THIS IS WHY TARIFFS NEVER WORK. In the long term tariffs actually encourage manufacturing to leave the country charging tariffs, not move manufacturing there. It’s much cheaper to pay the tariffs once, on the final product, than to pay the tariffs on every part that is required moving back and forth across an “imaginary line” (border in Trump-speak).
None of Trump’s tariff bolstering hurts Apple at all. They are a global company and can easily adjust around the asinine policies of America for a few years. Americans will get sick of paying a minimum of 25% more for EVERYTHING, while the rest of the world continues on as if nothing happened. Eventually Americans will see that the rest of the world has all the nice things and they’ve become a self imposed Soviet-era block country that has nothing and has to line up for toilet paper, and they’ll be right pissed. Until then, enjoy your delusion. 👏
The other problem with moving manufacturing due to tariffs is that tariffs can always be changed, whereas moving manufacturing is a longer term investment that can cost millions, if not billions when it comes to things like chip fabs. No one wants to make an investment like that, only to have their investment suddenly become worthless because some politician decided to change how the tariffs work.
Trump’s idiotic and constant flip-flopping on these tariffs have completely destroyed any chance of them actually accomplishing anything (not that they really had a great chance of that in the first place, but anyway…), because no one is going to move a factory to the US when Trump can and will change his mind based upon a whim or whoever is whispering in his ear that moment.
tariffs could work if you’re not the US. the problem is the US doesn’t make anything.
for normal countries you could use tariffs to encourage products made inside the country. but for that to haopen:
you need the products to already be manufactured inside the country
you need to have targeted tariffs that apply specifically to those products and not blanket tariffs that would apply to each and every part of product, which would make it infinitely more expensive to manufacture inside the country than outside.
so for example if your country has a decent production of bananas but people for some reason prefer to buy imported bananas way more than homemade ones, you might have some tariffs on bananas to try and reduce waste.
for that to be effective, you can’t also have tariffs on soil, farming equipment and whatnot that might be going into your homemade potato production. otherwise you’d have homemade potatoes more expensive then imported ones.
Pretty much every country, including US, has successfully applied targeted tariffs to specific things for specific reasons. Usually you’re protecting an existing industry, but you could even build a supply chain by balancing it with targeted incentives, and bringing them together with a long term strategy to grow that specific segment.
For example, we used to have a complex strategy for helping legacy car manufacturers transition to new technology. We had incentives to build a market, manufacturing incentives and other assistance, we had targeted loans and guided research to build the technology, obtain the resources, build the infrastructure, we had well targeted tariffs protecting them from specific “predatory” countries, and much more. In a decade or so, our legacy automakers would have transitioned to new technology, with at least similar manufacturing presence in the us and a strong global presence. It was slow, bumbling and inconsistent but it would have worked. Now we’re likely to end up with failing manufacturers unable to compete on the global market, and with their us market shrinking to nothing as they continue to focus on large, inefficient, outdated, polluting technology that can only be sold locally.
Tariffs can also be an effective way of balancing buisness advantages. An example: Germany has quite high standards in its farming sector. This applys to what pesticides you are allowed to use, how much fertiliser you can use, what conditions animals have to live in and so on. Everything that you have to do to comply with these rules costs money, so in order to still make a profit you need to charge quite high prices. If you then compare these with the almost non existent standards of, as example Brazil, you quickly realise, that they are capable of producing goods much cheaper (who could have guessed, that its cheaper if you can just imassively increase your land by land grabbing, giving a shit on everything and using the most efficient, but very cruel, ways to feed and hold your livestock). Due to this, beef that gets imported into Germany from Brazil, thanks to Mercosur without any tariffs, will be magnitudes cheaper than locally made. This kills your local farming sector and also does massive damage to Brazil’s citizen and enviroment (its a massive brainfuck how farming works there). If you want to counteract this you could charge tariffs, so that the consumer starts preferring locally made products, because they are cheaper. This also is an incentive for Brazil to better regulate its farming industry.
