You’d need a long term stable tariff regime for the investment required for that to happen.
The current administration has not proven itself to be stable. Even for their base they’ve walked back beneficial tariffs when the anticipated price increases happen (e.g. beef).
And that’s before you get into the constitutionality of their actions or how likely they are to be reversed with the next congress
This is correct. But the main argument against tariffs in this comment section seems to be "Waaah! You can't make me pay more" which completely misses the point.
I’m actually for trying to bring manufacturing back to the US. I’m for decoupling from (and hopefully weakening) China.
I’m entirely against Trump’s chaotic lunacy because it’s not going to accomplish any of the good things I’d hope for from such a thing. He’s got whole sectors treading water waiting for him to die, while smaller players simply shutter operations, because you can’t make huge capital investment decisions with this much uncertainty in the air. To say nothing of how bad an idea it is to try to decouple from China while also launching trade wars against your own allied trade bloc.
That means either a) making all clothes way more expensive for Americans, as our standards for labor and compensation are high compared to less developed countries, or b) lowering the standard of living in America such that we're forced to accept less pay for more labor.
Or C) deploying machines to do almost all of it (developing said machines if necessary). Which is more likely to actually happen than either A or B, even though the current regime is making it difficult. It also won't create very many jobs.
I believe this is the actual plan. They're forcing manufacturing back to America where we will automate the jobs out of existence. This isn't about creating jobs, it's about controlling production.
In a dark humor way, it is the intended effect by Trump but really, how many Americans dream of a sweatshop job?
Reminds me of a famously documented conversation between Cohn and Trump during the first administration (Bob Woodward's book):
Cohn starts assembling every piece of economic data to try and convince Trump that American workers did not aspire to work in assembly factories.
“See,” he says to Trump at one point, “the biggest leavers of jobs – people leaving voluntarily – is from manufacturing.”
“I don’t get it,” replies Trump.
Cohn soldiers on. “I can sit in a nice office with air conditioning and a desk, or I can stand on my feet eight hours a day. Which one would you rather do for the same pay?”
Trump still wasn’t buying it. Eventually, exasperated, Cohn simply asks Trump: “Why do you have these views?” “I just do,” Trump replies. “I’ve had these views for 30 years.”
“That doesn’t mean they’re right,” says Cohn. “I had the view for 15 years I could play professional football.”
Right, because that is a national emergency on the level of severity and immediacy of a foreign military invasion - which is the actual legal arguement put forward.
That might be the goal, but that implies the US should have low-skill labor, sweatshops, etc. And that enriching the owners of such factories is a good thing.
It's a net gain for everybody for low-skill products to be produced in regions with lower wages, like China, Vietnam, etc.
Super simple example... socks.
Due to lower wages, China can produce socks with a retail price of $1/pair.
A US-made equivalent costs $1.10/pair.
Trump placed a 20% tariff on Chinese goods, leading to Chinese socks having a retail price of $1.20.
US sock producer can now charge $1.19 and take 100% of the market. That's an additional, unearned $0.09 cents flowing to the owner of that sock business.
If the tariff had been set at 10%, creating equal retail prices, that might be good, as it would tend to shift more of the market to US-made socks.
Or, leave the prices alone, let us buy Chinese socks, and use that extra 10-20 cents for consuming something else.
I dunno. American nicer-clothes brands were already consolidating, selling to foreign buyers (J. Press, now Japanese-owned), or moving down-market and shifting manufacturing overseas (Brooks Brothers, Hickey Freeman). This certainly hasn’t reversed any of that.
I don’t have any particular insight into their operations, but all the ones that still manufacture in the US that I pay attention to seem to be showing signs of distress more this year than ever. Shrinking product lines, steep sales, desperate-looking promotions, shifting more of their catalog to imported lower-quality products (despite the tariffs!). My current concern is that tariffs are going to cut the legs out from under what remains of that sector, and there’ll soon be way fewer US-made clothing options.
I think broad prosperity is a ton more important to their health than tariffs. When people don’t have much disposable income they’re not going to buy American-made leather shoes and wool shirts and suits and fine cotton shirts, they’re going to pay the 100% (or whatever) tariffs on a $50 (pre-tariff) Chinese outfit made mostly of petroleum and still pay way less than for a hypothetical similar outfit made in the US.
US labor only makes sense for pretty-decent or better goods (it’s the reason it’s an alright signal of quality, doesn’t make sense to spend up for American labor then use shit materials to save a penny, if you’re using US labor you’re already priced out of the lower half or more of the market) and those markets are getting fucked as prosperity concentrates to the top.
I expect the next shock to what’s left of the middle class is going to kill a bunch of these companies, and tariff chaos is rushing us into that. Plus almost all of them use foreign goods or labor in parts of their processes, so this shit’s forcing them to raise prices or eat reduced profit. Pendleton? The cloth is made in a US mill, but the shirts are assembled in the DR or wherever. Rochester suit makers? The cloth is Italian or maybe British, obviously, or why bother. Can you even get US-made linen? LOL.
