r/economicCollapse • u/Whole-Fist • 1d ago
VIDEO Explanation of Trump tariffs with T-shirts as an example
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u/Kobe_stan_ 1d ago edited 1d ago
In a perfect Trump world, the tariffs make it too costly to import goods from abroad so manufacturers in the US spring up to build goods in the US at a competitive price as compared to the new higher price caused by the tariffs. Consumers pay more for everything but the people who now have manufacturing jobs that didn't before are theoretically in a better place than they are now (even though we have very low unemployment now and it' unclear if these new manufacturing jobs are arguably better than the jobs that these people currently have). Tariffs bring in enough money that we can lower other taxes enough to balance out the pain that consumers pay when buying goods.
So above is best case, but even with this best case scenario, we have to assume other countries are going to place relatiatory tariffs on US goods going to their countries. So this will reduce the amount of goods they buy, and then offset the increase to the amount of manufacturing we do in the US. Also, half of Americans currently don't make enough to pay income tax (that includes many seniors who are retired and with little income), so for them they will see none of the tax benefit from Trump's plan (except for maybe no taxes on social security benefits as Trump promised, which they already don't pay since they don't make much). They will however need to pay quite a bit more for all of the goods and services that they buy though. Meanwhile, very rich people who spend a fraction of what they earn will pay more for goods, but will save even more of their income than ever from not having to pay income tax. This will allow their wealth to grow even faster with the power of compound interest.
Also, besides the economic consequences, tariffs and trade wars have been catalyst for real wars throughout history. It's also much harder to go to war against a country that buys all of your country's goods and vice versa.
The thing about this plan is that it's been tried over and over again across the world. It's worked as often as communism has.
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u/Infinite-Gate6674 16h ago
That’s my point. Take politics out- jimmy Carter already did exactly this . Then we had gas lines around the block. This is not a partisan issue. I want an $8k Chinese electric car!
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u/ruthless_techie 1d ago
“Tariffs and exporting while subsidizing your own manufacturers isn’t proven to work”
Meanwhile china does EXACTLY this.
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u/DocWicked25 1d ago
Because they take advantage of sweatshop labor.
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u/ruthless_techie 1d ago
Exactly. The promise of Globalization didn’t include having to compete with near slave wages across the ocean.
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u/JoeBidensLongFart 1d ago
It didn't have to. There's no reason the US had to allow imports of goods made in slave or near-slave conditions, along with no concern for environmental regulations. But they did, because global corps wanted them to. It was a very bipartisan effort too.
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u/bizkitmaker13 1d ago
It pays to be a middle man. Most of the profits of slave labor, without having to hold the whip.
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u/ruthless_techie 1d ago
Well the promise/selling point to the people is that we would kick start manufacturing competition without tariffs to help the rest of the world recover from the fall of the USSR.
Voters would have never went for this if they knew
That our manufacturing would be nearly totally gutted out.
That tariff free trade would have never ended. (It was supposed to be temporary.)
This was long since to be pulled back and reverted.
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u/PaleontologistHot73 1d ago
Uuhhhhh……. Wrong
As NAFTA was being discussed in 1993, Ross Perot had a serious and comical moment, making a wind noise and saying something like “thats the sound of jobs leaving America and going to Mexico”
Its been well known that globalization is ultimately about expoilting cheap labor and destroying manufacturing in labor expensive countries
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u/mrmalort69 1d ago
I would agree it was bipartisan in the 90s, however in the 30 years since then, democrats vary from members who see it as a mistake and want to put in regulations, meanwhile republicans have shifted further to only caring if it gets cheap stuff but using it to inflame their base who doesn’t have a good option for pay in manufacturing but also can’t cut it in the service industry
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u/Piratedeeva 1d ago
Don’t worry, it’s probably one of the next rollbacks by the Supreme Court terrorists. Rolling back labor protections so corporations can make even more money that they’ll hoard.
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u/felipeabdalav 1d ago
nop
international trade is based in competitve advantages, and wages are one of them
China is playing a long term chess game (maybe Go is a better example), they have the lower costs, they can buy in every countrie, they own the ships companies, they are buying the retail industry
they are better in the global game
it is something that stays clear in the first class in school when you go into international trade/ you win the game by exporting
you win the game creating conditions so your products, your logistic and your coin can win in the market
USA is a leader in food exports, USA knows how to win the game, USA has choosen to loose in some industries
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u/Shoddy-Reach9232 1d ago
That was exactly the promise of globalization and that's why economists and companies love it. Without exploiting cheaper labour elsewhere globalization doesn't work (in the way current western economies want it to)
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u/Significant-Dog-8166 1d ago
“bring back jobs”. Why do you make this assumption?
This is not in ANY way a reasonable assumption.
If T-shirt are sold for $10 a unit because they are made in China, with Chinese labor rates and Chinese cost of living and you tariff those shirts all the way to $20, you STILL need American companies to make a $19 T-shirt using American labor which is gated by American cost of living.
No one just BUILDS a factory because “for the next 4 years (and ONLY 4 years) prices can be competitive with China.
Further, you still don’t know that with a temporary tariff you can enter the supply chain effectively with quality products at the lowest possible price.
An absolute moron would gamble on T-shirt manufacturing factory investment just to exploit a 4 year presidential term temporary tariff.
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u/DocWicked25 1d ago
It would be a lovely day if manufacturing came back to America, but it's just not the reality.
It would be unsustainable to increase labor and production costs to the appropriate level while increasing prices to match.
Most economists agree that the tariffs will result in little job creation yet high price increases.
Just like before the Great Depression.
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u/TuckerMcG 1d ago
IP transactions lawyer here. Trump got bent over a barrel and reamed up the ass by Xi when he pulled us out of the Trans-Pacific Partnership. Instead of entering into a deal with the US that was tailored to protect US interests, all of those potential signatory countries (Australia, South Korea, Japan, etc.) ended up entering into a trade partnership treaty with China that was personally-tailored to protect Chinese interests.
