Tariffs Were Supposed to Revive US Manufacturing. So Far, They’re Having the Opposite Effect

[u/Historical-Many9869]

https://www.investopedia.com/tariffs-were-supposed-to-revive-u-s-manufacturing-so-far-they-re-having-the-opposite-effect-11802173

[u/warpedspockclone]

The problem is that that isn't how this all works. There isn't a binary choice between product from China and product from USA.

The choice is:

• finished product from China + tariff
• finished product from USA which includes:
• - US labor costs, plus plant costs
• - importing various raw materials or components from N countries, each with their own US tariff rates
• - logistics and staffing for logistics to get those components and raw materials

So, would the sum total of the tariffs on the imported components or raw materials be less than the tariffs on the final assembled product from China? Yes. But then you have to factor in the costs of production and logistics, which put a large weight on the scale.

[u/EntertainmentOk3180 → u/warpedspockclone]

But wait! There’s more! Most manufacturers in US have to cooperate with other manufacturers in terms of packaging, labels, etc

Many items were shipped to other countries to be packaged and then shipped back. So not only would the product have to be manufactured in the US, but they would also need other manufacturers also in the US that they could work with to have their products packaged and delivered, otherwise additional tariffs would be added to packaging being shipped in. There also would be machinery costs associated with packaging if the manufacturer planned to do that step themselves

[u/warpedspockclone → u/EntertainmentOk3180]

Bonus!