realize "those people" are their single biggest customer and a source of wealth for them.
American business people aren't generally accustomed to treating their customers this way. I hope they come to their senses.
> No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once.
12th Amendment:
> no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.
You can produce the same bullshit arguments for literally any law in existence because language is inherently ambiguous. If someone starts wiggling into, "well technically it's a bit ambiguous whether we're allowed to mow down peaceful protestors with machine guns," it is incumbent upon all of us to say "no, actually that's not ambiguous."
Courts will look to the public attitude to assess these arguments, and the public attitude should be that blatant accounting tricks like the VP switcheroo are incompatible with both the language and intent of the law.
> But winning an election is not the only way a person can become president. And there are hypothetical situations involving presidential succession, Baude adds, that are "not addressed as fully" by the Constitution's text. They reveal ways in which the common understanding of the 22nd Amendment's presidential term limits could be challenged in court.
One theory: Trump could become vice president and then president in 2029
> Still, in court, a lawyer could try to argue that being a "natural born" citizen, at least 35 years old and a resident within the U.S. for at least 14 years are the only presidential eligibility requirements specified in the Constitution, says Stephen Gillers, a professor emeritus at New York University School of Law, who proposed in 2004 that Clinton run for vice president.
I'm unconvinced that the Supreme Court will look towards public sentiment.
I did read it, and that argument is bullshit, just like a hypothetical argument that e.g. the government can mow down protestors because they held a mass trial declaring ("satisfied due process") that all people in the street are guilty of a crime and subject to the death penalty. Nothing in the Constitution precludes such an interpretation.
There is no way to write words that preclude all such interpretations, that does not make all possible interpretations valid or reasonable.
> I'm unconvinced that the Supreme Court will look towards public sentiment.
Yet stunningly, SCOTUS decisions overwhelmingly align with cultural attitudes of their time because that is in fact the role of SCOTUS — to adapt interpretations of text to the current cultural moment. That's why it's notable in the few occasions where they conflict.
I know originalists and textualists like to act otherwise, but they're liars, and you know this because they do in fact rule against the text of law when the text conflicts with their cultural imperatives.
The more hyperbolic the example, the easier it should be to demonstrate why the language of the Constitution precludes it. Yet you cannot, because that's not how language works, per my point. If I start pushing for this interpretation of the Constitution, the civic, intellectual, and honest reaction is not to say, "hmm, actually it is pretty ambiguous!" It's to say: "that obviously is not allowed and would be tantamount to a coup."
Everyone knows Presidential terms are meant to be limited to two. Everyone knows going for a third term would be an accounting trick. They know it, you know it, I know it.
Your selection of one example out of the 47 cases SCOTUS decided that year (+ countless cases they didn't grant cert to) is evidence of my point, not yours. How many of the other 46 cases can you name? How many of the other 81 cases between then and now?
I'll guess you could name fewer than 4 of them, ergo, as I said: "That's why it's notable in the few occasions where they conflict."
I take it then the courts finding on presidential immunity also supports your view of unambiguous interpretations and the court following public opinion?
I said neither that there are unambiguous interpretations (in fact I said the opposite, that all texts are intrinsically ambiguous but that does not make all interpretations equally sound)
Nor did I say "the court follows public opinion."
I said "courts will look to the public attitude to assess these arguments", which is true, and "SCOTUS decisions overwhelmingly align with cultural attitudes of their time" which is also true.
And yes, the Presidential immunity argument is exactly one such argument: the pro-dictator cultural movement in the US is significant and vocal, while the anti-dictator movement is full of equivocators like yourself who say, "well you know, the Constitution is a bit ambiguous on this point..."
So yes, actually, that decision is an excellent case in point, and a clear reason that SCOTUS should know the American public has no pseudo-intellectualized appetite for a third term.
> in fact I said the opposite, that all texts are intrinsically ambiguous but that does not make all interpretations equally sound
Your original comment was this:
> There is absolutely, unambiguously no Constitutional method by which this will ever be true.
So which is it, there's absolutely no ambiguity or there is some?
> And yes, the Presidential immunity argument is exactly one such argument: the pro-dictator cultural movement in the US is significant and vocal, while the anti-dictator movement is full of equivocators like yourself who say, "well you know, the Constitution is a bit ambiguous on this point..."
So you're saying that the Supreme Court ruled Presidential immunity because of vocal public opinion for dictatorship but suddenly the same court won't rule in favor of interpreting the law to support a third term?
Seems contradictory chief. Regardless I personally hope it doesn't come to a court decision but we'll see in 4 years.