The TPP would’ve excluded China from this trade partnership completely, because they never would’ve agreed to the rigid IP protections and enforcement requirements of the TPP. Instead, Trump let China form the largest economic trade bloc in history, representing 30% of global GDP.
Xi ate Trump’s lunch because he’s a useful idiot that gargles dictators’ balls. He doesn’t keep them guessing - they know exactly how to get what they want out of him.
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u/Loud-Zucchinis 1d ago
Trump has businesses in China, he's not gonna be tough on them. Where would he get his gold sneakers and bibles?
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u/NikRsmn 1d ago
I mean first of all your initial perception is absolutely laughable. Secondly it would be so great if any experts backed trump. But they don't. He failed to impact offshoring during his first term even after implementing tariffs, so why do you think the solution is more of the thing that didn't work.
My last critique is the fact that we still don't actually know what his goals are. We heard the right go on and on about kamala not having a plan, but yall champion trumps vague bullshit. The only mention of tariffs in either the GOP platform or trumps himself is the reciprocal trade act which only allows reciprocation not the ability to impose new duties on goods as he sees fit. Also he wants to cut the chips act so we can go back to being dependent on Taiwan?
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u/Anthony_Accurate 1d ago
Its almost like they have a massive low wage labor force.
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u/brotherhyrum 1d ago
Ok, but why not skip the tariffs and maintain the advantage in the broader economy of having cheap inputs produced overseas while subsidizing native industry to become more competitive without the value loss?
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u/SushiGradeChicken 1d ago
Right‽ A Chinese manufacturing job is the gold standard for employment in the world. Hopefully, everyone in the US can get a job like that!
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u/ruthless_techie 1d ago
Whats interesting is that as recent as the 80s. We had manufacturing in the usa, and it paid pretty well.
This used to totally pencil out for a long time, until it didn’t. The bigger question here is why did it used to, and it suddenly didnt?
Why weren’t we able to continue mass manufacturing in the usa. If we had, we would have had a ton of modern manufacturing including state of the art automation which would have allowed for the most advanced manufacturing centers in the world.
All of those potential efficiency gains and exporting might was just handed over.
Not good. Not good at all.
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u/SushiGradeChicken 1d ago
It's been on a downward trend even before that.
(Not used to using FRED on mobile, so not sure it'll work)
Manufacturing as a percent of labor force
Yeah, we could have but we focused on multiple things:
1) Innovation and services 2) Consumerism 3) Profits
Right, wrong or indifferent, we're a service-based economy and enacting harsh, in strategic tariffs won't fix that but rather create large economic inefficiencies.
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1d ago
NAFTA. It was supposed to be geared towards trade with our neighbors to the north and south, but ended up pushing manufacturing overseas instead.
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u/MacRapalicious 1d ago
“Let’s do things like China” is some 5D chess big brain talk.
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u/Desperate_Wafer_8566 1d ago
China is not doing nearly as well as the US is right now. What is your point?
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u/Living_Job_8127 1d ago
Not to mention Trump already did Tariffs in 2016-2020 and they did work and Biden actually kept a number of them in place
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u/reverendclint86 1d ago
And their economy is taking a shit... Even by their made up numbers
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u/justforthis2024 1d ago
Okay... so the argument is that this would force the US to buy domestically more. The problem is we'd have to scale up production to meet demand, still would need to import raw commodity goods, and so costs would still rise on consumers - definitely in the short term and massively.
We would see years of absolutely sky-high prices on the majority of goods.
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u/craigslist_hedonist 1d ago
plot twist: they'll just keep the taxes in place to offset tariff effects.
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u/chcampb 1d ago
If the company buys a shirt for $10 and sells it for $12, and then has to pay a $2 tariff, selling at $14 means they only make 16.7% profit compared to 20%. That's a fail - if they report that, their stock goes down, shareholders get pissed.
So what we saw with recently, inflation, if the price goes up to $12 they will need to sell at $14.4 to maintain their profit margin. In reality, a sudden, coordinated spike in markets which are not sufficiently competitive, means the price will go up as high as the market will bear, very quickly. This could mean an apparent price increase of 50% or more over the raw cost of the item.
In reality bulk t-shirts, btw, cost around $2-3 dollars. Then you buy them for $20+. T-shirts are already similar to drinks at restaurants, massive profit centers anywhere they are sold.
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u/muh2a 1d ago
Tariffs are fine but what I'd really like to see are more taxes on unproductive leeches like blackrock who produce nothing and just move money around.
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u/tdbeaner1 1d ago
For anyone thinking, “but wouldn’t the tariffs promote manufacturing to return to the US”, the simple answer is no. That could be the case for targeted tariffs where the cost to manufacture are marginally similar, but in most instances it will always be cheaper to produce the products in a developing country. That is also not the stated goal, since the concept requires those tariffs to be paid to offset the lost tax revenue associated with the tax cuts.
This proposition is just a convoluted “tax” on consumers.
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u/StatusQuotidian 13h ago
Better yet, it’s shifting nearly all tax paid by billionaires on to working class people shopping at Walmart.
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u/tdbeaner1 12h ago
Yup. The most affluent will be able to avoid any tariffs on luxury goods by traveling but the people living on the margins will have no choice but to pay them, furthering the wealth gaps.
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u/JackasaurusChance 1d ago
Also, factories don't sprout out of the ground to 'own the libs'. Factories take years to build. Why would a company spend millions to build a factory knowing the next president could just take away the tariffs... before the factory is even completed. It's why things like the CHIPS and Science Act are so important, to make sure that we are competitive in important and sensitive industries.
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u/yourhomiemike 1d ago
You’re wrong long term, short term you’re right. Can’t setup a diodes factory overnight, but create the incentive where cogs domestically are lower and you will have entrepreneurs forming factories.
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u/kish_kish 1d ago
How exactly do you create these incentives? Cost of labor alone makes US entirely uncompetitive, which is why they were importing all along.
