I could imagine, maybe, that if tariffs were 100% here to stay, that then, after some period of pain, lasting a few years, investors would have built replacement infrastructure domestically. (The word 'maybe' is doing a lot of work here, but let's roll with it, for the sake of argument.)
But this administration is already using tariffs as a negotiating tool, a cudgel. "If country X does Y, maybe the administration will cut them a break."
That means, as an investor, there is simply no certainty that makes it safe enough to invest in domestic US infrastructure. What if I build a factory and then the tariff evaporates?
Sure, a loom works anywhere, but a banana plant doesn't.
Raw materials are sometimes only available in some regions too, though this is a weaker argument because sometimes that is just because labor and complying with dumping regulations are cheaper in poorer countries.
There is probably no level of tariffs that make US labor competitive with $2-3/hr all-in with benefits China wages. That's before you even get into workers rights/legal/safety/conditions/etc. Note China is already hinting at devaluing their currency further as well.
And again with generationally low 4% unemployment and promises/attempts at mass deportations, who exactly are supposed to be staffing all these factories that are going to sprout up here?
Maybe the plan is fire enough people & make Americans poor enough they'll accept $3/hr?
Precisely, and more worrying, it may mean that tariffs implemented that way may only be effective if they are permanent. But once Trump is gone, the next administration will most likely drop the tariffs or at least scale back significantly. Which means that the market could be set for a much harder, much more durable crash. Tariffs are also a double-edged sword in the sense that all other nations will also boost their domestic production. This boost in production will remain even while tariffs are dialed back. Momentum alone will create uncertainty as to the nature of the world economy. We're in for a very rough ride.
To finish my thought: right now the market reaction is extreme, but it's fake in the sense that if tariffs were lifted tomorrow, the market would most likely go back to its former glory. In 3-4 years, once both domestic and foreign infrastructure has been built, it may not. If supposed massive investments are actually being made in US infrastructure, and that tariffs force companies to bite the bullet and stop producing abroad with cheap labor, what will happen when these incentives vanish? Will they go back to cheap labor? People will always prefer a 1k iPhone to a 2k iPhone. Especially if purchasing power has halved in the mean time. I'm expecting an extreme rubber band effect either way.
We should let Asian countries manufacture things like t-shirts, sneakers, bamboo baskets, toys and so on and sell them to us for almost nothing. If we made those things here, we wouldn't be able to afford them! Consider this: minimum wage in Vietnam is $200 per month!
What we should be doing is not bringing back manufacturing of such cheap things. Instead, we should manufacture things other countries cannot easily manufacture, such as Nvidia chips, Boeing airplanes, GE jet engines, heavy machinery such as from Caterpillar, medical equipment including robotic surgery machines, immunotherapy and other advanced treatments, gene editing and other biotech products, implantable medical devices, DNA sequencing, nanotech, satellites and aerospace tech, telecom equipment and so on. We can charge a premium price for these products because other countries cannot easily copy us.
Let other countries manufacture cheap things like toys and t-shirts. We'll buy their products low and sell our products high.
Now, a fair question to ask here is, what makes us uniquely qualified to manufacture such high-tech products and sell them to other countries for premium prices? The answer is our universities. Our universities attract the smartest students from around the world. And they stay here after getting their masters and PhDs. The answer is also immigration. We are able to attract the best and the brightest scientists and engineers from around the world.
Trump's mistake is spraying tariffs across everything without carefully evaluating what type of manufacturing we want to bring back to the US, and of course, disappearing immigrant university students under various pretexts.
Great question. This is punishing anyone but those in the highest bracket. Unbelievably stupid that people are losing thousands (or more) dollars because of one single orange chucklefuck. The other middle finger goes to Congress for sitting on their thumbs in a closed bathroom stall.
I'm sure I'll be getting my American-grown-from-America coffee any day now.
