I imagine this didn’t even cross the Orange Idiot’s mind.
He is doing it to collect taxes from Americans. Tariff is just a fancy GST,VAT system that discriminate by country.
So, instead of a fixed percentage (or based on product type) like GST, tariff is a tax with different percentages based on product origin.
At the end of the day, it is just a cunning way to raise taxes on Americans.
I wonder if he can collect more taxes by having factories in US vs. just collecting tariffs. Either way, products are going to get more expensive in US.
And for what? Even if someone intended to build a factory to produce things inside the US, they would instantly be dead capital once Trump is forced to drop the tariffs.
Less than 7% of building materials are imported into the US and a large portion of that is likely Canadian lumber that won’t be a factor in building factories. Our biggest issue is a lack of educated and trained workforce. There are specific types of engineers that work in manufacturing and we just don’t have thousands of them sitting around waiting for work. We don’t have enough to begin with. And we certainly aren’t going to get many moving here with the way ICE is treating people.
I don’t think it’s building materials that is the question, but rather the multi-million dollar machines that are often designed and imported from elsewhere.
Those fancy Bosch assembly lines your widget factory needs will be hit by that 20% tariff coming from the EU, even if the building they sit in is made of American brick and lumber.
It’s not just the cost. It’s the time it would take for some industries to move to the US. The textile industry isn’t moving anywhere within the next 3.5 years. That machinery isn’t just waiting to be turned on in America. They need all new everything or need to disassemble the machinery and transport it across the ocean and train up a whole new workforce to operate it. Most electronic manufacturers aren’t going to be moving either. The pharmacal companies can move no problem.
Plus the supply lines. I heard it said that TSMC is the king not just because they have the best equipment and scientists and engineers in the world, but because they have a very well optimized supply line that allows they to buy incredible amounts of raw materials and turn them into incredible amounts of chips and ship them all over the world.
All the raw materials needed for high tech, high precision products do not exist in the US and will have to be imported at higher cost, if the exporting country, now tariffed, allows.
You would think this is a perfect opportunity to offer anyone willing to move to the US an agreement were no tarrifs are applied to the building materials of the factory or business being built as long as it meets certain requirements. Of course, that will never happen.
Bout tree fidy
Running cost vs what you can charge for the output product is more important than the one time cost of setting it up.
Very simplified: The demand for domestic steel will go up, production of domestic steel will go up, demand for domestic iron will go up, the cheap stuff is already being mined so more expensive to extract deposits will be used.
I don’t think the tariffs are primarily meant to make it cheaper to manufacture in the US. They are to be used as leverage in negotiations.
Eg Canada wants to trade. They can and probably will trade a lot more with Europe, but Europe have quite a lot of laws and regulations, and it can’t make up for the entire the US market. Negotiating with China is going to be about equally unpleasant as negotiating with MAGA US. Both options also requires shipping over an ocean.
Remains to be seen how angry he has made the populations of the rest of the western world (not know angry he has made you and me)