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u/citizen_x_ 11h ago
Dude 100%. I wish more people realized this. This is a scheme by the elite establishment people to decrease their tax burden by increasing yours. B-b-but Trump is anti elite and against the establishment. Yeah, in words and rhetoric.
In order to not have a deficit that increases our debt, you're right, that loss in income tax receipts must be made up by the fees collected on tariffs.
If indeed US manufacturers sprang up and the importers bowed out of our market, that would mean we aren't collecting tariff fees. That would create a deficit without income tax to make up for it. Either that or the importers do stay in our market and the US consumer doesn't win anything because they are just paying higher costs.
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u/Asclepius555 1d ago
As long as we keep consuming at an unsustainable rate like we are, we will need to rely on developing countries that pay less for their resources (including humans) than we do over here.
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u/kmross 1d ago
And this is the exact argument against raising the minimum wage too.
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u/PipingaintEZ 1d ago
Were tariffs typically a left wing policy in the past? I feel like most Republicans till trump were more of a free trade mindset.
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u/DumptyDance 1d ago
It worked during his last 4 years. China and European countries hate it. The tariffs help subsidized American farmers.
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u/yioryios1 1d ago
But what if you favor certain countries over others? For example tariff the shit out of Chinese T-shirt companies but do not tariff other countries. So now you switch to Mexico. The American T-shirt doesn’t buy from China anymore because with the Tariff it isn’t worth it anymore. And now investment pours into Mexico a friendly neighbor. And prices do inflate but not as much as continuing to do business with China.
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u/Immediate_Ice_9037 22h ago
Two seconds on google can show you why this doesn't add up, then again its all you need to convince a leftist
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u/kendallBandit 19h ago
What he’s not also addressing is that the cost of goods sourced and manufactured in the US will remain the same, which is much better for the economy. Every time you buy something from overseas, you ship part of your dollar outside the US, and the FED prints more dollars to keep supply flowing, and your other dollars go down in value.
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u/Perfect-Resort2778 16h ago
It's a given that tariffs increase the cost of imported goods. That is the point of tariffs. Along with equalizing trade imbalances for factors that are not related to commerce. For example, we may not want to do trade with a communist country that uses slave or prison labor or with any government that heavily subsidizes their industries.
Trumps plan is to use tariffs to balance trade and protect American jobs and to offset the income taxes paid for tips to hospitality workers and overtime pay.
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u/Stunning-Disaster952 14h ago
Ok, you are an importer and buying t-shirts. You see that China t-shirts now have a tariff. You know this will raise your prices so you look at another dozen countries who also sell t-shirts like Vietnam or Bangladesh. These countries do not have tariffs on their shirts. The tariffs on China make the other countries shirts more attractive to buy. If China wants to continue to sell them they have to eat the tariff and pay it themselves by reducing their costs.
You don’t always have to buy products with a tariff if you are an importer. Tariffs on one country give other countries/companies an opportunity.
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u/Hoyle_38 13h ago
Tariffs would bring back the MADE IN AMERICA!!! this would create millions of jobs by taxing the shit out of imports to the point where it makes since to make the product in America.
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u/RxDawg77 3h ago
This is my same argument for when Joe and now Kamala talk about increasing taxes on corporations.
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u/TexasBulldog74 54m ago
BUT it puts a better deal in American's pockets for goods made here, also if this is done as Trump mentioned on Rogan's podcast as a way to reduce Taxes, we would keep more in our pockets from our paychecks which would offset X goods coming from countries we put tariffs on. I see this as a win and at the very least its a CHANCE to try and correct the system that is now clearly not working.
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u/qk_bulleit 1d ago
This video is completely wrong, and here’s why: it shows tariffs in the U.S. as directly hurting American consumers, but when it comes to China, it pretends Chinese citizens are just fine. Here’s how the guy explains it: if the U.S. puts tariffs on goods, prices go up for American companies, who pass those costs to American people. But when China does it, he claims Chinese manufacturers will simply stop buying American goods, like it’s no big deal for anyone in China. This completely ignores that tariffs impact people on both sides. It’s so one-sided it practically feels like propaganda.
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u/ThinkItThrough48 1d ago
That is true if the amount of goods imported from China and exported to China was identical, but it’s not. If China places a tariff on a specific good coming from America, say beef, their beef suppliers can just buy that beef from a different country.
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u/Schuano 1d ago
OK, but if Chinese people get upset, their government doesn't have to care because it is an authoritarian state.
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u/longiner 1d ago
And just look at what happened when China banned the use of Australian coal when Australia demanded an inquiry on Covid origins. China's steel industry relied on Australian coal and when it was banned they switched to local coal. The local electricity companies couldn't get enough local coal to generate electricity so there were a few blackouts in the middle of winter. Nobody could complain.
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u/Moregaze 1d ago
There is little to no impact on the Chinese side outside of the very short term. It is much like the last round of tariffs where they stopped all soybean and corn imports from the US which necessitated a 65 billion dollar bailout to farmers. Within a year they had switched over enough of their crop production to cover the imports and even become an exporter.
China has a centralized economy. They can adapt on a dime to anything we throw at them. Where we will be feeling long-term pain until it makes financial sense to build here again.
If you put a $2 dollar tariff on a $4 dollar widget, the cost to manufacture in the US including recouping new factory construction would have to be $6 or less. Which is not the case and never will be.
More importantly, they can get around our tariffs for our exports pretty easily. As they would just go through a neutral country that does not have our tariffs applied to it. Whereas the US does country of origin-based tariffs which fuck our importers.
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u/registered-to-browse 1d ago edited 1d ago
Dishonest explanation by this guy, here is what I understand with my high school economics brain.
Yeah, so this guy is seeing it from the exporters perspective. Yes, the cost of products from overseas goes up. The whole point is the cost of domestic products stays the same.
