We never stopped manufacturing, we just stopped employing people.
> We don’t have the infrastructure to manufacture
That's trivially false given we're the second-largest manufacturer in the world. We just don't want to employ people, hence why we can't make an iphone or refine raw materials.
The actual issue is that our business culture is antithetical to a healthy society. The idea of employing Americans is anti-business—there's no willingness to invest, or to train, or to support an employee seen as waste. Until business can find some sort of reason to care about the state of the country, this will continue.
Of course, the government could weigh in, could incentivize, could subsidize, could propagandize, etc, to encourage us to actually build domestic industries. But that would be a titantic course reversal that would take decades of cultural change.
Concur, employee training and retention are at an all-time low. There are no positions available for junior employees, minimal onboarding and mentoring of new employees. Organizations have stopped planning people's careers. Used to be that the employee's career growth was their manager's problem, while the employee could focus on the work. Now the employee must market themselves as often, if not more often, than actually doing the work. Meanwhile organizations see employees as cost centres and a net drain on their revenue sources.
Corporate culture in America is definitely broken. I'm not sure how we can fix it.
> minimal onboarding and mentoring of new employees. Organizations have stopped planning people's careers.
I hear from all the much more senior devs about how they learned OOP in company training after years of C, or how their employers would give bonuses for finished projects, and that sort of thing. I always seem to join the ship when the money train and training train leaves the boat.
I think R&D for tax reasons needs to be changed, we had so many tech advancements used to this day from Bell Labs. Now only Microsoft, Google, Apple etc can afford to do R&D and so all the innovation is essentially only worth while to them if they can profit from it.
Granted I do think if you build something innovative you should be able to monetize it, but it takes investing a lot of blood, sweat, tears and money.
It's also fundamental tech and a research pipeline supporting new ones.
There are numerous examples of whole competencies were transferred to a foreign partner, leaving only sales and marketing in the US. TV's for example, gone by 2000, leaving only a swirl of patent walls to further prevent them from coming back. https://www.detroitnews.com/story/opinion/2014/10/22/america...
And research? DEC WRL, Bell Labs, Xerox Parc ... Which corp has the gumption to fund any of that again? They'd rather pad the current quarter than invest in the next.
To get employers to invest in employees, they'd need more of a stake in it. Right now if you invest $200,000 to train someone, they can immediately quit and go work somewhere else and you're out $200k, so they don't do that.
A way to fix that would be to e.g. issue student loans for the training and then forgive them over time if the employee continues working there. But that's rather disfavored by the tax code when forgiving the loans is considered taxable income, and you would have people screaming about "abusive" companies sticking you with $200k in debt if you quit right after they give you $200k worth of training.
In networking the situation is just ridiculous. Companies just expect people to know Cisco Nexus, ASA, XE, Palo Alto, Linux, AWS VPC, and do a bit of database and backup admin all for less than $100,000 a year.
> Organizations have stopped planning people's careers. Used to be that the employee's career growth was their manager's problem, while the employee could focus on the work.
Could you please inform my managers who keep pestering me about career growth of this shift so I could just focus on the work? ktnx
> Now the employee must market themselves as often, if not more often, than actually doing the work.
Maybe only tangentially related to your post, but this has been on my mind a lot lately. After many years of doing all kinds of tech and business consulting gigs, I decided to somewhat specialize over the last 3 years and have been spending some time on LinkedIn this year.
What I can't figure out is how (arbitrary percentage) 30% of the people I follow do any work when they are on LinkedIn posting/commenting on posts _all_ day.
Employees have always been responsible for managing their own career growth and always will be. How can it be otherwise? It would be foolish for an employee to let someone else handle career growth for them as their interests aren't aligned (or even known). If you want help with career growth then find a mentor, don't rely on your manager.
Managers should facilitate training to improve employee productivity and help prepare them for a promotion. But that isn't really the same as career growth.
>We just don't want to employ people, hence why we can't make an iphone or refine raw materials.
This is it. Aside from manufacturing, most recent AI startups are almost universally aligned in the desire to use it to reduce headcount. It's plastered all over their landing pages as a selling point: "use our product and you won't have to hire people."
Business culture is eating its own young and hollowing out the future with such empty goals and sales points.
I'm skeptical of actual results. There are a lot of layoffs attributed to AI but far fewer cases of increased sales attributed to it.
