If they worked, we would see manufacturers almost instantly beginning construction on US factories, opening new ones and reopening shuttered plants.
I think the almost instantly is the problem there for me. If I was someone that could afford to build a factory, I know that it would take a couple of years to come up to speed. I also know that if the tariffs disappear, that my money is gone. It won’t work under “normal” conditions. So, I’ll want some assurance these will be in place for a while. Since no one will make that assurance, or at least someone who would would be lying, I wouldn’t feel confident enough to build anything.
I assume anyone with enough money to build a factory would think about some variation of that above. I think for that reason, no serious numbers of factories will get built. And, if none get built… what are we doing?
FuglyDuck@lemmy.world 4 weeks ago
why? it costs millions of dollars to construct new factories. Maybe billions, depending on the industry. It takes 7+ years to bring a new factory online. more to get all the kinks worked out and at full production.
Trump is supposed to be in office for only 4 years, at best, after which his tariffs will go away. it would be easier to simply just not ship to the US. which is how trade partners responded to the Hawley-Smoot Act in 1930, and which made the Great Depression that much harder to get out of.
nous@programming.dev 4 weeks ago
That assumes America is still a democracy in 4 years. We are only a few months in and it is already not looking great.
FuglyDuck@lemmy.world 4 weeks ago
and you think that’s an argument to spin up new factories? not really.
If the US collapses into complete fascism, everyone inside is either going to be cut off from the global market. for a foreign company, spinning up factories in the US, when, in four years, they might literally get those investments yeeted from them is stupid. and that’s really the best case.
nous@programming.dev 4 weeks ago
I never argued that. Only pointing out its decent into fascism. All bets are off at that point as to what will happen to its industries.
xavier666@lemm.ee 4 weeks ago
Not to take away from your point but they also have to
Once you have created this factory (which needs to be subsidized by the government in order to compete with the foreign product), we then apply targeted tarrifs so that people can slowly shift to the homegrown product. Doing all this can takes decades of careful planning.
Tarrif is not an ON/OFF switch which Trump thinks
yarr@feddit.nl 4 weeks ago
Yes, I think this is very wise. So, unless we are just saying “well, I guess this 3.7 years is a loss now…” that’s the end.
FuglyDuck@lemmy.world 4 weeks ago
that’s jut it, though.
They’re not saying the 4 years is a loss. the producers outside of the US… they’re just going to ship to new markets, and when things get less insane, then they come back. that’s all they need to do. Spinning up production in the US is expensive, costly, and it’ll take more time to complete than the whole reason for it will last- presumably.
and if it lasts longer than four years, that’s probably going to be even worse, because then, well, yeah. the best case scenario is you get to write off all those losses. Worst case? it can get whole hell of a lot uglier as you lose IP and find yourself competing against your own designs.’
So trump’s tariffs is driving imports away and killing local development of production at the same time.
to put it in the simplest terms, it’s fucking stupid.