Retailers will soon have only about 7 weeks of full inventories left

If you were thoughtful about economic policy and truly believed a trade war was the solution, you'd prepare ahead of time (e.g. by stockpiling things like rare earth metals that are important to your economy and likely to be impacted by retaliatory tariffs).

That they haven't done that is one more indicator that they are thoughtlessly winging this. Even if there's a solution that involves tariffs, that's not the play they're running.

The issue is that labor productivity (level of tech) in American mfg hasn't broadly increased at the rate we'd need to manufacture many things at reasonable prices for the American consumer. This makes Baumol's cost disease a huge issue: https://en.wikipedia.org/wiki/Baumol_effect You can see this manifest in healthcare as one of the most egregious examples; the top cause of margin pressure for hospitals is labor: https://www.hfma.org/press-releases/health-systems-near-thei....

While we can still manufacture things that require comparatively high levels of skill, technology, and capex, it's never again (absent a depression greatly outstripping the 1930s) going to be profitable to pay American workers to make t-shirts rather than Bangladeshis.

There's a good argument to be made that a combination of outsourcing and illegal labor caused problems by suppressing investment in tech and automation for thirty years plus, and there are certain things we probably should make here. But ultimately the stuff we actually need to manufacture are things core to sustaining life and the military. Medical supplies, weapons, food, oil, metals, chemicals, etc.

We can, with time and good industrial policy, bring back some manufacturing. That would be a case of short-term pain for long-term benefit. But even then, that's true only insofar as we give people a shot to actually buy American. Moonshot investments in roboticization and industrial automation for a few years would really make this easier, along with using the huge amount of post-HS education dollars we spend to focus on training skilled engineers to implement this sort of thing, along with things like skilled machinists. But these tariffs don't really give American companies a shot.

We cannot, with any reasonably-good outcome, bring back manufacturing jobs. That midwest factory worker is never going to be paid $30/hour plus pension/retirement contributions, good medical, etc. to make regular, el cheapo consumer goods.

1. Tariffs directly take money out of the coffers of private companies and move it into the government. Private companies therefore have less money to invest.

2. Tariffs are a tax on economic activity and therefore suppress it. This causes companies to want to hold more cash and invest more conservatively. Major changes take appetite for risk, which tariffs reduce.

In addition, the arbitrary, legally questionable way in which this particular set of tariffs has been imposed means they are not affecting long-term corporate planning. Instead most companies are seeking to just “wait them out” while issuing hollow press releases with big numbers they think the president wants to see.

Our current situation is the result of decades of deliberate greedy systematic outsourcing of everything that can be outsourced. It's our own dumb fault. And it will take decades to reverse it if it's even possible. It's not a "short-term" kind of thing.

No competently run company is going to invest in more-expensive domestic production based on what the administration is doing because there can't be any expectation that policies will remain in place until production can be brought online. It doesn't even make sense to consider planning to onshore production because there's no reasonable expectation that the current policies will be in place in a month, much less in the year or more needed for a production change.

The goal was never to bring manufacturing back to the US. It's to negotiate new tariffs.

With China specifically, I could also see a deal that included stricter enforcement of US IP laws, which is definitely destroying businesses and the job loss that comes with it.

I don't. I see this as the intentional razing of the US economy and interests.

If I were Trump, I instead would have pushed congress to take away the power of tariffs back from the presidency and make something like the Fed to manage them instead, with some checks added in. I normally don't like unelected officials making policy like that but in this case I don't see what else would work. As we've seen, broad tariffs are very unpopular even if they might be necessary, and we'd need them to have the potential to stick around much longer for them to be effective.

That said, I'm willing to bet this will finally put the nail in the inflation coffin. Taking money away from consumers and "burning it" by returning it to the government is the best way to deal with inflation.

Trump is 100% convinced his (long disproven both theoretically and empirically) trade theory is true, and no one can talk him out of it.

So it has to play out until the effects are unbearable.

Or until congress votes to take his tariff powers away: https://www.kwch.com/2025/04/30/senate-voting-resolution-tha...

it's not "the one thing", which contributed to it. There are multiple factors which spurred industrialization, some of them are:

   * Europe and Japan was destroyed and they had other problems to deal with
   * Soviet Union was seen as an enemy
   * Many US soldiers returned home from war and they needed a job
   * When many people started working in manufacturing, they needed different optimizations for their process, which lead to more manufacturing

I genuinely believe that this will be a decade long struggle to generate a long-term benefit to the American nation (ie, the average person) via tariffs as a tool of class warfare and economic restructuring. If you read around MAGA forums, you’ll see this described as a “Mag7 problem, not a MAGA problem”.