I'm American and heavily involved in manufacturing for industrial/mining/agricultural customers.
'We just don't want to employ people' is a gross simplification. We do want to employ people, and lack of skilled labor is a serious problem which has hampered business growth for years,
The first unspoken problem is that very few young people want to live where many factories are located. I can't blame them. I certainly jump through hoops to live in an area well removed from the industry I work in but not everyone has this luxury.
The second is psychological. How many kids do you know who are ready to commit to a future of 35+ years of factory work in their early twenties, even with reasonable pay. This influences manufacturer's hiring practices because of the 'skilled' labor thing. Putting time and resources into training employees when there is a high probability they will make a career change within 3 years isn't really acceptable.
This is HN, so I don't know if this resonates but as a thought experiment, would you take a welding/machine operation/technician position for 25 - 45 USD/hr (based on experience)? Overtime gets you 1.5 base rate and health insurance + dental + 401k is part of the deal. All you need is a GED, proof of eligibility to work in the United States and the ability to pass a physical + drug screen on hiring. After that, no one cares what you do on your own time if you show up, do your job and don't get in an industrial accident. Caveat, you have move away from anything remotely like a 'cultural center' but you do have racial diversity. Also, you will probably be able to afford a house, but it won't be anything grand or anywhere terribly interesting.
There is a dearth of applicants for jobs exactly like what I've posted. Why don't people take them?
> There is a dearth of applicants for jobs exactly like what I've posted. Why don't people take them?
It's pay. It's always pay.
You gave a range so I'm guessing the lower end is starting out, why take that when nearly every entry level job, with far less demand, pays about the same?
Start your pay at $45/hr and people will flood in. If they aren't, it's because the factory is too remote for population to get to. Put that factory in any mid to large midwestern city and it'll be flooded with applicants.
How do I know? About an hour south of Louisville, Amazon keeps building giant warehouses and hiring workers, and people fight over those jobs. They don't pay half of that.
> This influences manufacturer's hiring practices because of the 'skilled' labor thing. Putting time and resources into training employees when there is a high probability they will make a career change within 3 years isn't really acceptable.
We've had decades of large companies laying people off (effectively) without warning, and the lessons of "don't trust an employer" are... fairly well understood by a lot of folks. If I had the promise of working some place for, say, 20 years, with a statistically 0% chance of being let go because someone wanted to goose the quarterly numbers to get their bonus... yeah, I'd have gone for it years ago. Even 25 years ago, that wasn't much of an option with most companies. Lean/Kaizen/JIT were all big movements by the 90s and ability to ramp down headcount was a requirement for most companies.
Where does 'skilled' labor for specific types of manufacturing processes come from? High school? With slashed budgets and worsening teacher/student ratios?
Businesses could step up and create environments that people competed to work at - pay decently, invest in their workers and community - but that requires a commitment to stick with the people and community even in the lean times. And most companies don't want to, or more likely simply can't, operate that way.
30 years ago I considered positions like that. Some of my family and friends did, and were there for years - decades in some cases. I don't think there's many of those left any more.
Yeah I think I would say you're right to doubt if this resonates on HN. You're posing it to an audience which has very little GED-level representation. HN more often has people who did well in school and are at a much better disposition for higher-salary jobs.
I'm not part of the target population but my guess is that a large factor has to do with people's tendency to go down the path of life that is most similar to the path they've already tread. If you grew up in a 'cultural center' it's less of a paradigm shift to take the crappy job around the corner rather than move somewhere slightly more remote to start a new career even if in the long run it could actually lead to a more decent life.
Oddly, literally everything you just described is true about my pure remote software engineering position, except I had to get bachelors in computer science first.
I think it's worth specifying even further: wealthy business owners don't want to pay what a US employee costs.
Most jobs are wholly unsustainable. You have to job hop every couple of years to keep up with inflation because God knows you're not getting a raise that keeps you comfortable.
This has led to churn and brain drain and the slow collapse of US domestic business.
It's not that people don't want to work, it's that wages have fallen so far behind the cost of living that it's financial suicide to stay in any one job. Even with all the traps like employer sponsored healthcare, most people just can't afford to be paid the pittance most businesses are willing to pay.
