Comment on How can you oppose tariffs, while supporting a hardline against China on Taiwan?
SouthFresh@lemmy.world 5 days ago
Manufacturing is costly in the United States because enforced minimum wages, enforced safety protocols (enshrined in the blood of lost workers), and regulations brought about as a reaction to violations of those safety protocols by management of the local companies have necessarily increased the cost of manufacturing locally.
In a totally free market, the owners of the businesses would be “free” to abuse their workers how they see fit. Thankfully, most of the people in the U.S. have recognized that safety of workers is an important factor. The ability to enforce safety is likewise necessary when some company managers/executives have shown disdain for safety routinely.
The infrastructure required to implement the wages and safety has increased the cost to the companies in question. No business will last very long if increased costs aren’t passed on to their customers in some way. This leads to manufacturers having to face the choice of increasing the passed on cost of working within the U.S.'s regulations and requirements, or moving their manufacturing process to countries with lower standards of wages and regulation. Most companies have chosen the latter. If the purpose of owning and running a business is to increase the profit it makes, then additional costs to the business are necessarily not absorbed by the company and allowed to eat into profit
A tariff is likewise only seen as a regulation for which the cost will be passed on to the consumer by increasing the retail price of a product, and is typically seen as a regressive action.
If one wants to increase manufacturing in the U.S., one has to provide incentives for manufacturers to do so. margin, they are simply built into the final price of the service/product provided by the business. These incentives could take many forms, from tax breaks in some ways, to more favorable interest rates for specific loans (given criteria relevant to the specific market).
surph_ninja@lemmy.world 5 days ago
We’ve been trying the incentive method for decades now. It hasn’t worked.
SouthFresh@lemmy.world 5 days ago
Tariffs aren’t the way either.
The problem with incentives isn’t that they “can’t” work, it’s that they need to be at a level that makes using foreign manufacturing unattractive.
surph_ninja@lemmy.world 5 days ago
The problem is, they will leave the moment you cut off the incentive. So it becomes a permanent subsidy.
SouthFresh@lemmy.world 5 days ago
I don’t disagree with that, but it assumes the incentives are intended to expire. If the aim is to bring manufacturing back to the U.S., then one has to ensure manufacturing in the U.S. is profitable.
Tariffs do nothing for that.
mmddmm@lemm.ee 5 days ago
I see. So you are ready to try the “increase all costs” route now…
surph_ninja@lemmy.world 5 days ago
Personally I’m ready to try communism, nationalization, and a planned economy.