Kona Coffee! Hawaii. We bought some once, it was about $48 a pound (and a very long time ago). We all huddled around it and evaluated the taste, and honestly, we could not tell that it was that much better from Navy coffee. I guess it will be $96 a pound soon! We will become a nation of Tea drinkers.... oh wait!
TLDR, the last time the USA did this, it took decades and a world war to devastate almost everyone else to undo the damage and rebuild trust in the USA as a trading partner.
He doesn't have this power, but he declared a "national emergency" and put out an edict.
Legislators are supposed to review this and revoke it (and impeach him for abuse of powers), but Republicans are capitulating, ergo nothing can be done until someone with standing sues and it reaches the Supreme Court.
Then we have to assume they will rule it is unconstitutional, despite half of them being installed by him, and that he will listen to them.
That backs up exactly what I said? The president has declared a national emergency and started to use emergency powers. Legislation is supposed to review those actions now.
And it's not just tariffs, he's abusing this for a dearth of other topics. Want to cut down national forests? Nation lumber emergency. Want to mass deport people to an El Salvador prison without due process? National emergency.
I mean, that's emergency powers for you? They've always been reached for by the wannabe dictator. It's why they tend to be best implemented with tight timeboxing or oversight.
I could imagine, maybe, that if tariffs were 100% here to stay, that then, after some period of pain, lasting a few years, investors would have built replacement infrastructure domestically. (The word 'maybe' is doing a lot of work here, but let's roll with it, for the sake of argument.)
But this administration is already using tariffs as a negotiating tool, a cudgel. "If country X does Y, maybe the administration will cut them a break."
That means, as an investor, there is simply no certainty that makes it safe enough to invest in domestic US infrastructure. What if I build a factory and then the tariff evaporates?
Precisely. He is erratic and changes his mind, announcing plans via tweet. Who is going to make multi year capital commitments in that context?
Sure, a loom works anywhere, but a banana plant doesn't.
Raw materials are sometimes only available in some regions too, though this is a weaker argument because sometimes that is just because labor and complying with dumping regulations are cheaper in poorer countries.
There is probably no level of tariffs that make US labor competitive with $2-3/hr all-in with benefits China wages. That's before you even get into workers rights/legal/safety/conditions/etc. Note China is already hinting at devaluing their currency further as well.
And again with generationally low 4% unemployment and promises/attempts at mass deportations, who exactly are supposed to be staffing all these factories that are going to sprout up here?
Maybe the plan is fire enough people & make Americans poor enough they'll accept $3/hr?
There wouldn’t be any safety for that anyway.
A tariff as a negotiating tactic wouldn’t be worth much if it was known to be temporary.
Precisely, and more worrying, it may mean that tariffs implemented that way may only be effective if they are permanent. But once Trump is gone, the next administration will most likely drop the tariffs or at least scale back significantly. Which means that the market could be set for a much harder, much more durable crash. Tariffs are also a double-edged sword in the sense that all other nations will also boost their domestic production. This boost in production will remain even while tariffs are dialed back. Momentum alone will create uncertainty as to the nature of the world economy. We're in for a very rough ride.
To finish my thought: right now the market reaction is extreme, but it's fake in the sense that if tariffs were lifted tomorrow, the market would most likely go back to its former glory. In 3-4 years, once both domestic and foreign infrastructure has been built, it may not. If supposed massive investments are actually being made in US infrastructure, and that tariffs force companies to bite the bullet and stop producing abroad with cheap labor, what will happen when these incentives vanish? Will they go back to cheap labor? People will always prefer a 1k iPhone to a 2k iPhone. Especially if purchasing power has halved in the mean time. I'm expecting an extreme rubber band effect either way.
We should let Asian countries manufacture things like t-shirts, sneakers, bamboo baskets, toys and so on and sell them to us for almost nothing. If we made those things here, we wouldn't be able to afford them! Consider this: minimum wage in Vietnam is $200 per month!
