alt Hacker NewsIt’s reasonable to want to bring back american manufacturing. But the random, temper-tantrum, market-manipulation tariffs are not going to do that. America isn’t going to all of a sudden produce tonnes and tonnes of xmas decorations every year just because of a 50% tariff on all chinese goods that may or may not be around in 6 months. All that’s going to happen is xmas decorations are going to be more expensive.
An actual plan would be targeting specific industries where america has the ability to scale up, and having congress pass tariffs that slowly ramp up over time to allow a smooth transition.
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It isn't just about that. You need industrial policy. And not just stuff like the CHIPS act.
In China a small outfit can get financing and open a factory anywhere.
You can't do that in the USA. You are too small for the lenders or investors who do such things to care yet too risky for traditional financial institutions to risk anything on you.
If I want to buy a couple of CNC machines and start making a product in my garage I have to hope I have enough room on credit cards to do it because I cannot get the money from anyone. Doesn't matter if I have a good idea. Doesn't even matter if I have some initial customers/orders.
If the government is going to piss away money then at least piss it away on that sort of economic activity. If you can present a coherent business plan or product design then lend people the capital secured by the equipment and/or IP with generous repayment terms. Set progressive milestones to unlock additional financing... for example give a gov backed credit account at SendCutSend. When you have an engineer's report on the prototype to turn in you unlock financing to order your first CNC machines. Develop a pipeline. A script to follow. Something a person can follow to get big enough to become a real business.
Grant time to pivot if necessary. If that doesn't work then ultimately the government takes possession of the equipment. Make it clear so long as you return everything in good working order then in X years you're eligible to re-enter the program. Then hand that equipment over to the next person in line.
An actual plan would look like the IIJA, IRA, CHIPS Act -- what Biden was doing, but act larger scale. The problem with globalization is not that free trade failed to create a surplus, it's that 150% of the surplus went to capital and -50% went to labor, which can and should be fixed with tax and spend. Instead, of course, we didn't tax capital and we spent the money on stupid wars. That said, good industrial policy includes tariffs too, but Democrats knew this! Biden wasn't allergic to tariffs! The 100% EV tariff (and EV subsidies and battery subsidies) happened during his administration. Aside from the fact that giving Elon everything he wanted was a massive political miscalculation, it was good industrial policy, we just needed more of it in order to affect the macro.
That's the tragedy of it -- Democrats in office understood the macro picture and worked diligently and intelligently to fix it, the spurned labor interests in the MAGA movement understood what had hurt them and correctly rejected it, but the former didn't know how to message to the latter so a demagogue swooped in and here we are.
The gonzo free-trade rhetoric of the Clinton era should never have happened, second best time to get rid of it was 10 years ago before Trump I, third best time was a few years ago before Trump II, but the fourth best time is now.
I don't think proposed plan with tariffs will be effective, because once scaled up and generating enough revenue, MBA will come and outsource everything, to make more money
Maybe even use the tariff proceeds to provide incentives to those very same domestic industries? (I am not an economist.)
> It’s reasonable to want to bring back american manufacturing.
Capitalism produces where it is convenient to do so.
And no politician can change it.
You can try to protect very few critical sectors, but not whole "manufacturing" which by the way keeps rising in US since ever.
What politicians want to sell is the "good old times of well paying manufacturing jobs".
Robots have long come for those.
The insane thing about this discussion is that America does still manufacture a huge amount of products that are used all over the world, and the people that make them are paid salaries that are the envy of the world! Many of the people working in this industry are posting on this site!
It's just that because those products don't come in boxes anymore but are distributed over the Internet people think they don't count?