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Ironically, one symptom of deindustrialization is that many commenters have never actually managed a physical business. So. Suppose your US company imports $1M of high quality parts, and adds in its own components to produce finished goods sold for $1.2M per batch. Your gross profit is $200k per batch. But wait! Suddenly a new 30% tariff is imposed on that $1M of parts. You now have to fork over $300k to customs before you sell anything. That’s cash you probably don’t have. Oh, and even if you do sell everything, you’re now losing $100k per batch. With a sinking feeling, you realize your profitable business which you somehow managed to keep in America all these years has suddenly become unprofitable. You post online about how bad this is but get shouted down by an angry mob, convinced that capitalists like you should die. You can’t tell nowadays if they’re on left or right. Moreover, you don’t have the time, money, skills, or tools in house to build that $1M of parts yourself. You are being asked to do the equivalent of growing a maple tree when all you needed was a little maple syrup. So now you are faced with several tough choices. (1) First, you may need to go into debt or fire people to quickly come up with the $300k in cash to pay for these surprise tariffs at customs. Even if the tariff might go away, it might not, so you have to get the cash somehow or risk having your shipment impounded. (2) Next, you might need to reduce quality to stop losing $100k on each batch. You could order the lower quality $750k parts, grimace and pay 30% tariff at customs, and hope you can build and sell for the same price of $1.2M per batch despite the lower quality. (3) Alternatively, you could keep the quality parts at $1M and instead raise prices to $1.5M per batch to get back your original margins of $200k per batch, which you need to pay employees after all. But that’s a big hike that your customer will probably not welcome, given that he’s likely dealing with his own tariff shock. So: these tariffs don’t really give an incentive to build in the US. Because it’s far more expensive to build a screw factory than to pay even high tariffs on a foreign screw. Instead what they likely mean is debt, layoffs, lower quality, and higher prices for any US company that buys parts abroad. Just to understand how common that is: Ok, say you do. It’s a 25% hike to go from $1.2M to $1.5M. You will lose customers. Maybe a lot. Maybe they go out of business at that price too. Moreover, you aren’t making more money. That extra $300k is going straight to Uncle Sam. It’s a tax on the manufacturing sector. “If the business model cannot support higher prices, it wasn’t a meaningful product to the consumer” I disagree. Grocery stores, for example, are famously low-margin businesses. Nevertheless, I think they are quite meaningful. They do low margins but make it up on volume. Think about how hard it is to build a single home in America. Now think about how hard it might be to build a giant factory in America. Point: you need deregulation and freedom cities / special economic zones first to enable building. Only then maybe highly targeted tariffs. When Reagan made Japan build cars in the US: (1) Wasn't hitting every country at once (2) Wasn't hitting every industry at once (3) Was targeted at big Japanese cos with $ (4) Was coordinated with US manufacturers This is one-billion-fold less targeted. https://t.co/JSNTJFhe8N But there's a big slide from "China is an enemy" to "China is non-American" to "all non-Americans are enemies." Phased-in sanctions on Chinese parts used in military supply chains makes sense. But broad-brush tariffs on Canadian maple syrup do not. https://t.co/XNdkQaG04h https://t.co/f6M98ObEWf This is not "starting the conversation." This is completing the deindustrialization. It's a targeted drone strike aimed at the supply chains of every business that still makes things in America. Because those chains cross borders many times. https://t.co/rrmBgxvhbX https://t.co/cyp3k5XdGo This is like a naval blockade of America, by America. Nothing gets in, without paying a huge fee. Nothing gets out either, due to retaliatory tariffs. Does cutting your own supply lines make you stronger? We'll see. https://t.co/DNIzGfwEtN Yes, because it is targeted directly at the sector of the economy it's supposed to help. The US factory must now pay (say) $300k in surprise tariffs on a $1M shipment. It's like a pre-sales tax. Vendor must pay before they can sell the finished product. https://t.co/nGG0eyQcjC Think about how crazy that is, though. Crash the global economy to make Powell cut rates?! Isn't he part of the government? Can't they just call him? I mean, of course I know the Fed is independent/etc But this just shows how dysfunctional the system is https://t.co/RdEjj80jcN Degrowth crowd hates tech & capitalists. Autarky crowd hates trade & foreigners. Both are driven more by anger than by any rational calculation of what's possible. They'll also regret the scarcity they romanticize, when it bites. https://t.co/YS0S94PLgJ