I didn't say that SCOTUS won't rule in this direction. In fact, again, my caution indicates I believe the exact opposite: it is very possible they will, which is why we should cede no ground on the "it's ambiguous" argument. It truly is not ambiguous. It is not even ambiguous to the people who are pushing it. Again: everyone knows it's an accounting trick.
Yes, republicans in congress can stop this at anytime, and once people tangibly feel prices increase congressional leaders will get scared.
If congress turns heavy blue in 2026, they can rain hell on the mild conservative goals that Trump seems to have taken a nuclear approach to. Congressman do care about their seat, and they do get scared of losing power. Right now Americans are particularly sensitive to price increases as well, with the pandemic inflation still fresh on everyone's mind.
Personally disappointed to see opposition US liberals in the US still fantasizing that the problem of Trump is going to be solved "eventually" in 2026 or in the courts.
More protests needed. This is tyranny-lite in action, huge overreach by the executive that I'm pretty sure the hallowed founders -- that people always talk about with reverance down there -- would be horrified by. 18th century revolutionaries would be disappointed to see the way people are rolling over.
> communicate very clearly what you were going to do
Probably not. At least, not until right before the ratchet up. You'd want to first subsidize then once industries are starting to build up, you'd want to start the ratchet up. You probably also wouldn't want to say "We are doing this because we want to be better competitors" or whatever. It'd be better if you said something like "We believe country x is doing terrible thing y and for the safety of our country and others we are going to apply a tariff on good z until x stops doing y".
But yeah, universal tariffs are the dumbest idea in the world. We've essentially sanctioned every single nation which is going to massively damage us and manufacturing. Going to be real hard to unwind this.
You might add a bit of "Country X" is bad spin in there as political justification for what you're doing, agreed.
But you would make damn sure you communicated when the tariffs would hit punitive levels so the rest of the value chain knew and had already had chances to find themselves domestic suppliers
Gotta be REAL careful about how you signal things if your intent is ultimately to take over a market. Telling manufacturers you intend to isolate could leak out and ultimately trigger pre-emptive tariffs.
Honestly, just subsidizing is a lot simpler to do and it doesn't run the risk of making the world mad at you or triggering retaliatory tariffs.
You're a lot less likely to get retaliatory tariffs when you're communicating to manufacturers that you intend to raise your $nicheproductclasses tariffs to support domestic manufacturing under industrial strategy and national security policy than when you announce blanket tariffs with threats. The US imposed 100% tariffs on EVs last year for example[1], which wasn't exactly a universally popular move but wasn't likely to provoke a trade war. Much easier to accept losing share of a market than every market, plus also less likely to accidentally punish the manufacturing industries you're trying to support.
[1]there's a certain irony in one of Biden's last actions being to impose tariffs in a way which massively helped Tesla, and one of Trump's first being to propose tariffs that could seriously hurt its supply chain if they don't get exemptions...
Wouldn't you prioritize subsidizing local production over taxing foreign production? It just seems like a much cleaner and more straightforward way to increase local production. It seems like this has been at least somewhat effective with semiconductors over the past ten years. And then you don't have the risk of harming consumers. Everybody wins!
Its why China is technologically eating everyone else's lunch when it comes to renewables and battery tech. Their government dumped massive amounts of money into R&D and building out manufacturing and mining infrastructure.
Heck, it's why the US has been (not for long) a leader in medicine. We've historically dumped huge amounts of money into medical research through the NIH.
Biomedical companies don't like research, they like making money. Research is expensive and by its nature filled with deadends. A biomedical companies would much rather take and run with cheap (to them) NIH research.
Businesses like clear timetables which is the opposite of what Trump is doing right now. So no matter your theories about tariffs what he is doing cannot be good for business.
this narrative doesn't sound right. There isn't very much preventing anyone in any given other country from using NIH research. Moreover a substantial amount of NIH research grants goes to PIs or postdocs or grad-students who are Chinese nationals who then advance their careers back to their home country.
Universities concentrate experts, and that leads to local economies. That's why SF is right outside of Stanford. Google wouldn't be there if that wasn't where Stanford grads lived. The stories about the Chinese government's tremendous efforts to repatriate skilled professionals (like giving them entire factories to run) come about as a result of the fact that they're working against a strong default of staying in the same place.
The customer and taxpayers are generally the same people here.
So, knock on effects can dwarf direct effects. Tax foreign computer components at some insane rate and perhaps you get a domestic market but you could also see companies start moving their US data centers to Canada and Mexico. Which then has it’s own economic disadvantages.
> Because when you subsidize, the taxpayer is paying for it. You are socializing the costs and privatizing the profits.
I think that's a really good point. It's extracting money from consumers through taxes and handing them to industry in the hopes they innovate.
Tariffs though. In that case you're extracting the money from the consumer (through the international organizations being taxed) and giving the profits to the government. What are they going to do with it?