This is a deep societal illness in the US. We've glorified and deified the concept of greed to the point where even talking about income inequality and the unimaginable concentration of wealth is just anathema. It's seeped into the everyday consciousness in the form of "I'm the only one that matters, fuck absolutely everyone else"
I genuinely believe that America will never, ever recover until we address this. We will always be this sick and broken country until the state entirely collapses or we get our shit together and address income inequality.
I have some real serious doubts that we'll ever get there, but it's easy to be pessimistic.
The problem is that we're talking about "manufacturing" as one big homogeneous thing. The US obviously makes a bunch of stuff, but it has very limited ability to make lots of kinds of stuff, especially in a hostile trade environment.
The US manufacturing sector is about half the size of China's in terms of value-add, but it's much smaller by any other measure. The US has focussed on high-value verticals like aerospace and pharmaceuticals, where intellectual property provides a deep moat and secure profit margins. That kind of manufacturing doesn't produce mass employment for semi-skilled or unskilled workers, but it does create lots of skilled jobs that are very well paid by global standards.
That's entirely rational from an economic perspective, but it means that US manufacturing is wholly reliant on imports of lower-value materials and commodity parts.
A Chinese manufacturer of machine tools can buy pretty much all of their inputs domestically, because China has a really deep supply chain. They're really only dependent on imports of a handful of raw materials and leading-edge semiconductors. Their US counterparts - we're really just talking about Haas and Hurco - are assembling a bunch of Chinese-made components onto an American casting. To my knowledge, there are no US manufacturers of linear rails, ballscrews or servo motors.
If the US wants to start making that stuff, it's faced with two very hard problems. Firstly, that it'd have to essentially re-run the industrial revolution to build up the capacity to do it; secondly, that either a lot of Americans would have to be willing to work for very low wages, or lots of Americans would have to pay an awful lot more in tax to subsidise those jobs.
It's worth bearing in mind that China is busy moving in the opposite direction - they're investing massively in automation and moving up the value chain as quickly as possible. They're facing the threat of political unrest on a scale they haven't seen since 1989, because of the enormous number of highly-educated young people who are underemployed in unskilled and semi-skilled jobs.
Lots of Americans want to bring back mass manufacturing employment, but very few of them actually want to work in a factory. You can't resolve that contradiction through sheer political will.
I did a tour of a huge beer plant in the US. The 4-5 floors where they made the beer had maybe a dozen people total. I was told back in the day it would have been thousands of workers.
It's not even aerospace and pharmaceuticals. Any manufacturing that comes back onshore will not employ massive amounts of people.
They will automate it. Which, to be fair, will help employ some Americans. But it won't be employing them to work 9-5 in a factory. It will be used to employ Americans to build and maintain the machines building the product.
> The US has focussed on high-value verticals like aerospace
Which is about to take a huge nosedive, as both Europe and China pull back on buying critical systems from the US. And can you blame them?
There's an excellent youtube series (by a Finnish ex-military officer) on the likely impact of recent events on US arms sales to Europe. They do have choices!
Trump and Musk's threats to invade and blackmail (e.g. by cutting off Starlink) will be felt long after they're both gone.
I have worked US manufacturing and manufacturing R&D for most of my career: pharmaceutical, microelectronics, materials, aerospace, etc. The US is awesome at manufacturing when we want to be.
One problem is that "modern MBA/business philosophy" views manufacturing and manufacturing employees as a cost center and there is so much emphasis on maximizing gross margin to increase shareholder value.
So business leaders scrutinize the hell out of anything that increases the cost of their cost centers:
- employee training & development? hell with that.
- Increasing pay to retain good employees in manufacturing? Why? isn't everything mostly automated?
- manufacturing technology development? Not unless you can show a clear and massive net present value on the investment... and, then, the answer is still no for no good reason. I have pitched internal manufacturing development investments where we conservatively estimated ~50% internal rate of return and the projects still didn't get funded.
There is also a belief that outsourcing is easy and business people are often horrible at predicting and assessing the total cost of outsourcing. I have been on teams doing "insource vs. outsource" trade studies and the amount of costs and risks that MBA decision makers don't think about in these situations really surprised me initially... but now I'm use to it.
Anyhow... the US (and Europe for that matter) can absolutely increase manufacturing. It is not "difficult"... but it would be a slow process. I think it is important to differentiate between difficulty and speed.
