[coderenegade]

I don't know that I agree with this. The US is too large a market to ignore, and this is effectively raising the profit margin for local production. Foreign companies will either move some portion of manufacturing to the US (for the domestic market), or cede the market completely, and I don't know that they're prepared to do that (well, maybe Chinese ones are). Factories have a long lead time, so even if this is abolished at the end of his term, they'll be locked in with sunk capital costs. The main reasons not to do this are a) abandoning the market, as mentioned, or b) you think you can hold out long enough until the political landscape changes.

If the people aren't there, wages will rise until they show up. Most labor shortages aren't an actual shortage of labor, unless you genuinely can't produce that skillset domestically, or your labor market is so tight that no one is unemployed; rather, they're a shortage of wages. Pay enough, and someone will do the job. This is especially true for low-skilled work. There is not, and never will be, a shortage of cleaners, for example, because anyone can do it, so as long as there are unemployed people and the wages are good enough, someone will do the work.

And even if these jobs aren't in running these factories, they've still got to be built. Money is a powerful motivator, so I have no doubt they will. Companies will bleed because of this, but there are clear benefits for the US working class even if they're paying more. The gamble is obviously that the benefits outweigh the negatives of higher prices overall. Modern economics says no, but modern economics also believes in service-based economies, and that countries should only produce what they're good at, which, eventually, becomes a repudiation of the nation state. No country wants to buy bullets from an enemy, even if they're cheaper, and the web of infrastructure and industry necessary to maintain a defense industry mandates that at some point, you abandon the theory. Which is to say: I don't know, but I'm also skeptical that economists do.

[sebastianz]

> If the people aren't there, wages will rise until they show up. [...] There is not, and never will be, a shortage of cleaners, for example, because anyone can do it, so as long as there are unemployed people and the wages are good enough, someone will do the work.

While this might be in a theoretical and pedantic way true, sometimes you do not have the economic context to provide those larger wages, so there will technically be no "shortage" - but just because the jobs themselves will disappear.

If you look at poor countries or regions, there is garbage, dirt and dilapidation everywhere. Clearly there is - in a practical way - a need for cleaners, but by your definition there is no "shortage" - because they cannot afford to pay anything for those jobs.

[mattlondon]

> effectively raising the profit margin for local production

This is the sad thing for US consumers.

If there is now a tariff on Product X that means instead of costing 100 it will now cost 125, I will guarantee you that the price for a locally produced competitor item will be 124.99 The local producers are not going to leave 25% profit on the table.

[franktankbank]

Why would it have to be that way? Are you imagining a monopoly on all locally produced goods? Why wouldn't there be competition with a healthyish margin? Seems entirely and 100% cynical.

[runako]

The point of raising a tariff on a $100 imported good to make it cost $125 is because the US provider cannot profitably sell for less than $125. The tariff doesn't magically fix the domestic provider's cost basis.

If the US provider was able to compete close to the $100 level (as they already have incentive to do!), there would be no complaint and no need for the tariff in the first place.

[franktankbank]

Well taking that 34% number as reference. You could have been brought from 0% margin to 34% with a penstroke. US manufacturers were ground down just to the level of being unprofitable for the last 4 decades, of course they are close to the break even level.

[runako]

Let's leave aside for a moment the notion that there are any significant number of US manufacturers making stuff for 0% margins.

So you suggest that increasing the tariff allows the US maker to increase their margin. We're not talking about them reducing input costs (in fact, the opposite in many cases), so the only way you could mean for them to increase their margin is by raising price. And to get the full benefit, you suggest they raise their price to match the price of the imports. And yes, this is what will happen, US makers will increase their prices because their low-cost competition is gone.

So you're now kind of agreeing with the poster you initially disagreed with.

(Of course, for many goods there are no US factories here and no reasonable ability to make the goods here at prices that would make sense, even accounting for high tariff barriers. So in those cases, consumers will just pay more for the same goods.)

[coderenegade]

Yes, but if the profit margin is now higher, it a) permits new competitors, and b) allows breathing room for debts to be paid off, and investments to be made that improve local capabilities. Like most things, tariffs can be good or bad. Yes, they can stifle innovation when there's no additional impetus for improvement, but they can also be necessary to protect local industries that are of strategic importance.