The US got dominance over the entire world's economy, an unprecedented amount of weal, and almost complete technological dominance with high taxation and direct intervention on the market. And even more, they then taught it to Japan who came and repeated basically the exact same actions with basically the exact same result. Oh, yeah, and then China did it...
Then they organized a bunch of morons to create an school teaching not to do that, celebrated them so they would teach every foreign school, and managed to stop most of the world from competing with them. But a couple of decades later everybody in a position of power there was a moron from that school.
The resources for subsidies come from printing new money (which is possible by having the world reserve currency), and then spending that new money for deliberate purposes instead of just giving it to the banksters to bid up the asset bubbles. In an imaginary world where we had a Congress that served the People and a mentally competent President, of course.
Who gets subsidized is indeed political, but I don't see a way to sidestep that since there's centralization as soon as you take action to prevent the currency from deflating.
To be clear, the US is not unique in its ability to do this. Many other countries would benefit from understanding it! In the UK we have a government wanting to build a growth strategy around finance. It's like a parody that nobody gets (yet).
But Congress doesn't actually decide to print new money? When they decide to spend they have to raise taxes or issue debt (treasuries).
The federal reserve, on the other hand, controls interest rates and other mechanisms which actually result in money "bring created" for practical purposes.
Yes, that is one of the mechanisms that has hamstrung us from being able to appropriately respond to the economic effects of offshoring. It can obviously be changed.
Or the mechanisms themselves might not actually have to be changed if we could cast off this myopic political red herring about "the deficit". What we perceive as the balance sheet of "the government" needs to include The Fed, Fannie/Freddie, etc. Treasuries owned by other countries are the equivalent of a big savings account. Treasuries owned by the Fed are the same as all the other other debt owned by the Fed - monetary creation / monetary inflation.
Nobody says it is effective, only that it is possible.
One way could be to send the message to the market that a certain area is strategically important and any startups will have access to extremely cheap loans and not have to worry about natural resources or personel.
Then follow up on those promises, take a step back, watch the Cambrian explosion that follows and when the businesses seems to have grown legs simply scale back funding and watch them fight it out. One could even say that is exactly what has happened in the world several times over. It is not unique to China.
Subsidization also makes products viable outside of the tariff bubble where tariffs can only really make it viable to places with the same tariffs against the same source(s).
If you really wanted to fix the US economy you'd uncouple the $ from the oil markets and let it float downward - the cost of imports would go up and exporters would earn more (and be more competitive in their domestic markets). The BTW is why China is pushing the yuan down now, because unlike Trump, they understand how this stuff works.
Trade imbalances are simply currency imbalances that haven't been allowed to find their own levels - what you can't do is have an artificially high currency (by requiring all global oil sales be made in it, creating an artificial scarcity) and not have a trade deficit - you can't have your cake and eat it too
The dollar is kept artificially strong through oil, so america can maintain an effectively infinite debt and an arbitrarily large deficit without the dollar ever weakening despite how much is printed…
I’m sure this sounds bad to someone, but if I was America, I wouldn’t try to put the gift horse into the wood chipper.
Oil supported by the world's biggest military and huge subsidies.
It's why moving to renewables would be catastrophic for the US. And for all of the big Fossils, including Russia and the Saudis. And the smaller second-order beneficiaries like the UK who make money from "services" - moving the big money around and avoiding taxes on it.
We're in a messy transition to a post-fossil global economy. It's going to take decades, and it's not obvious how much will be left standing when it's over.
But one way or another, it's locked in and unavoidable.
If your currency is high value (which USD is due to demand in part due to oil and part due to others having reserves of it), foreign goods are cheap to you. This makes importing attractive, but it makes it very expensive for other countries to buy your exports.
If your currency has a lower value, it’s cheap for others to buy your exports, but expensive for you to import goods.
> If you actually wanted to bring manufacturing back to the US you'd figure out which industries you wanted to develop, probably subsidise them, communicate very clearly what you were going to do and then ratchet up the tariffs on those specific finishes products, whilst being sure to maintain access to raw materials and components you still needed.
I'm not here to defend the current approach, but what you're describing sounds like a centrally planned communist / state-directed economy or something. Is that really the way forward?
The whole idea of the government bringing manufacturing back to the US is central planning. The free market approach is to remove barriers to trade and let things develop as they may.
> The free market approach is to remove barriers to trade and let things develop as they may.
And the events of the last 30-40 years have shown why this is a beyond foolish approach. The 47th and MAGA didn't rise out of nothing, they rose out of the economic devastation brought upon by completely unchecked turbo-capitalism.