But that may not be what you’re asking.

But from what I've read/heard/understand tariffs can have the effect of on-shoring but only if they are fixed an unlikely to change/fluctuate. On-shoring production is not quick. Some Trump rep made a comment about how they delayed the tariffs on phones/computers 3 months because "Companies would need time to move production" which is just laughable, as if anyone could move production in 3 months (let alone 3 years).

None of it matters since the Trump admin changes its mind like it changes its socks. No serious company is going to do more that PR about how they are moving production back to the US because they can very easily get burned when Trump changes his mind. Moving production is a massive task and getting caught half-way through with policy changing (making it no longer profitable) could be a death blow to some companies.

The consequences are so bad that everyone who remembers the disasters brought on by high tariffs must be dead for anyone to think it is a good idea.

So, even if the purported goals are good, even achieving them will be outweighed by the disaster.

Plus, companies in countries protected by high tariffs inevitably become globally uncompetitive.

Edit, add: Even worse, most high tariff schemes have distinguished between placing the high tariffs on only finished goods and exempting the raw materials or components from the tariffs. This administration makes almost no such distinctions, just sprays tariffs everything, so harms US manufacturers as well. The only exemptions are the ones who pay tribute (e.g., sponsoring inauguration, etc.), so it is almost more of an extortion scheme than a tariff plan. A particularly bad example was revealed as the Japanese delegation came to negotiate, asked what concessions the US wanted, and could get no straight answer [0]. It seems the US group just expects the tariffed nations to supplicate and bring adequate gifts, not make adjustments according to a master plan. Very strong indication there is no plan, which is the worst possible case.

So, while I completely agree with the concept of looking for a silver lining, I'm not seeing any...

[0] https://petapixel.com/2025/04/21/japan-cant-get-an-answer-on...

Appealing to economists is the opposite of what they want, because economists look at macroeconomics efficiency which encourages globalism. They would rather be inefficient and hold on to their identity.

Seems pretty paternalistic to me. Why not let people decide for themselves whether they "actually need" the $5 plastic trinket from china? Do you not trust adults to make informed decisions on what they're buying?

The US does not tax trash, it taxes the origin of products. That applies regardless of if it's good or bad.

In defense of those who may sincerely disagree, they may frequent higher quality retail than the bulk of U.S. shoppers.

It's funny that the same party that likes to warn of "you will own nothing and be happy" is now defending economic policy that will decrease material wealth, but it's ok because it is "good for you" to practice having less.

Then furthest in the back you have the fresh produce: Eggs, vegetables, meat and chicken, fish sometimes, dairy and bread. The good stuff.

Now look down the shopping carts of your fellow shoppers: Filled to the brim with big boxes of the most unhealthy sewage on offer. They are subsidizing your shopping for quality ingredients from near and far.

I think it's the same with other stores. The low quality junk that appeals to the average shopper is subsidizing the quality niche item that you need to buy.

edit: ok, I didnt know that bussiness stop buying, but they must buy somethings in the future right either buy from other tax exempt or buy thing with add value tax

China thinks in terms of decades and their population is very culturally disciplined. They will endure years of economic downturns if necessary. Historically they have.

They also have quite a few advantages being a planned economy, with a higher appetite for wealth redistribution than the US and the hability to shift investments very quickly. This quells most internal dissatisfaction that recessions bring.

They merely have to wait it out, as they have. Trump dropped some tariffs without them doing anything.

I'm not sanguine. I think their leadership prides itself on being tougher and smarter than American leaders, and I think when they look at the results Canada and Mexico have gotten, complying with Trump, they're not going to feel like compliance will help.

I'm trying to think of a public traded company that could be true for. It just doesn't seem that there is going to be a company that is tied to the fortunes of the US populace. Conagra maybe.

There are other countries in the world apart from US and China. US has effectively alienated most of these with tariffs (save for Russia).

So prepare for a lot of friendly blinking between these countries to gang up on the bully.

> And it does appear that Trump has blinked first, last week hinting at a potential U-turn on tariffs, saying that the taxes he has so far imposed on Chinese imports would "come down substantially, but it won't be zero". Meanwhile, Chinese social media is back in action. "Trump has chickened out," was one of the top trending search topics on the Chinese social media platform Weibo after the US president softened his approach to tariffs.

https://www.bbc.com/news/articles/cpq7y8vl55yo

The current administration's actions are not meaningfully helping push us towards that. There are plenty of things they could do to help motivate that, but what they've done so far isn't really in that direction.

https://www.bloomberg.com/news/newsletters/2025-03-21/-chine... https://militarnyi.com/en/news/usa-unable-to-make-drones-wit...