All industry exists in a web, and you can't just excise parts of that web without affecting the whole. The US has de-industrialized while its rivals have grown, and its global dominance is predicated on its technological and military lead. This de-industrialization was purely a function of financial incentives, whereby companies could juice their profit margins by seeking cheaper labor elsewhere, and skilling up foreign populations. But the bill for that is coming due now.

[Tuna-Fish]

No-one will move any manufacturing because people don't expect this to last long enough for it to make sense.

The congress can remove Trump's authority to determine tariffs at any point by declaring the crisis to be over. The Republicans have a knife-edge margin in the house and the most consistent two rules in American elections are that the party with the president loses some support in the midterms and that bad economic times means that the opposition party gains.

It would take years to move production, and next congress is 20 months away. There is no world in which this ends up good for the USA. Even if you believe that this is a situation where short-term pain leads to long-term gain, there is no way this will continue long enough for that gain to ever materialize.

[sorcerer-mar]

Yep, there will be a lot of promises for factories that should break ground in ~2028.

The White House has already demonstrated repeatedly it can't stick to its guns.

[foota]

> If the people aren't there, wages will rise until they show up. Most labor shortages aren't an actual shortage of labor, unless you genuinely can't produce that skillset domestically, or your labor market is so tight that no one is unemployed; rather, they're a shortage of wages

I don't know about this in the US. Sure, we're not at full employment, but I don't know how factory jobs are going to change that. My impression is that there is already a deficit in labor willing to work hard for good pay (construction, trucking, etc.,) and tightening immigration policies will make this even worse.

[coderenegade]

The definition of good pay is relative. Increase wages enough, and people will leave other industries, and new workers will join the workforce straight out of high school rather than going to university. Those jobs will be filled.

[foota]

Op is implying that there's excess labor lying around that with moderate prices (say, what you make in fields like construction, electrical work, etc.,) would be picked up. This isn't the case, or they'd already be taking the jobs in those fields that are relatively in demand.

I agree that if you paid people as much as software engineers to work in a factory you would certainly see disruptions in the labor market. I don't know what the market clearing price would be for factory labor sufficient to meet the US demand, but I don't think it'll be pretty.

[retrorangular]

To what benefit though? People in the US currently provide advanced services such as software sold to people everyplace, and people in developing nations are manufacturing cheap goods, sold to people everyplace.

After tariffs, people in the US are (maybe) manufacturing cheap goods, sold mostly only here, and developing nations continue to manufacture cheap goods for the rest of the world, and fewer people are providing advanced services such as software.

Overall, the world just becomes poorer and has fewer useful services provided. Yes, the US becomes less dependent on the rest of the world, but the rest of the world also becomes less dependent on the US. Material wellbeing of everyone is worse off.

But that's assuming all went to plan. In practice, it's hard to see how they would even achieve bringing manufacturing here through tariffs. Crashing the stock market is a sure-fire way to ensure the next administration (3.5 years away) will revoke them. You could install a dictatorship, but that makes it even less likely for companies to invest in the US. In practice, this will likely just make Americans poorer, but not bring any meaningful amount of manufacturing jobs back. Pretty much the epitome of "cutting off your nose to spite your face."

[iteratethis]

You say foreign companies will move manufacturing to the US or cede the market. You leave out the most likely option: everything will stay the same yet you pay more for your imports.

[Marsymars]

There probably isn't enough labour to onshore everything like you're implying.

The US currently consumes about half of its goods from domestic manufacturing. There are about 12 million people currently employed in manufacturing, and 7 million unemployed people. Matching the historical all-time low for unemployment rate would give around 4 million unemployed still.

> There is not, and never will be, a shortage of cleaners, for example, because anyone can do it, so as long as there are unemployed people and the wages are good enough, someone will do the work.

I mean, by that logic there's never a shortage of any profession. But in practice, I've seen what happens with a shortage of cleaners in a popular tourist town (my wife used to run a cleaning business) - it becomes nearly impossible to hire cleaners because everyone's salary in the area is inflated and people would rather work at an easier job. You run into persistent performance issues with your remaining cleaners - they're dishonest, simply stop showing up to work without notice, etc. You can't hire anyone from outside the area because there's no housing available other than dingy, overpriced basements. Holes get blown in the budgets of schools, hospitals, etc. because they have to contend with cleaning rates that are effectively set by the competitive market for cleaning AirBnBs.