Conversely the Chinese government has split their economy into 50% privately owned and 50% state owned, which has fueled decades of rapid and consistent economic growth, so much so that the current administration now views China as our primary strategic and economic rival.
> what you're describing sounds like a centrally planned communist / state-directed economy or something. Is that really the way forward?
What they are describing is basically what every sane government does, and what the US used to do until, er, a few months ago.
If you consider most western countries to be centrally planned communist states (including the US up until very recently), then I don't have anything else to argue.
You may think this is fair, while others disagree. As there's no "world government" arbiter for these kinds of actions, there are only the actions your country takes, and the actions other sovereign countries take in response - for example, all countries in the world could ban import of anything produced by your burgeoning state-aid factories, leaving you with only a domestic market to sell to; https://en.wikipedia.org/wiki/Dumping_(pricing_policy)#Anti-...
Fun part is, the USA and some other nations of 1947 realized that free markets needed some kind of "universal arbiter" to curb such shenanigans and brought the World Trade Organization (originally GATT, WTO since 1995, not affiliated with the UN) on the way. Most of you probably heard of it.
Virtually all the world's nations are voluntary members. Sure, many criticize it for being a tool of the USA and other western nations to browbeat other nations into shape (e.g. China). There is merit to this claim, but obviously it is not so clear-cut. However, it can't be denied that the WTO has been a tremendously useful tool for the USA and its allies to shape world trade. Somehow the 45th president of the USA thought the USA would get the short end of the stick here and started to obstruct WTO proceedings in 2018. The WTO has lost a lot of its influence since then, removing a powerful tool from the USA's arsenal.
I think this is the root of the disconnect. A lot of people say "wait, Americans wanted X because it's a useful tool for projecting American power" - whether X is the petrodollar, the WTO, free trade, whatever. But largely it was one segment of Americans that wanted and benefited from it.
As a comparison, Maggie Thatcher imported communist Polish coal in the 1980s and just stopped paying British miners. It saved the country a fortune - it got the same quality and amount of coal for far less money - and sent entire segments of the country into a death spiral from which they'd never recover.
Similarly, the windfall of finding oil off the coast of Scotland in the 1970s made fat stacks of cash for Britain. Maggie Thatcher did not spend that on deindustrialising Scotland. She did not spend it, like the Norwegians, on a sovereign wealth fund that would benefit everyone in the country. Instead, she spent it on revitalising the old docklands of London, and now they're the epicentre of high finance, where the UK makes most of its money in financial services -- mainly for the people who work in that industry, and the South East of England where they live.
These choices ruined the lives of large swathes of the country. But they hugely benefitted the country overall. Were they good choices or not?
Please, give me some credit. Who assumes that any nation's population, or any sufficiently large group of people, really, is a homogeneous, uniform, or monolithic in their opinions? I certainly don't.
Sure, but the point is that a wide spectrum of people, particularly on the left, believed so strongly that WTO was such a net negative for the average American they were willing to violently riot over it.
So when we talk about “a useful tool” in the American toolbox, we should keep in mind that tool mostly, or at least has the perception, of benefiting only the rich.
> You may think this is fair, while others disagree.
I said nothing about fairness. What I said is that every government and some point or another makes use of protectionist economic measures.
> for example, all countries in the world could ban import of anything produced by your burgeoning state-aid factories
This just doesn't happen, at least not for the reasons you mentioned.
China is a good example, as it gives many forms of subsidies to its industries. Other countries respond with a mix of measures to protect the industries they care about.
When I hear about the concept of central planning, it tends to remind me of a mathematician named Leonid Kantorovich I had read about in a textbook. I am not too familiar with the economics concepts that he might have run into, but this article [1] is pretty interesting in regards to how centrally planned socialist economies also need to use the idea of interest rates and prices like capitalist ones.
If you do this to the entire economy, yes sure, fair. If you decide that you want Americans to eat American garlic and you give garlic farmers a tax break or grants to buy seed and fertilizer I wouldn't call that central planning. More "strategic investment".
Replace garlic with whatever industry it is that the gov wants to strategically invest in: semiconductors, automobiles, aerospace, weapons, renewable energy.
I dislike this sort of binary thinking. It's why we are having the problems we have.
Just because some industry gets subsidized and/or ran by the government, doesn't mean we are now all communists. Every government has SOME industry that is ultimately state ran. Fire departments, police, and education are prime examples of nearly universally state ran systems.
There are some industries that just, frankly, work better when state directed, not all of them, but a few. Private fire departments don't work, neither do private police departments.
This is not nor has it ever been an all or nothing thing.
If you're spending 3.5 years trying to "renegotiate a deal", you don't have a strategy to bring manufacturing back. If you change your policy multiple times in a week you don't even have a strategy.