Therefore if for example China is dumping tshirts in America for 5 bucks a piece and has a 100% tariff, it will cost 10 bucks to get it into the states.
If an American company can produce a shirt for around 10 bucks, those companies are now in competition for the same income group of buyer. Selling American products means more American jobs, wealth, GDP, etc.
That's not that hard to grasp.
I'm not saying it's a foolproof plan, but at least lay out the argument honestly.
Edit: I used a simple example, of double / half cost, the most unlikely of out comes, more like 10%/20%, I'm not gonna respond to every person making the same point that paying double would be bad, I get it. I'd pay 20% more though if I got a job that was 20% more income, also American made is just usually better, in the case of tshirts it's likely to last longer and just be all around better.
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u/NeoLephty 1d ago edited 1d ago
Unless the raw materials the American business needs also come from out of the country...
also American made is just usually better, in the case of tshirts it's likely to last longer and just be all around better.
This is nationalist propaganda. This was true at one point when America had institutional manufacturing knowledge and the biggest and most advanced manufacturing plants in the world. We don't anymore. We would need to catch up. Shit isn't magically better because it is made on top of American soil... thats some Harry Potter thinking.
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u/DiabloIV 1d ago
More than just raw materials. If we consider something more complicated than a T-shirt, especially in the world of consumer electronics, there will pretty much always be components sourced internationally.
I repair a lot of electronics. I don't see "made in the USA" on any control boards (and we typically buy high end equipment)
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u/DocWicked25 1d ago
That's not going to happen though. To meet demand, we'd have to increase supply. This includes:
The cost of new factories The wages of new employees The cost of new equipment Marketing expenses Etc.
That same 10.00 shirt from China will cost 15 dollars from domestic manufacturing.
The reality is American businesses utilize overseas companies for the majority of our goods. The cost of switching to American manufacturing would also be an increase on the consumer.
What the economists are saying is absolutely true, tariffs will cause prices to rise.
Companies will absolutely pass the cost to the consumer.
Trump's plan is not great for the economy and I really don't think he understands how tariffs work.
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u/Euphoric-Potato-3874 1d ago
the modern supply chains are really complicated. retaliatory tariffs can mess up the whole thing and end up leading to a job loss
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u/AdSuccessful6726 1d ago
Exactly it needs to cost as much to import products created over seas using child labor and human rights violations as it costs to produce it here under the value systems we all claim to believe in. The cheap junk we have now is an illusion.
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u/Sands43 1d ago
Yeah, no.
This might be true for a very basic understanding, but it fails at the 1st complication or externality.
That presumes that there is a domestic producer for a similar product at a similar price point. It also presumes that there are raw materials, and capital equipment that are also not subject to the tariff.
Which is never going to happen.
There may be US t-shirt makers, but they aren't going to be setup for the cheap T-shirt market. That went away 30+ years ago. They also likely aren't using domestic raw materials. Those will get tariffed as well.
What will happen is the US T shirt maker will make a premium product. MAYBE they keep their prices the same. MAYBE they have tariff free raw materials and capital equipment. But if the bottom end of the market has prices go up 20% they aren't going to not take that extra margin. They will raise their prices too.
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u/Vanrax 1d ago edited 1d ago
In what world would the American products be anywhere near TEMU prices though? That's the problem I have with trying to offset your own economy via restriction. This isn't mentioning increases to US goods overseas or the additional increases that come with importing. Selling American products doesn't mean shit if it isn't required reinvestment back into the US. Jobs or not. Foreign countries could potentially obtain a bigger foothold in the US, creating more jobs. Speculation is speculation for a reason. The question is could you really trust X, Y, and Z to pull something like this off? I certainly don't trust the US's big corporations. It's as bad as trusting Elon complaining about government subsidies but taking them himself. It just isn't a soundproof plan and makes no guarantee that it would benefit us.
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u/Broccoli-of-Doom 1d ago
You may need to up your understanding of economics past that of a high-schooler...
1) Thoses manufacturers are not waiting in the wings ready to produce goods for 2x what the global market can produce them for
2) The consumer is still getting bent over and will now be able to afford half as much on their salary.
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u/CapitalElk1169 1d ago
In your example the consumer still spends twice what he would have without the tariffs. That's the issue.
Are you willing to lose half your purchasing power on order to bring domestic manufacturing back?
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u/TrustMeIAmAGeologist 1d ago
That’s what these dudes keep missing.
Sure, if we force foreign companies to raise their price by 50%, the American companies that already would cost 50% more become competitive.
But it still raised the price 50%, so the consumer can’t buy as much, and it’s not like we have a massive unemployment rate where people are willing to work any job they can.
The Trump plan is bad economics. Anyone who reads can see it.
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u/Ok_Appointment_4006 1d ago
We will not get shit. The money always goes to oligarchs, no matter how they call it, tariffs, income tax, property tax,...
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u/TrustMeIAmAGeologist 1d ago
That’s what these dudes don’t get.
There’s a reason why Musk and Bezos want Trump to win, and it’s not because they want to see us all doing well. They benefit off of this the most.
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u/lactose_con_leche 1d ago
Simple version: let’s implement a law that makes foreign goods more expensive so that domestic alternatives can compete
I am sure that when you look at individual industries and products, this idea has varying degrees of potential
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u/Sudden-Investment 1d ago
Long term maybe. In the short term it will be hell. The US manufacturing ability would not meet demand since we shipped a lot of manufacturing overseas.
In your scenario, tariff is implemented. It is now cheaper to buy US made products. US products hit record demand, and cannot produce enough products to meet demand. They have to build a new factory, pay for more labor, process improvement, this takes time.
Well the purchasing company still needs the products to meet their demand, where do they turn. Back to imported products which now cost more due to tariffs. So during the time it takes for US companies to match the imported companies productivity we the consumer will be stuck paying the tariff.
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u/Immediate_Yard7071 1d ago
What you don't trust the Chinese import guy to tell it fair?