You could simply make taxes scale inversely with the number of employees. Make the tax scale with a lack of career path. Even more tax if you don't have a system to measure and reward performance. More tax for lack of R&D. They don't have to be huge amounts, just enough for the MBA to stfu.
> The actual issue is that our business culture is antithetical to a healthy society. The idea of employing Americans is anti-business—there's no willingness to invest, or to train, or to support an employee seen as waste. Until business can find some sort of reason to care about the state of the country, this will continue.
I think you're exactly right there.
>> We don’t have the infrastructure to manufacture
> That's trivially false given we're the second-largest manufacturer in the world.
I want to quibble with that a little bit. I don't have the numbers, but relative position matters too. The US could be "second-largest manufacturer in the world" if it only manufactures Dixie cups, other countries manufacture nothing, and China manufactures everything else.
My understanding is Chinese output is so huge, that even if the US had maintained steady or modestly growing manufacturing output from the 70s or whatever, it would be dwarfed by China.
Our biggest exporter is Boeing and sure Boeing produces commercial aircraft but their position has a lot to do with inertia as the accountant leadership of Boeing is doing their best to destroy Boeing by nickel-and-diming every aspect with a complex web of outsourcing that will fall apart the second there is any disruption in international trade.
What China has now is the infrastructure and ecosystem to manufacture. You need some tiny screws made of titanium? Well, there's a factory that produces that down the street.
The last time we got employers to care about employees it was because the unions dragged the bosses into the streets and beat the daylights out of them.
Unions are all conservative trump voters now. Labor isn’t left wing anymore. Arguably never really was (sorry coping anarchists and marxists, but usually the greedy monical wearing boss still leads to better outcomes than most “back against the wall” types we end up with when we let leftists have one iota of power.
> Until business can find some sort of reason to care about the state of the country, this will continue.
The best financial years Puerto Rico had ended when the tax incentives to be there went away. It's a real shame. Puerto Rico was #1 in production, above the US and Japan. You could buy something made in Puerto Rico and you knew it was a high quality product. Its much harder to gain back that level of quality once you've effectively killed such a culture, I can only imagine the detriment in Japan if they lost their work culture and how much harder it would be for them to regain it.
This is even showing up a bit in tech now. The number of places that expect some articulation Venn diagram of skill sets is too high.
There are too goddamned many stacks to expect that your best hire is going to already have used everything you’re using. There are people who have used everything, but you’re mostly going to be hiring flakes if you look for those, not Right Tool for the Job types.
>That's trivially false given we're the second-largest manufacturer in the world.
Sure, but we don't manufacture the things that are typically made in 3rd world countries and the lead time to build that infrastructure is years, and generally would result in us moving down the tech tree ladder from being a consumer economy to a manufacturing economy with all of the negatives associated with that.
This attitude that manufacturing is moving down the tech tree ladder completely misunderstands manufacturing. IME the entire notion was invented by elitist economists and embraced by CEOs looking to justify sending manufacturing overseas for short term profiteering. Regular people bought in because of the promise of cheaper gizmos.
It’s the sort of attitude that infected Boeing and resulted in taking them from the peak of aviation to an embarrassment. Because they don’t know how to lubricate doors or tighten screws.
Building things is hard, and requires significant technology and skills among a lot of people. A service based economy inherently looses that technology and skill.
Tim Cook interviewed and said China isn’t the low cost labor anymore it once was. China has become the place that knows how to manufacture things, especially electronics.
The actual issue is that our business culture is antithetical to a healthy society.
I agree with the unhealthy society and your statement got me thinking. In regards to health what happens when global trade is shut down and a country can not make it's own pharmaceuticals for example? About 64% of people in the US over age 18 are on prescription drugs. Some of those drugs have really dangerous rebound effects if one suddenly stops taking them. Some of those effects can be deadly, especially blood pressure drugs. Most of those drugs come from China, some from India. How quickly can each country start manufacturing and distributing it's own prescription drugs? Would that cause a quick adjustment to the culture or is that not enough?
To clarify, I just Googled for: what percent of american adults are on prescription drugs?
I got back from "AI Overview": Approximately 64.8% of adults in the United States report taking prescription medication at some point in the past 12 months. This figure is based on data from the Centers for Disease Control and Prevention.
The key phrase here is "at some point". I guess a huge amount of it is a very short 1-3 week dose of antibiotics.