Easier to onshore manufacturing with multi-year timelines, but you don't need multi-year timelines to impose tariffs on carefully selected industries, not penguins and your existing industries' key suppliers.
Well, if your goal is to pump and dump the stock markets, this is a strategy and it is working.
I don't think that the current administration has enough foresight to actually plan for such a scheme but I think they are smart enough to see an opportunity, to wit the posts on social media shortly before withdrawing some tariffs.
> This ignores the reality of power in the US. Presidents can't implement multi-decade initiatives.
Which is why if anyone wanted to actually bring manufacturing "back" to the US they would work with congress and pass laws that curtailed the tariff powers in a way that ensured that in the areas where you wanted long term investment the president would not have the power to change policy unilaterally. At which point the typical congressional gridlock would serve to ensure stability going forward and allow businesses to invest.
Presidents don't need multi-decade initiatives to be not so hopelessly inept at trade policy they end up hurting manufacturing rather than bringing it back.
Trump shouting about how his amazing tariffs are going to bring manufacturing back and then promptly cancelling most of them and bragging about how everyone wants to do deals with him and he's going to do beautiful deals isn't any kind of strategy for bringing manufacturing back, and frankly the fact that so many Americans are dumb or partisan enough to insist it is represents a bigger problem for US industrial policy than term limits
Meanwhile, every other country is also negotiating amongst themselves to remove any dependence on the US. Dealing with the US is only to soften the blow and buy time.
Nope, only the people defending the dumbest and most pointless act of economic vandalism in history.
In fact the only argument I can think of in favour of setting tariffs for the Heard and McDonald islands is that the average American that thinks that this level of attention to detail helps US manufacturing probably is less intelligent and capable than the penguins that live there....
> ... some were concerned about the law's provisions favoring American industry. ... the chairman of the 2023 G20 meeting in India, called it "the most protectionist act ever drafted in the world", asking American officials, "You believed in market forces and now you do this?" Other countries have begun to create their own similar laws. China requested WTO dispute consultations with the United States.
> 27 European Union finance ministers have expressed "serious concerns" about the financial incentives of the Inflation Reduction Act, and are considering challenging it. They have listed at least nine points in the legislation, which they say could be in breach of World Trade Organization rules. They were opposed to the subsidies for consumers to buy North American-assembled electric cars, as EU officials believe the subsidies discriminate against European carmakers. One EU official told CNBC that, "there is a political consensus (among the 27 ministers) that this plan threatens the European industry" and its supply of raw materials. In February 2023, the European Commission announced it would propose the "Net Zero Industrial Act", similar to the IRA, in turn putting pressure on the United Kingdom and South Korea.
In the mild sort of way. Mostly Biden didn’t change much and kept things stable (the way businesses like it), but there was definitely room in that for the CHIPs act, which is a double edged sword (by pushing China to invest more in its local chip production). He didn’t bother getting rid of the DJT tariffs that survived after COVID hit either.
This was the entire purpose of the CHIPS act. Biden just took some of the protectionist policies Trump started in his first term and did gave them an actual objective.
I don't think it's physically possible to move much manufacturing in that time. If you think it is, please give estimates in dollar values, number of jobs, and square footage of factory construction expected.
Previous government efforts do not need to be sabotaged every time there's an election. For example, when Biden came in he didn't immediately unwind all of Trump's industrial efforts. He kept the China tariffs, and built on top of them with the CHIPS act to add the "carrot" part of "carrot and stick".
The business decision of these tariffs very well be to just offshore American operations altogether. Better to keep most the world market and lose America. It's not a given businesses will choose to invest in an isolationist country even if they are from there if protectionist policies they may benefit from narrow their horizons.
Most of the demand (in terms of dollars/euros) is confined to the developed world. What happens when both US and EU want to bring back operations back to the home countries? Then these companies are left with serving less of the global demand.
If the tarrifs stay high, then US consumption will plummet since all goods will now be that much more expensive and people won't be able to afford as much.
If tariffs go down then moving manufacturing to the US was the losing choice for any company that chooses to do so.
Either way betting on current US consumption levels with US manufactured goods is a losing bet.
The backdoor is bringing heavily automated factories to the US. The viability of this might still be mixed right now, but at least in the future, even without tariffs, the golden goose of manufacturing is still "locally made by robots."
They invest in Africa and Southeast Asia, and everywhere else that isn’t American/Western Europe, and create demand that way. What do you Xi has been doing for the last 10+ years with Silk Road? China already had a plan for this trade war.
