[duskwuff]

There's a third requirement which you've glossed over somewhat: a domestic manufacturer of that product needs to exist. For many of the products which are currently the subject of US tariffs, domestic manufacturing is nonexistent, or is itself impacted by tariffs on imported materials.

[AnthonyMouse]

> a domestic manufacturer of that product needs to exist.

It doesn't have to currently exist. If the tariff causes it to cost less to make it domestically to avoid the tariff then companies start making the product domestically, which is kind of the point.

[duskwuff]

That doesn't really work in situations where the industrial base doesn't exist for local manufacturing, and where building that would be likely to take much longer than the tariff will be in place (to say nothing of the costs).

The example I used in a sibling reply - LCD manufacturing - is a perfect example. Existing companies can't simply start producing those on a moment's notice - building the necessary facilities would take years, and would likely require a $1B+ investment. It's extremely hard to justify that when it's likely that the tariff situation would change before production even started, let alone before the costs were recovered.

[AnthonyMouse]

> That doesn't really work in situations where the industrial base doesn't exist for local manufacturing, and where building that would be likely to take much longer than the tariff will be in place (to say nothing of the costs).

a) There isn't actually a time limit on how long you can impose the tariffs. Nothing is preventing the next administration from continuing them if that's what's necessary to make it happen.

b) What about all the things where domestic production can be spun up more quickly?

> Existing companies can't simply start producing those on a moment's notice - building the necessary facilities would take years, and would likely require a $1B+ investment.

Apple by itself has a hundred times more cash than that sloshing around, to say nothing of the rest of the industry.

> It's extremely hard to justify that when it's likely that the tariff situation would change before production even started, let alone before the costs were recovered.

A lot of this is just sensible hedging. If building a domestic factory would require a price of $120 to have a sensible risk-adjusted return and China is selling for $100, you don't do it. But that's the sale price, not the unit cost. The unit cost might only be $50, you just need $120 to cover the initial investment and a competitive return.

If tariffs increase the sale price to $150, now it's profitable to build the domestic factory. Then if the tariffs continue you make a lot of money. If they go way, well, now you're selling something it costs you $50 to produce for $100 instead of $150 and it takes you longer to earn back your investment capital. That's not as profitable, but it's not like you're out of business. Which makes it a sensible bet to do it -- if the tariffs continue then you make out like a bandit and if they don't, your returns are only slightly below market instead of being well above, which isn't actually that much downside risk.

[mastermage]

in a globalized world might I add there is no such thing as a product only created in one country.

[duskwuff]

I don't know about "only created in one country", but there are certainly products which are only made in a few countries. One example is LCD and OLED panels - virtually all are made in China, Taiwan, and South Korea. As far as I'm aware, there is no large-scale fabrication of these parts in the Americas or Europe.

[addandsubtract]

Good luck creating Bordeaux outside of France.