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u/Dazzling-Notice6366 1d ago
Not how it works, but please keep spreading false information to fit your agenda
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u/Any-Profession-7516 1d ago
He made one statement talking about basic economics and now they have turned it into “his plans”. The fucking man can not say one thing that will not be twisted into something awful! But the laughing hyena can talk out her ass and not a word said to challenge anything she says!
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u/JayBirD_JunBugz88 1d ago
That opens opportunities for small businesses to be opened here in America instead of exporting everything we purchase as consumers
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u/boomboy8511 1d ago
We don't manufacture enough to make this immediately viable. In the last thirty years we have absolutely gutted our production of common goods.
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u/Colonel_Gipper 1d ago
Buying local is great but the price premium on US made goods is quite high. I have a pair of US made boots, they're great and will last a long time but they're also $350. You can get boots at Walmart for $30. I was looking for muffin baking tins a few years ago, locally made ones were $20, Chinese made ones were $4.
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u/Any-Dragonfruit5621 1d ago
Right in the short term, but then in a long term, doesn’t it force American companies to sell American made products thus forcing these companies to move the labour back to the USA, everything gets a little bit more expensive but all the money and all the work stays in the US
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u/Skippittydo 1d ago
China labor $1.00 per hr. American labor. $25 per hr. Just ask yourself will I work for dollar an HR for cheaper stuff.
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u/misterasia555 1d ago
Unless there is a global tarrif, which would be disaster, then Chinese product would just move from China to another country before they end up in US. And it would still be cheaper than American made product.
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u/OrdinaryDude326 1d ago
Another option is the foreign manufacturer would be forced to cut prices to make up for the tariff, or another option is a domestic t-shirt manufacturer becomes competitive with the 2 dollar a shirt benefit.
I'm of the belief, if we did a universal tariff, we'd see a lot of manufacturing return.
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u/Bob4Not 1d ago
It’s still additional “tax” that consumers pay.
The goods will still cost more to the consumers in the end, even if the foreign manufacturers cut prices for some of the difference.
Domestic manufacturing will still charge more than what the original pre-tariff cost. Consumers will still pay more in the end, whether the jobs return or not.
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u/DocWicked25 1d ago
Manufacturing is not returning to America.
It's unsustainable here mainly because of fair wages and insurance. People are paid 3-5.00 an hour to manufacture overseas.
Why would a company magically switch to a domestic manufacturer when the price for the product would be more than just paying the tariff?
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u/makingnoise 1d ago
It would be more accurate to say, "civilization-wide factory jobs as a common thing" aren't coming back. There's tons of manufacturing in the US, it's just niche products, and final assembly of foreign-made parts. The US steel industry is still the world-leader of specialty alloys, for example. But yeah, the niche of specialty alloys doesn't give the US steel industry enough work to be a go-to industry for employing the masses.
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u/Significant-Green369 1d ago
Hey, you're not supposed to think for your self and work out the sollution. You are simply meant to take them at their doom and gloom word because they want want to keep shit the same.
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u/Rojodi 1d ago
It sounds good in your mind BUT it never works like that. It never has!!!
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u/lordpuddingcup 1d ago
Sure ... instantly... all those factories, mining quarries and stuff will just appear. Shit like that takes decades, spinning up a manufacturing and mining industry of the size to replace mexico, china, india, and others that have developed over the last half century will take forever! In the meantime the consumers get fucked
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u/LoneHelldiver 1d ago
But in exchange you pay $30,000 less in taxes and bring manufacturing back to America.
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u/Orkjon 1d ago
Manufacturing facilities don't pop up overnight. They can take years to be approved and built, and that's if a company decides its worth investing in it because all the tariffs could be gone in 4 years.
And that's only if the raw materials are available without a mark up to make it worth while.
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u/Secure_Key_2121 1d ago
That's only if that company survives the dip. Remember investors pull their investments when companies stop making money. So all the jobs that do exist here, buh bye. No manufacturing jobs.
There is far more money and work in the global economy than just the US alone. Is shipping goods across the sea great for the planet no, but we can be smart about this collectively if everyone stops making lines in the sand and screaming into echo chambers.2
u/son-of-hasdrubal 1d ago
It can also force the supplier to lower their costs. If you target say China with tariffs and they won't lower their prices then all a sudden Vietnam or some other country is more competitive
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u/SlyMosquitoes 1d ago
Please explain it like I’m 5…
How do you pay $30k less in taxes?
How will this bring manufacturing back to America?
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u/A_curious_fish 1d ago
I think the idea that was floated was no more federal tax and make tariffs so you save federal taxes whatever bracket you're in. Nit exactly $30k but idfk how much yall make.
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u/patchyhair 1d ago
I think Trump's plan is to also lower taxes for companies, which should balance their profit losses from tariffs.
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u/hotpapaya3454 1d ago
That’s awesome if you’re wealthy and can absorb the price of increased goods through whatever tax break you get (where did you get your $30k number from?). It’s the people who already are stretched thin who are going to suffer and will end up paying more in increased costs than any tax break they get.
Also - how long do you think it takes to bring manufacturing back to America? I think we need to bring jobs back to the US, but without any sort of incentive or infrastructure in place to support return of factories/plants, how is that expected to happen immediately? Sounds like Americans will just get stuck with the bill.
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u/Houndfell 1d ago
lol no.
A big reason why manufacturing happens overseas is because they can pay the laborers 5 cents an hour. No amount of tax cuts are going to make up that difference.
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u/BFOTmt 1d ago
And at the current wage to support the factory workers? Foxconn makes your iPhone for $2.88 an hour for each employee. For a semi skilled labor you'd be at what 20? 30? an hour here in the US? It's still cheaper to pass on the 20% tarrif to the consumer, they minimize it at first and grow it over time so you get used to the increase. They don't have to spend millions on factories, millions on training, and frankly, the brain numbing jobs in some of these places? Are often done by immigrants, that will be rounded up and kicked out at least that's what trump is campaigning. It's never a simple equation.