China is essentially acting like a VC fund. They spread money around everywhere... and get a ton of benefits in return. Local autocrats just love China because their money doesn't come with strings attached (such as IWF or EU/US aid), they get to spend down a chunk of their massive dollar forex reserves, provide a ton of people from their poor provinces with work (Chinese foreign construction projects usually don't hire local labor!), and build up soft power in the population of the countries where they invest.
I'm hoping that wasn't a racist comment (that those other countries aren't worth it for some reason), I'll give you the benefit of the doubt. There is a lot of potential in emerging markets, potential that the Americans have ignored to their detriment (as we are experiencing now, we basically have no leverage over China because they expanded their markets enough over the course of a decade).
It's a reference to a movie called "Empire of Dust" where a chinese-led team has a hard time building infrastructure in Africa.
Whether or not some third world country is worth developing is an economic question, not a moral one. And even if it is, the question of whether or not you will be able to monetize that relationship by the end of it is another one. What the chinse are doing now is basically IMF-style debt trapping of other nations, which doesn't seem like a successful strategy historically.
The bottom line is that if the natives don't want to cooperate with whatever civilization you're building, it's not going to work out. Look at what happened to the USA in afganistan (and pretty much every empire that stepped foot in there). I don't think that's racist, I think it is pretty optimistic outlook towards the sovereignty of nations.
There is a really great movie called Bitter Lake about this, by Adam Curtis.
The Europeans seem to have become more free trade curious after recent events so this doesn't seem like it will hold up as a "what if". And I expect that the coming months of US-only inflation are just going to confirm that position for them even i they face a mild recession due to US market access/demand collapse issues.
The EU has always been on the side of free trade (agreements with Turkiye, Canada, Japan, Mercosur, the failed TTIP etc have been worked on for many years).
But it's also always been protective of the internal market and e.g. added tariffs on Chinese steel recently.
Only about 1B people in EU+US. Majority of people only need one phone. If I were a cell manufacturer, I'd drive down costs to service the other 7B people.
Of course, you won't make the same margins as EU+US business. Not sure if that is enough incentive to onshore consumer manufacturing.
The margins get really thin after the first 2 billion or so. Middle income globally is ~10-20 PPP dollars a day and that's only ~17% of the world's population. They're generally radically different phones between markets too no one's really dominating the cheap phone market.
The margins are only thin if you're used to 40% as Apple has been. They're not at all so thin that the rest of the pack aren't making actual profit filling the gap for the other 7B people who aren't well off westerners.
Sure, but say it is: you assume a long-term trade barrier with China, invest in US factories and employee training, bring folks in from outside, start your production, get some competitive wins in the domestic (but obviously not international!) electronics market...
Then some future administration decides on detent and signs a free trade agreement to open markets or whatnot, yada yada. China marches right in and eats your lunch. Again.
Trade barriers do not do anything to address fundamental inequities in production efficiency. To be blunt: China is great at making electronics not because they have all the talent. They have all the talent because China is poor, still. The US is not (though it looks like we're aiming that way). Ergo Chinese production efficiency will be higher.
What trade barriers with China actually do isn't to bring manufacturing back to the US, of course. It's to move production from China to Vietnam or the Philippines or India or wherever isn't tariffed. Then of course we'll need to apply tariffs to them, and so on.
Doesn't need to move production to Vietnam. Needs to move finished product to Vietnam and replace "Made in China" sticker with "Made in Vietnam" one.
As to the poor part, after Xi is done with dumping treasuries, and subsequent US default and USD cratering, the salaries would be on par on both sides of the ocean (as they should be).
Which would also automatically solve the illegal immigration problem. And fentanyl problem (no money no honey).
> They have all the talent because China is poor, still.
That’s why China has (somewhat) inexpensive labor. It does not explain why China has far more plastic engineering talent, electrical engineering talent, etc than the US.
They have more talent because that's where talent is needed. You don't staff factories with "talent", you staff them with labor. Then you need "talent" to design the process. It all feeds back. We used to have injection molding plastic experts in the US in the 70's! The technology was invented here. But they all retired and no one stepped in to replace them because those factories all closed down. Chinese kids picked up the slack.
The US wasn't sleeping though. We trained a generation of software engineering talent that remains the envy of the world. There are whole web sites devoted to this "Hacker" subculture, even. Maybe we can find one.
Seriously: there's no problem here. This is the way economies work.
China really isn’t that poor anymore. A lot of their recent productivity gains are coming from automation, and they are leaning into harder than the Japanese did in the 90s.
I'm going to push back a bit here: things are improving, and China is already as rich as Mexico...now I get that American's have a unjustly bad impression of Mexico because of poverty at the not very populated border, but Mexico isn't a poor country, nor is Thailand, etc...these are all middle income countries that are quickly approaching high income countries.
