Stock market is pricing in a reversal in the China/US tariffs. S&P 500 is same today as day before "liberation day".
According to Flexport CEO, container ships from China to US are down 60% since tariffs. That's actually insane.
No US business is going to move factories back to the US because they don't know if the tariffs are temporary. They can spend millions moving to the US, only for Trump to reverse tomorrow. Now their competitors who didn't move will be in a much healthier situation. If Trump doesn't reverse, they can spend the next 4 years building a factory in the US, hire workers, train them, only for the next president to reverse the tariffs. Same problem. It takes a lot of time to recuperate factory costs. Lastly, there's just no way these companies can hire enough skilled workers for factory work in the US. For f sakes, unemployment rate is just 4%. No one in the US wants to work in a factory.
Lastly, China makes much of the factory equipment too but those are also subject to 100%+ tariffs. How can you compete? Chinese companies will completely dominate goods that the US used to dominate in if these tariffs stay. US companies will go bankrupt while Chinese companies will buy those factories, rebrand the goods, and sell to the rest of the world. How can goods that used to be made in China but now moved back to the US compete when China can make the same thing faster, cheaper, and higher quality?
I hear people often say things like "we can 3D print in US". Yea, China makes those 3D printers. Others say "we can automate factories in the US". Yea, China is leading the world in factory automation as well.
According to Flexport CEO, container ships from China to US are down 60% since tariffs. That's actually insane.
No US business is going to move factories back to the US because they don't know if the tariffs are temporary. They can spend millions moving to the US, only for Trump to reverse tomorrow. Now their competitors who didn't move will be in a much healthier situation. If Trump doesn't reverse, they can spend the next 4 years building a factory in the US, hire workers, train them, only for the next president to reverse the tariffs. Same problem. It takes a lot of time to recuperate factory costs. Lastly, there's just no way these companies can hire enough skilled workers for factory work in the US. For f sakes, unemployment rate is just 4%. No one in the US wants to work in a factory.
Lastly, China makes much of the factory equipment too but those are also subject to 100%+ tariffs. How can you compete? Chinese companies will completely dominate goods that the US used to dominate in if these tariffs stay. US companies will go bankrupt while Chinese companies will buy those factories, rebrand the goods, and sell to the rest of the world. How can goods that used to be made in China but now moved back to the US compete when China can make the same thing faster, cheaper, and higher quality?
I hear people often say things like "we can 3D print in US". Yea, China makes those 3D printers. Others say "we can automate factories in the US". Yea, China is leading the world in factory automation as well.
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