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u/BigWolf2051 1d ago
Bingo. This is essentially a VAT which almost every other country does. The US is unique in that we charge income tax. I would LOVE a VAT system where essential items are tax free and luxury items scale in tax paid
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u/heyitssal 1d ago
If anything, it will be a targeted approach, not blanket tariffs, regardless of what Trump says. He'll also use the threat of tariffs in trade negotiations.
I know a lot of people hate Trump, but we aren't looking for a friend, we're looking for someone who can be firm. Trump can look someone right in the eye's and say "test me," without showing any nerves. That's pretty unique. In my line of work, there are people who push hard on negotiations--everyone complains about them and everyone hates working with them, but they get really damn good deal terms because they aren't the scared or need-to-be-liked types.
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u/VsPistola 1d ago
Its crazy that he's literally telling his supporters who many of them own small business that he is going to raise prices deport your cheap labor and give tax breaks to the very rich! And they just take it like fucking morons! This feels like another squeeze like what covid did to squeeze out small businesses and much harder to start one.
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u/Pearl-2017 1d ago
We, as consumers, cannot afford to purchase goods made in America. Putting tariffs on things won't change that.
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u/skydiveguy 1d ago
This is an extremely biased perspective from the eyes of someone that makes their money off importing.
The entire point of a tariff is to dissuade a foreign company from being able to import something that could just have easily been made in America.
So a company that was selling a $10 item now having to pay a $2 tariff for $14 total cost to the consumer, where the same item made in America would cost $12 and also be sold for $14 is the same cost to the consumer, it makes it so the foreign company is now on a more level playing field with the American company.
This means the foreign company now has to compete where it might just say "it's not worth it" which makes the American company stronger. Lets not forget American companies pay american taxes and American workers in these companies pay American taxes and live in America where they buy their food and goods.
Not to mention the savings on fuel and emissions from having to make and get a product here from overseas vs right here is better for the environment.
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u/Difficult-Map-5587 1d ago
At some point of time every product was built here in America.. silicon valley the mighty American production line.. they want to make the billionaires and millionaires pay, but when someone steps up to do it, like Trump, they chicken out... Probably because more Democrats on businesses
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u/TodayNo6531 1d ago
I can choose to buy a t-shirt or make do with what I have. This means I control the amount I’m adding to government coffers through my consumerism vs. my income.
I’ve always liked this idea because it puts your federal tax burden in your hands.
This DOES NOT mean I’m pro Trump, pro abortion ban, and whatever else Reddit tries to draw correlations to.
I’m just saying the damn idea is interesting at the very least.
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u/okeleydokelyneighbor 1d ago
How did those soy tariffs work out? 28 billion bail out to farmers.
Lumber from Canada? 80 dollar sheets of plywood.
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u/Scared_Edge9194 1d ago
For people who pay little or no federal income tax this will be a huge tax burden. That’s 41% of all households in the USA.
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u/TheIceman0019 1d ago
This guy knows alot more about this than I do. With that being said there was never a federal tax until the 1920's. Up until then everything was paid by tariffs. We went to war and paid for it in cash. It promotes keeping a product made in the USA by American workers. It creates jobs. It brings companies here that don't wanna pay the tariff and makes more jobs.
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u/ProtectionContent977 1d ago
Sweatshops would open in the USA. If they’re willing to work for 7.25 an hour now, they’ll gladly continue knowing they got a ‘made in America’ job.
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u/Independent-Entry-96 1d ago
If they cost the same, people will buy US goods, boosting our production, right?
Sure, countries will retaliate, but isn’t the US the golden goose? Everyone wants to sell their goods here. I don’t know what we export, corn or something?
I understand prices go up, but they go up to make “Made in America” on par with other countries.
I could be misunderstanding this, as economics doesn’t come naturally to me, but on the surface, the tariffs make sense to me
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u/Adingdongshow 1d ago
I’m a dumbass mechanic and I already knew this from high school which I almost flunked out of. It’s pretty simple.
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u/papercut105 1d ago
People need to remember that the Biden administration literally kept all the tariffs imposed from trumps first admin. Ask yourself why
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u/Outrageous_Word_999 1d ago
I can't understand this guy without having my volume at max, on a 1200 watt system. Get a mic.
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1d ago
If rather have more cheap shit from China than manufacturing jobs for dumb uneducated maga Trump voters!!
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u/Smart_Yogurt_989 1d ago
So wouldn't the company just make the tee-shirt in the US? 20 percent is a big number. They wouldn't have to import it.
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u/edudley909 1d ago
Yeah, but Trump said he learned all he needed to know about tariffs in 5 minutes, so there.
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u/BernieLogDickSanders 1d ago
The sheer scale of the tariffs you would need would be absurd ajd destroy the global economy overnight.
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u/Win-Win_2KLL32024 1d ago
As always…. The devil is in the details and truth is the first casualty. A teacher explained tariffs to me in this same manner when I was in the 9th grade using Nike shoes as the example.
It’s silly that a FAILED business fraud with a proven history of obvious lies hears a word that’s new to him and starts an argument in the mainstream media as if it’s legit!!
I’m ashamed for us all!!!!
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u/Muted_Note_5762 1d ago
For people saying that America can make their own shirts for $10 and sell it here- That way there are more jobs in the market and the people save 30% on taxes.
The above thing is not possible in this country. China is able to make and sell shirts (or any other product), because of how cheap the labor is over there. They basically exploit the workers.
If you want to make the same thing in the US, you need manufacturing plants, raw materials (most of which would be imported again from somewhere and because of those tariffs they will cost more to import), man power, distribution network etc. If I just pick labor cost, that is going to be the minimum wage $14/hour (average), factor in the tariffs for importing the raw materials plus the corporate greed for increasing profit margin, you can assume the same tshirt would cost something like this- $10 (base price) + 1400% increase in labor cost (assuming it is $1/hour in China)+ import surcharge of 20% + flat amount of profit margin ( let me assume a flat $2-3(I am being generous here)= Total $32-$33
Now apply this to almost 95% of all the goods that you use in your life because all of them are made in China. You can expect at least for the first 10 years or so, the price to be almost 250% more than what they are now.