Having lived in China for 9 years, and left 9 years ago, I can't really justify calling China poor anymore. Ya, they have a huge rural area and they still have lots of poor people, but they have a huge middle class (even if it isn't a majority of the country) that can afford a lot of things.
Chinese wages remain about 6-10x lower than US workers expect for the same kind of job. Whether that's "poor" or not is arguable. There are much poorer nations. Nonetheless US wage levels simply aren't going to compete, and it isn't even close.
Right. When I was working in China, I was only making about half as much as I do now at Google. The gap is much smaller for SWEs, even my local colleagues weren't making much less than I did. China is definitely an upper middle-income country, officially and just by looking at the numbers. They are breaking into being a lower high-income country next, and the graph really isn't slowing down.
But they are going off a demographic cliff, and that is why they are investing heavily in automation. They just won't have the people to do this work in the future, and expanding abroad and investing in robots are the only options for them.
Since he's even taxing empty islands, I doubt the end result will be anything else than either not selling to the US or selling to the US with a grey market.
If you put tariffs on the whole world, it's basically the same thing as a global economic sanction, similar to what Russia suffered.
In addition, by definition if the only way to bring manufacturing back to the US is by putting up import barriers, it means US manufacturing isn't competitive, domestically or globally.
Unless there is some hunker down period of isolation that'll make US manufacturing globally competitive somehow, all this will do in the long run is either isolate US manufacturers to the domestic market, or provide a temporary advantage that will disappear the minute the barriers are dropped.
> That uncertainty does not create stable markets.
Stable markets with bad outcomes are not worth defending on stability alone.
> It does not create very accurate business decisions
The business environment is not great. It does seem some part of that is the result of cheap Chinese goods that have displaced labor _and_ environmental costs flooding foreign markets. That China even uses proxy countries to push out even more is instructive.
So, if not tariffs, then what should we use to solve this?
Not imposing ludicrous tariffs based on flawed economics on the entire world at once?
Not imposing tariffs with no warning on your closest allies and attempting to bully them into submission?
Not imposing huge tariffs on some of the weakest nations you trade with (e.g. Laos, Vietnam).
Not changing trade policy radically every few days and announcing it on social media?
Not crashing the stock market, announcing a reverse on your social media platform, then boasting about how much money your billionaire friends made?
Not calling one of your largest trading partners peasants and the then very clever, alternating between insults and praise like a two-bit mobster?
This administration has made America a laughing stock; I don’t think many Americans realise just how much trust has been burned with allies since ‘liberation day’.
The simple fact Trump was voted in again denotes that the people of the US is not to be trusted.
At this point, it doesn't matter if Trump disappears into a void at the end of his term.
22% of people in the US voted directly for Trump. That's 22% of people that think his mode of operating is great presidential material.
I cannot trust doing business in a society with such a large proportion of either idiocy or malice, which includes wealthy and influential individuals!
The last 15 years has changed the fundamental stereotype of a US citizen. And while I personally know a few US citizens who are trustworthy, competent, lovely people, this marks an inherent bias in decision making.
From here, whatever Trump does is simply reinforcing the stereotype.
> The simple fact Trump was voted in again denotes that the people of the US is not to be trusted.
That might be the read, but it was people who were not happy with their lot in life and just saw same old same old as options while Trump was different. People in the US mostly don't think about the EU.
While I'd like to think lessons are learned, they swallowed/supported outrageous claims up to this point.
Cognitive dissonance suggests they have to keep supporting the current regime and whatever it says,because to change their mind is to realise the horror of what they've done.
Some Hacker News types like to bury their head in the sand when inconvenient political news occurs but to say this happened without warning simply flags you as part of this group.
> on some of the weakest nations you trade with (e.g. Laos, Vietnam).
There is room for these countries to buy more American goods. These two countries also rebadge and ship out a lot of Chinese goods to evade tariffs.
> changing trade policy radically every few days and announcing it on social media?
So, do you want warnings, or not?
> Not crashing the stock market, announcing a reverse on your social media platform, then boasting about how much money your billionaire friends made?
If you didn't make any trades during this period how was your portfolio actually impacted? I would assume this is the majority of non billionaire investors. So the only ones who lost in the crash were the same billionaires.
> calling one of your largest trading partners peasants and the then very clever, alternating between insults and praise like a two-bit mobster?
Does that trading partner also act like a two bit mobster? If so, wouldn't this just be turnabout, or why is deference to hostile economic partners justified?
> has made America a laughing stock
That's an absurdly biased point of view.
> I don’t think many Americans realise just how much trust has been burned with allies since ‘liberation day’.