THIS IS WHY TARIFFS NEVER WORK. In the long term tariffs actually encourage manufacturing to leave the country charging tariffs, not move manufacturing there. It’s much cheaper to pay the tariffs once, on the final product, than to pay the tariffs on every part that is required moving back and forth across an “imaginary line” (border in Trump-speak).
None of Trump’s tariff bolstering hurts Apple at all. They are a global company and can easily adjust around the asinine policies of America for a few years. Americans will get sick of paying a minimum of 25% more for EVERYTHING, while the rest of the world continues on as if nothing happened. Eventually Americans will see that the rest of the world has all the nice things and they’ve become a self imposed Soviet-era block country that has nothing and has to line up for toilet paper, and they’ll be right pissed. Until then, enjoy your delusion. 👏
The other problem with moving manufacturing due to tariffs is that tariffs can always be changed, whereas moving manufacturing is a longer term investment that can cost millions, if not billions when it comes to things like chip fabs. No one wants to make an investment like that, only to have their investment suddenly become worthless because some politician decided to change how the tariffs work.
Trump’s idiotic and constant flip-flopping on these tariffs have completely destroyed any chance of them actually accomplishing anything (not that they really had a great chance of that in the first place, but anyway…), because no one is going to move a factory to the US when Trump can and will change his mind based upon a whim or whoever is whispering in his ear that moment.
tariffs could work if you’re not the US. the problem is the US doesn’t make anything.
for normal countries you could use tariffs to encourage products made inside the country. but for that to haopen:
so for example if your country has a decent production of bananas but people for some reason prefer to buy imported bananas way more than homemade ones, you might have some tariffs on bananas to try and reduce waste.
for that to be effective, you can’t also have tariffs on soil, farming equipment and whatnot that might be going into your homemade potato production. otherwise you’d have homemade potatoes more expensive then imported ones.
Blind, overall tariffs can’t work anywhere.
Pretty much every country, including US, has successfully applied targeted tariffs to specific things for specific reasons. Usually you’re protecting an existing industry, but you could even build a supply chain by balancing it with targeted incentives, and bringing them together with a long term strategy to grow that specific segment.
For example, we used to have a complex strategy for helping legacy car manufacturers transition to new technology. We had incentives to build a market, manufacturing incentives and other assistance, we had targeted loans and guided research to build the technology, obtain the resources, build the infrastructure, we had well targeted tariffs protecting them from specific “predatory” countries, and much more. In a decade or so, our legacy automakers would have transitioned to new technology, with at least similar manufacturing presence in the us and a strong global presence. It was slow, bumbling and inconsistent but it would have worked. Now we’re likely to end up with failing manufacturers unable to compete on the global market, and with their us market shrinking to nothing as they continue to focus on large, inefficient, outdated, polluting technology that can only be sold locally.
Tariffs can also be an effective way of balancing buisness advantages. An example: Germany has quite high standards in its farming sector. This applys to what pesticides you are allowed to use, how much fertiliser you can use, what conditions animals have to live in and so on. Everything that you have to do to comply with these rules costs money, so in order to still make a profit you need to charge quite high prices. If you then compare these with the almost non existent standards of, as example Brazil, you quickly realise, that they are capable of producing goods much cheaper (who could have guessed, that its cheaper if you can just imassively increase your land by land grabbing, giving a shit on everything and using the most efficient, but very cruel, ways to feed and hold your livestock). Due to this, beef that gets imported into Germany from Brazil, thanks to Mercosur without any tariffs, will be magnitudes cheaper than locally made. This kills your local farming sector and also does massive damage to Brazil’s citizen and enviroment (its a massive brainfuck how farming works there). If you want to counteract this you could charge tariffs, so that the consumer starts preferring locally made products, because they are cheaper. This also is an incentive for Brazil to better regulate its farming industry.