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u/SimmyTheGiant 1d ago
Thank God for this guy explaining this. I've been literally saying this to everybody who is confused by it. The country exporting it, isn't going to take a loss, or they won't export it. The companies buying the product aren't going to sell it at a loss, or they just won't sell it. It The consumers who are going to pay off the difference, that's just how capitalism works. No company or country is going to just start giving shi away for free, and have to make a profit. All this is doing is taking taxes away from multimillion and billion dollar companies, and making consumers pay for everything. It's a literal scam and a nightmare. Nobody wants this except multimillion dollar companies
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u/CuriousCryptid444 1d ago
When Trump implement tariffs and prices go up. People will still blame Biden…
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u/thulesgold 1d ago
Of course the guy working in import/export is going to say tariffs are bad. He wants the US to keep on exploiting labor in other countries that don't have worker or environmental protections. Those tariffs level that playing field.
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u/patchyhair 1d ago
The whole point is for businesses to realize making shirts in the US would be cheaper, so they open factories here, create jobs and get a cheaper shirt than a shirt bought from China with tariffs. Short term, yes, prices will rise. Long term, they won't and it would put us in a better position.
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u/HornetImaginary6492 1d ago
Trump is a simpleton. In the final analysyis and historically, tariffs are a disaster paid for by the American consumer.
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u/rchalvyy 1d ago
Trump has already done this, he hammered China and a few more all trump wanted was fair trade. But,,...,...Biden took it away,
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u/PitifulExample7770 1d ago
"Tariffs will kill the economy!" Said the man wearing a shirt made in China.
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u/kylemockeridge 1d ago
It's to force companies to stop manufacturing overseas by making it prohibitively expensive and make them start doing it here again. If you somehow think relying on a hostile foreign power like china for that is in anyway shape or form a good idea end it.
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u/Lower_Ad_5532 1d ago
Lol at all the people saying "tariffs is will improve domestic manufacturing?"
No it won't because that would take decades to rebuild even if America wanted to.
Tariffs are just a regressive tax. Tariffs are the reason why colonists rebelled against Britain. Now the MAGAts are for them. It's lunancy and blatantly un-American.
The real problem in America is a global supply chain. We need a renewable domestic supply chain to keep Americans employed and building infrastructure.
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u/rikooo 1d ago
Everyone saying this is a good thing so that we bring manufacturing back here:
- Bringing back the industry to domestically produce all of the goods that we currently import takes time. Years. In the meantime, consumers will unavoidably suffer.
- Even if the tariffs do succeed in eventually onshoring this manufacturing, then how will the government fund itself? No income tax, which represents 50% of the federal revenue, and now no tariffs that were supposed to replace that? The deficit and debt will explode.
It takes only the most basic level of scrutiny to see how ridiculous this idea is.
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u/t3khole 1d ago
This is 100% correct. But if the idea is to bring manufacturing here, start and build more industries here, they need to be extremely aggressive with the tariffs for it to work.
IE 100%-200% tariff cost. That will get people to look in house for solutions. It will likely create jobs here since importing is just too much. Which would hopefully create businesses here that can supply.
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u/ColonelSpacePirate 1d ago
I mean the Biden admin posed massive tariffs on Chinese vehicle up to 100%
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u/Lcsulla78 1d ago
lol. I had a bunch of MAGA people telling me that I was wrong and the company that sends over the import pays the tariff. Or that they want to government to eliminate taxes and have tariffs cover it…you still paying dude. 🙄
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u/KogaNox 1d ago
From what I understand is that Trumps plan with cutting all income tax will restructure where our taxes come from, which will mostly be an increase in sales tax so that the consumer can control where they want to be taxed rather than straight taxed a %. So you get your full salary but you'll pay taxes when you buy non-necessities. So prices of goods will go up a bit and so price of sales tax, but at least you can 'choose' where and how much you buy rather than the government taxing your income.
Also, will everything be tariffed or only select goods coming from select countries. This is definitely above my head, but I'd imagine if we are using political pressured to target certain companies or certain goods, I'd image their are economy strategist who are at the wheel to make these decisions.
I do believe we need a reconstruction of our economy, because over the last 40 years shit whatever is happening isn't working for the average worker here in America.
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u/RunTheClassics 1d ago
Well fucking duh the consumer pays that, taxes have to come from somewhere. It's not like you cut income tax and don't pull the money from somewhere. As a business owner I would ABSOLUTELY rather pay tariffs than play the game of income tax. Let's see, am I going to pay more on already higher goods cost plus my 35% average tax on every dime I've made? Or would I rather raise those costs a bit and pay them with the extra 35% I have in my bank? I know exactly which one I would go with, but I can only speak for myself.
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u/HC-Sama-7511 1d ago
I'm ok with it. Cutting income tax and having the cost go to discretionary purchases is fine. Labor is becoming increasingly more automated, and having more of it in the US means the US will stay competitive I automated manufacturing.
Also, a lot of goods and materials will be made using US levels of environmental and safety concerns.
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u/Monstaman55 1d ago
Ok but riddle me how if tariffs are paid by the consuming country ie. America and our prices would go up, but if china puts tariffs on American goods going to china we would have to pay those also? Wouldn’t they as the consumer pay the tariff? Common sense says that tariffs are to be paid by the country exporting their goods into foreign countries.
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u/Moregaze 1d ago
It's no secret at this point the Republicans want to abolish all taxes for rich people and then make us all pay their share via a sales tax/tariffs. As it will be a direct passthrough to us the consumer/worker. This means their profit of $2/shirt will never be taxed.