What we should be doing is not bringing back manufacturing of such cheap things. Instead, we should manufacture things other countries cannot easily manufacture, such as Nvidia chips, Boeing airplanes, GE jet engines, heavy machinery such as from Caterpillar, medical equipment including robotic surgery machines, immunotherapy and other advanced treatments, gene editing and other biotech products, implantable medical devices, DNA sequencing, nanotech, satellites and aerospace tech, telecom equipment and so on. We can charge a premium price for these products because other countries cannot easily copy us.
Let other countries manufacture cheap things like toys and t-shirts. We'll buy their products low and sell our products high.
Now, a fair question to ask here is, what makes us uniquely qualified to manufacture such high-tech products and sell them to other countries for premium prices? The answer is our universities. Our universities attract the smartest students from around the world. And they stay here after getting their masters and PhDs. The answer is also immigration. We are able to attract the best and the brightest scientists and engineers from around the world.
Trump's mistake is spraying tariffs across everything without carefully evaluating what type of manufacturing we want to bring back to the US, and of course, disappearing immigrant university students under various pretexts.
Discussion (131 points, 2 hours ago, 178 comments) https://news.ycombinator.com/item?id=43605670
Does anyone have a good commentary on what's after what comes next?
Comrade, do you like bread? How about lines?
Great question. This is punishing anyone but those in the highest bracket. Unbelievably stupid that people are losing thousands (or more) dollars because of one single orange chucklefuck. The other middle finger goes to Congress for sitting on their thumbs in a closed bathroom stall.
I'm sure I'll be getting my American-grown-from-America coffee any day now.
It isn't because of one chucklefuck, is it? Congress is much closer to the mark.
"Who is more foolish? The fool or the fool who follows him?" Obi Wan Kenobi
How is it not affecting people "in the highest bracket?"
If you have $1 and you lose 75 cents, are you more or less impacted than someone with $100,000,000 who loses $75 million?
Less?
So you'd rather have 25 cents to your name than $25 million?
This is just like a regressive tax, which impacts the poor to not-so-poor more so than the ultra wealthy.
Kona Coffee! Hawaii. We bought some once, it was about $48 a pound (and a very long time ago). We all huddled around it and evaluated the taste, and honestly, we could not tell that it was that much better from Navy coffee. I guess it will be $96 a pound soon! We will become a nation of Tea drinkers.... oh wait!
https://www.npr.org/2018/04/05/599707003/smoot-hawley-tariff...
TLDR, the last time the USA did this, it took decades and a world war to devastate almost everyone else to undo the damage and rebuild trust in the USA as a trading partner.
https://www.stlouisfed.org/education/great-depression-online...
Sounds Great.
I don’t really understand where he got the power to impose arbitrary tariffs? Isn’t that reserved for Congress?
He doesn't have this power, but he declared a "national emergency" and put out an edict.
Legislators are supposed to review this and revoke it (and impeach him for abuse of powers), but Republicans are capitulating, ergo nothing can be done until someone with standing sues and it reaches the Supreme Court.
Then we have to assume they will rule it is unconstitutional, despite half of them being installed by him, and that he will listen to them.
Erm...
https://constitutioncenter.org/blog/how-congress-delegates-i...
I'd recommend some reading. Congress delegated a massive amount of discretion to the Executive over the years on this particular topic.
That backs up exactly what I said? The president has declared a national emergency and started to use emergency powers. Legislation is supposed to review those actions now.
And it's not just tariffs, he's abusing this for a dearth of other topics. Want to cut down national forests? Nation lumber emergency. Want to mass deport people to an El Salvador prison without due process? National emergency.
I mean, that's emergency powers for you? They've always been reached for by the wannabe dictator. It's why they tend to be best implemented with tight timeboxing or oversight.
Hell, sunset dates'd be nice too.
That’s one opinion. Lots of people disagree. https://www.economist.com/united-states/2025/04/05/how-donal...
I believe it is illegal, and I hope it gets challenged in court
tariffs?? its hard!! https://www.youtube.com/watch?v=uhiCFdWeQfA&t=57s