Not much. They didn't actually "trust" us before. I'm not sure how you'd measure that anyways. From my reading of foreign news they're mostly taking it in stride, having seen this coming since last year, and not being particularly surprised by it. This zeitgeist only exists in half of America right now.
>They didn't actually "trust" us before. I'm not sure how you'd measure that anyways. From my reading of foreign news they're mostly taking it in stride, having seen this coming since last year, and not being particularly surprised by it. This zeitgeist only exists in half of America right now.
It's hard for me to overstate how wrong this is. In my country Denmark, everyone, everywhere is talking about this and people are generally worried. I hear it in the supermarkets.
We absolutely did trust the US until now. For instance, the entire Danish public sector runs on Microsoft. Nobody ever considered that to be an issue. Now there is political talk about how that can be undone. Several of my peers who read HN and considered US-based, YC-backed to be the ultimate way to launch a startup are talking about the liability involved. Mind you, this is not the typical "I hate America!" rhetoric that has always existed to some degree everywhere, this is risk management: "Can I trust that the US is stable enough for me to bet on?"
You may not think it matters because the US is as strong as it is, or maybe you don't care. But the trust and thereby soft power that has been destroyed in these few months is generational.
> It's a simple formula based on balance of trade.
It certainly is simple.
> Does that trading partner also act like a two bit mobster?
The US is comparable to the dictatorship of Xi now? I suppose the new leadership style is similar.
> From my reading of foreign news…
The very high level of these tariffs and their global scope and speed of imposition was a huge surprise to (former) US allies, and even to many in the US.
> It's a simple formula based on balance of trade.
"Simple" is why it put 10% on an island with no humans and no manmade structures separately to the country which owns that island, and also tariffed another island that's technically British but which the British leased to the US military.
"Simple" isn't what you want to decide a complex trade policy for a complex economy.
> That's an absurdly biased point of view.
Hello, I'm in one of those foreign allies. We are, in fact, laughing at USA for shooting itself in the foot like this. On the other hand, the bit where Trump is also refusing to rule out military force to annex some of us? We take that seriously.
> Not much. They didn't actually "trust" us before. I'm not sure how you'd measure that anyways.
We used to hold the US in high regard. "Leaders of the free world" etc.
But also, relatively stable economic position, stable currency, reliable government that repaid debts, etc.
Even though Trump 1 happened, we knew it would come to an end, and we thought you would finally be over it — especially given how it ended.
Now, we don't. And many of us will be looking to China as a more reliable (for us) trading partner.
* Lower corporate income tax to the global minimum of 15%
* Reshoring incentives
* Regulatory reform to remove barriers to building things
* Strict export controls around AI, robotics, and fusion
* Massive subsides for production of useful humanoid robots and deployment of useful fusion power generation
To the extent that tariffs are considered at all, it should only be if they're implemented with bipartisan support, selective with specific strategic goals in mind, gradually phased in, and explicitly long-term policy. Extreme tariffs without clear staying power are just disruptive for no good reason. They won't change business behavior; they'll just temporarily jack up costs, create an unnecessary customs backlog, and roadblock some commercial activities entirely.
Even if implemented carefully, I would argue that tariffs in general are counterproductive in the long run. If a domestic industry isn't internationally competitive, the goal should be to fix that, not insulate it from competition.
> So, if not tariffs, then what should we use to solve this?
I’d argue that tariffs that increase at a known rate are better than surprise large ones. Even a 1% increase a week every Monday for a year lets everyone’s supply chain adjust gradually. You’ll know within a few weeks how your product is affected and you’ll plan for the increase over the year. That’s probably still too fast though, since factories take time to build and the whole point is to encourage local manufacturing. Given the 4 year term trump could have gone for 3 years of increases with the hope that companies would start building factories and have them running by year 4.
Maybe start with smaller tariffs and go from there. But its not even worth defending current administration policies. Its either completely stupid or deliberately malevolent.
There is a deluge of experts in economics and other fields who clearly state this is not the right approach to bringing manufacturing to the US. Why wouldn't we trust experts in their fields?
That probably means its not a good strategy. Look at business activity, people are comparing it to early covid business conditions but its entirely self inflicted. You don't need to be an expert to see this is a failure. The assumption shouldn't be that Trump is acting in the interest of the average American or the American government.
If an entrepreneur is smart enough to figure out how to land a rocket ship on its feet, that person can figure out how to manufacture printed circuit boards economically in the US.
I'll add that the elites who pushed for earlier trade deals often did it specifically to get rich selling off America's domestic manufacturing and many jobs. Now, countries like China have them.
So, Trump's policies should be seen as an attempt to reverse for Americans' benefit damaging policies from before which are still active. Now, whether that will do good or harm in the long term is anyone's guess. We already see companies investing more in American infrastructure, though.