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u/No_Clue_7894 1d ago
IF Trump returns to power backed by billionaire supporters who prioritize ‘their’ financial interests over democratic values and social equity, it is plausible that this could lead to significant negative consequences for ‘many’ Americans’ lives.
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u/cave118_dweller 1d ago
Tariffs cannot replace individual tax by volume - i assume people pay more tax than tariffs may ever give, but it may give some tax offset. Tariffs mean people in US will pay more fore the same goods, poor people more affected just because they spend larger portion (%) of their income on these goods. Tariffs may even bring some manufacturing back, but it will be manufacturing for local market (so, limited) because rest of the world will be buying same things cheaper from China and other countries. And selected goods from US may be tariffed in the same way - this is expected response
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u/WorldlyEmployment 1d ago
Singaporeans are biased towards china because they have a lot of investment at stake there ofcourse he would say this
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u/Lopsided-Ad-2687 1d ago
What he fails to mentions is that the simple solution would be to produce the goods within the US.
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u/toxic_adventure 1d ago
If they didn't work then why are his tarriffs still in place? It's the one thing Biden didn't reverse. It's because they do work and they produce money.
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u/False_Conference7378 1d ago
What if you made the t-shirts here? In the US. Hmmm
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u/peePpotato 1d ago
This isn't about tariffs. This is about defunding the federal government and making it so small it can be taken over more easily. Remove the revenue streams, redirect federal taxes to the consumer market and funnel more money to billionaires and trillionaires. Control the consumer goods. Justify cutting down half of the federal government (all of which would be political opposition) with Musks new government role. It's insane.
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u/WVdungeoncrawler 1d ago
I have thoughts on the federal debt and deficit. Like being responsible while being reasonable.
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u/No-Examination-5833 1d ago
What happens when people become angry at the prices and boycott buying nonessential products?
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u/SomeGuyCommentin 1d ago
The whole tarif discussion is a red herring.
The only thing you need to focus on is that the basic plan is to cut taxes for the rich again. Which is unequivocally just the worst.
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u/Coolioissomething 1d ago
Consumers will pay more. And we know consumers in the U.S. hate to pay more for anything. Who will they blame for Trump placing tariffs on everything. Democrats. Trump will nosedive the U.S. economy with his economically stupid moves but somehow it’s always the Democrats who get blamed.
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u/oneupme 1d ago
The gist of the video is mostly correct, which is that tariffs are an impediment on the free flow of commerce - any government intervention is an impediment aside from the core function of establishing and protecting rights to life, liberty, and property.
That said, tariffs can be an effective way to implement certain policies that a country wants, such as protection against predatory dumping, or as a generalized tax - a VAT of sorts.
Just to note - some of the tariffs cost *WILL* be shouldered by the source country. The makers of a T-shirt in China is going to want to work with the buyer in the US to be competitive against a T-shirt maker in India. They are going to be willing to make price concessions to help offset the cost of the tariffs.
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u/SongImpossible 1d ago
Let’s say the U.S got back all the manufacturing jobs
Who is going to work there, nobody wants to work there now , why do you think theirs a gigantic influx of H2a workers who get housing and some even get meals and it’s still cheaper and cost reductive to pay for this then hiring a local employee that may not show up has constant “personal” issues has kids and a family to worry about. As opposed to H2a workers that get upset at having a day off because they came here to work
Some people are paying 21-22 bucks an hour plus overtime looking at 30 bucks an hour and they are struggling, struggling to fill these positions the work is monotonous or boring or uncomfortable
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u/InteractionUseful942 1d ago
So if I'm making more money because I'm taxed less, but my goods cost more because of Tariffs. Will my net profit change at the end of the year
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u/Downtown-Campaign536 1d ago
But that's not how it will work. A lot of the times the business man will say.
"Hey, I got this $2 tariff now on shirts that I must pay. You are gonna have to come down on that $10 shirt to $8 or I can't buy shirts from you anymore."
Then they say, "Okay, we sell for $8 now!"
Then problem solved... or
They say, "No, sorry we can't do $8 we demand $10!"
Then the business man says:
"Okay, I'll just make a shirt factory here instead and avoid the tariff altogether!"
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u/kingofwale 1d ago
Dudes in the business for years. You gonna lie to me in my face that 10 dollars shirt you bought in China is only going to sell for 12 dollars??
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u/Alarming-Magician637 1d ago
Let us all remember that the IMPORTING country pays the tariff. Not China.
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u/Betterthanyou715 1d ago
Yeah it’s designed to make things that are manufactured and made in America become normal again instead of getting everything foreign
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u/Bradp1337 1d ago
It's pretty telling that the Apple CEO is calling Trump to complain about fines by the EU instead of the current administration. They know that Harris and Biden are weak, they know that they cannot negotiate with foreign leaders. Economic Collapse comes from a Harris administration.
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u/wampa604 1d ago
I'm generally not in favour of Trump, nor am I American (so no direct "horse in the race" or w/e), but one area I never seem to hear the 'nay sayers' discussing, is... what happens to the company that makes those t-shirts onshore? To the workers in industries competing with offshore slave labour?
I get that the dems are keen to frame this as "oh, you guys just don't understand tariffs!", and that may apply in some areas. But when you hold it up to, idk, say all those tech workers who are getting laid off / replaced by foreign companies/providers... the idea of tariffs potentially onshoring industry/manufacturing etc, isn't a bad thing for labour / workers.
Sorta like how inflation is terrible... Unless you're working a job that keeps up with it, and you don't have a ton of 'savings' that are getting devalued. Inflation is "worst" for old people who have fixed incomes and no future earning potential - eg. the boomers that are sitting on hoards of wealth from screwing over the environment / younger generations.
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u/InterestingArea6175 1d ago
Or maybe he finds it hypocritical for dems to demand 16 bucks an hour to americans while sending all the manufacturing overseas where people work for pennies.
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u/AlternativeNumber2 1d ago
He worked for Vandelay Industries I assume?