Firms are just passing the additional cost of tariffs onto consumers rather than eating it and incurring an additional financial burden to reshore all their manufacturing?
What a fucking surprise
this post was submitted on 08 May 2025
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At some point the drop in sales from the increased prices would pretty much require them to move manufacturing back. We'll see if Trump increases tariffs further to try to cause that.
But yeah, there's a pretty big hurdle of actually needing to rebuild the manufacturing base in the US that we abandoned decades ago.
Of course the quickest way to do such a thing would be massive government investments (and central planning would be even better). It's funny how the "communist" policies they hate would actually achieve Trump's stated goals much quicker and more efficiently than the free market could.
But it highlights Trump's inconsistent ideology. Aggressive protectionism ("big government") to bring manufacturing back, but domestically leaving it up to the free market to actually do so, because "big government bad".
The issue at that point is that onshoring would be a decade-plus long project. Why commit to that when Trump changes his mind every twenty minutes?
It depends on how far Trump is willing to go. If he imposes 10000% tariffs or something and no one can afford to buy their products at all, their choice will be to shut down, abandon the American market (their largest market and where they are based out of), or onshore.
No. You're not thinking clearly. It's not just a choice. It's not just spending money. The machines to run the factories will need to be imported because we don't make them here. That means the cost of building a factory gets higher and higher as the tarrifs go higher and higher. That's a contradiction they can't easily escape from. But further, they couldn't get a factory with imported machines built in under 2 years, so it's easier for them to business putsch than it is reshore.
If they decide to build everything from scratch in the US, it would take a decade, and the raw materials would have to be imported.
No amount of Trump's arbitrary and capricious action can make this happen.
There is another secret option
Go bankrupt and let the consumers eat shit
That's shutting down.
I'm dumb and didn't read your comment properly
AFAIK 100% is already effectively cutting off all trade, anything past this won't make a difference; it's why China stopped raising theirs. Shipments have already entirely ceased.
These are hardly "American" companies, but global corps at this point. I'd expect them to move their operations to Ireland or Panama or something and abandon the unstable US market that way.
There is no reason for them to risk the capital if/when the tariffs are reverted in 3.5 years. The only way US could reindustrialize is with a long term (20 to 50 years) plan which provides funding and certain guarantees to the businesses who would have to do it. Or nationalize the industries and do it that way, like all the socialist countries do
For real though are there any actual companies rushing to start manufacturing in the US given how unstable it is politically and economically?
You'll probably see factories that are already functional add a shift or get some new machines to invest domestic production. Wholly new production? I doubt it.
No, you really won't.
The workforce just doesn't fucking exist. Factory labor struggles to recruit as it is. Half the existing workforce is made up of immigrants, and that's a conservative estimate.
As the supply chain starts breaking down it won't matter anyway, because even with increased demand for American made products, the difficulty we'll face in basic maintenance because most of what is used is imported is going to become a massive bottleneck.
Half the existing workforce is made up of immigrants, and that's a conservative estimate
Not to mention Trump is also enacting anti-immigrant policies making it even less attractive for immigrants to come in and be part of the workforce that the ruling class desperately needs. This is why I've always been saying Trump doesn't understand capitalism/imperialism.
Whether intentional or not, we are heading for a re-proletarianization of the labour aristocracy
Whether intentional or not, we are heading for a re-proletarianization of the labour aristocracy
Good tbh, that's communist party time
This is, and has been, already happening, regardless of the tariffs. The biggest difference is that now local manufacturing will be able to raise prices on domestic goods because the overall competitive market price has gone up. Fun stuff!
The majority of Mattel's factories have been moved to Mexico and the US a while ago, a little bit before Trumps IIRC (the one that stayed were the one where local government gave tax incentive to stay because of the economical contributions). North American jobs are mostly office work which haven't really moved.
I can't imagine any rational investor putting money into manufacturing in US in the current conditions.
Probably very few because most companies still source inputs from China so they either need to start pricing in higher input costs or decrease production while they hold off on orders hoping the tariffs are rolled back. Since this impacts basically everything, the inflation will hurt demand, so companies raising prices will also have difficulty selling, and not just because their own product's price went up.
This is basically a stagflation self-own.
Mattel took 5 years to evaluate (financial and logistics) if one of their manufacturing plants should move from North America to Mexico and China and it took an additional 2 years to move everything to the 2 countries.
Do people really think that Corpoes are not going to brace the impact when you have a president who changes his mind every 2 seconds?
and is at least nominally term-limited out in just over 3 and a half years
TrueYnon
Met him in real life when I used to work at Mattel, dude is an ex-idf sniper.
may justice catch up with him
I think we can trick trump to start sanctioning ceos who keep manufacturing overseas. Then we can sit back and watch them fight
Maybe that was JDPON Don's plan the entire time. He knew the CEO's wouldn't move manufacturing back to the US
haha
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Trump is trying to create American manufacturing? What a load of bullshit! The US is about as productive as my colon after I tried out that all meat diet. Are the factories just gonna spring out of the clear blue sky?What were they THINKING? 