Comment on How Will We Know If The Trump Tariffs Were A Good Idea?

jeffw@lemmy.world ⁨11⁩ ⁨months⁩ ago

• yarr@feddit.nl ⁨11⁩ ⁨months⁩ ago

  If they worked, we would see manufacturers almost instantly beginning construction on US factories, opening new ones and reopening shuttered plants.

  I think the almost instantly is the problem there for me. If I was someone that could afford to build a factory, I know that it would take a couple of years to come up to speed. I also know that if the tariffs disappear, that my money is gone. It won’t work under “normal” conditions. So, I’ll want some assurance these will be in place for a while. Since no one will make that assurance, or at least someone who would would be lying, I wouldn’t feel confident enough to build anything.

  I assume anyone with enough money to build a factory would think about some variation of that above. I think for that reason, no serious numbers of factories will get built. And, if none get built… what are we doing?

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  • bradorsomething@ttrpg.network ⁨11⁩ ⁨months⁩ ago

    I have two smaller businesses, and I’ve both laid off due to expected decrease in business and bought supplies ahead due to expected shortages.

    You’re good putting together that you wouldn’t build a factory right now because uncertainty doesn’t let you predict returns. Not only can you not predict the next president and their tariff policy, I wouldn’t say you can predict trump’s actions tomorrow. I heard an interview John Bolton did today, and he said something along the lines that “trump doesn’t think, he reacts.” Tariffs could be zero or 500% next month or next year or tomorrow. The safe move is to wait and see - and while everyone waits and sees, only small-scale production will start, definitely not enough to sustain demand.

    Honestly, if I had the money to build a factory right now, I’d park it and wait to buy one from a company that fails in all this. It would save so much money.

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• FuglyDuck@lemmy.world ⁨11⁩ ⁨months⁩ ago

  why? it costs millions of dollars to construct new factories. Maybe billions, depending on the industry. It takes 7+ years to bring a new factory online. more to get all the kinks worked out and at full production.

  Trump is supposed to be in office for only 4 years, at best, after which his tariffs will go away. it would be easier to simply just not ship to the US. which is how trade partners responded to the Hawley-Smoot Act in 1930, and which made the Great Depression that much harder to get out of.

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  • xavier666@lemm.ee ⁨11⁩ ⁨months⁩ ago

    It takes 7+ years to bring a new factory online. more to get all the kinks worked out and at full production

    Not to take away from your point but they also have to

    • product is at par with the previous alternative in terms of quality
    • your supply chain is willing to shift to your new product
    • healthy supply of workers OR
    • good automation in your production line (automation supply should also be sourced from within the country)

    Once you have created this factory (which needs to be subsidized by the government in order to compete with the foreign product), we then apply targeted tarrifs so that people can slowly shift to the homegrown product. Doing all this can takes decades of careful planning.

    Tarrif is not an ON/OFF switch which Trump thinks

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  • yarr@feddit.nl ⁨11⁩ ⁨months⁩ ago

    Trump is supposed to be in office for only 4 years, at best, after which his tariffs will go away. it would be easier to simply just not ship to the US. which is how trade partners responded to the Hawley-Smoot Act in 1930, and which made the Great Depression that much harder to get out of.

    Yes, I think this is very wise. So, unless we are just saying “well, I guess this 3.7 years is a loss now…” that’s the end.

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    • FuglyDuck@lemmy.world ⁨11⁩ ⁨months⁩ ago

      that’s jut it, though.

      They’re not saying the 4 years is a loss. the producers outside of the US… they’re just going to ship to new markets, and when things get less insane, then they come back. that’s all they need to do. Spinning up production in the US is expensive, costly, and it’ll take more time to complete than the whole reason for it will last- presumably.

      and if it lasts longer than four years, that’s probably going to be even worse, because then, well, yeah. the best case scenario is you get to write off all those losses. Worst case? it can get whole hell of a lot uglier as you lose IP and find yourself competing against your own designs.’

      So trump’s tariffs is driving imports away and killing local development of production at the same time.

      to put it in the simplest terms, it’s fucking stupid.

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  • nous@programming.dev ⁨11⁩ ⁨months⁩ ago

    Trump is supposed to be in office for only 4 years, at best,

    That assumes America is still a democracy in 4 years. We are only a few months in and it is already not looking great.

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    • FuglyDuck@lemmy.world ⁨11⁩ ⁨months⁩ ago

      and you think that’s an argument to spin up new factories? not really.

      If the US collapses into complete fascism, everyone inside is either going to be cut off from the global market. for a foreign company, spinning up factories in the US, when, in four years, they might literally get those investments yeeted from them is stupid. and that’s really the best case.

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      • nous@programming.dev ⁨11⁩ ⁨months⁩ ago

        I never argued that. Only pointing out its decent into fascism. All bets are off at that point as to what will happen to its industries.

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