Which means policies that reverse that are immensely important. The process of offshore our jobs and much I.P. took decades. Getting them back and rebuilding manufacturing support will take a long time, too.
Just need to make steady progress each year with incentives that encourage large leaps in progress.
> We never stopped manufacturing, we just stopped employing people.
I don't think it's just that. We manufacture, but we aren't great at the entire chain. China is much better are specialized tooling, etc. We have definitely lost a lot of knowledge in critical parts of the chain.
> We never stopped manufacturing, we just stopped employing people.
That’s a misleading oversimplification. While it’s true we haven’t stopped manufacturing, we did offshore a massive portion of it--especially after the Open Door Policy with China and subsequent free trade agreements. That shift didn’t just change where things are made; it fundamentally altered corporate incentives. Once production moved overseas, the need to invest in domestic labor--training, benefits, long-term employment--shrank accordingly.
Most companies that do manufacturing in USA are oriented to making business-to-business products, where high margins can be achieved.
As an European, there have been many decades since the last time when I have seen any competitive "made in USA" product that is intended to be sold to individuals.
There are products that I buy, which have been designed in USA, e.g. computer CPUs, but none of them have also been made in USA.
When I was young, it was very different, there were many "made in USA" products that could compete with those made elsewhere.
It's shareholder capitalism. Capitalism can be a great thing, but shareholder capitalism defines profits as the only reason for a corporation to exist. Humans are simply resources to extract work or profit from, and destroying the future of the country is an unfortunate externality. CEOs are obligated to behave like sociopaths. Lying, cheating, stealing, and subverting democracy are all good business if it returns value to shareholders. We see this over and over again, and wonder why our society is so fucked up.
And since every major corporation is behaving like this, even if a CEO wanted to give a shit about the country, they can't do anything about it because someone else will be more cutthroat than them and eat their lunch.
The notion of shareholder primacy capitalism is one of those ideas that seems great on paper, much like communism, but its end effects are disastrous.
It seems great cause it’s simple and gives a nice simple answer to “what’s capitalism” and “how to make effective companies”. That intellectual (existential?) laziness is costly long term however.
The idea that “labor is cheaper elsewhere” is simply a neutral statement of economics is wrong — “lower living standards” is not just a economic measure, it’s a political statement about the value of labor and labor conditions. The US and by extension the “western capitalist world” has been exploiting labor since day 0 with chattel then later globally slavery.
The reason Japan was the biggest manufacturer exporting to the US post war, is because the SCAP forcibly rewrote their constitution to be explicitly capitalist. Read “Understanding Defeat” for detailed proof of the 7 year occupation of Japan, explicity to destroy any semblance of Japanese imperial/keretzu culture, and replace it with explicitly capitalist structure. To be fair to MacArthur, they did suggest labor practices, like unionization, but it was a thin veneer suggestion, not forced into cooperatives and syndicates.
China moved into that position post 70s, because Japanese labor began getting “more expensive.” Nixon and Kissinger saw an opportunity to exploit “cheap” labor because there were no protections for workers or environmental protections - so “opening up china,” plus the Nixon shock and floating of interest rates allowed for global capital flight to low cost slave-like conditions. This is why labor and productivity began to separate in 1971, there was a “global south” that now could be exploited.
NAFTA made Mexico and the southern americas the agricultural slave countries etc…starting in the 90s, and on and on just moving the slave-wage ball until there’s nowhere else to exploit.
It’s not a conspiracy to demonstrate that capital will move wherever it needs to in order to exploit “arbitrage opportunities.” Its good business/MBA capitalism 101.
Just like #2 in Austin powers said:
> Dr. Evil, I've spent 30 years of my life turning this two-bit evil empire into a world-class multinational. I was going to have a cover story in "Forbes". But you, like an idiot, wanted to take over the world. And you don't realize there is no world anymore. It's only corporations.
I don't think it's a matter of willingness, but simple global geo economics.
There's places where producing A, whatever A is, is economically more efficient for countless reasons (energy prices, logistics, talent, bureaucracy, cost of labor, etc).
That's not gonna change with whatever investment you want or tariff you put.
But the thing I find more absurd, of all, is that I'd expect HN users to be aware that USA has thrived in the sector economy while offloading things that made more sense to be done elsewhere.
I'd expect HN users to understand that the very positive trade balances like Japan's, Italy's or Germany's run are meaningless and don't make your country richer.
Yet I'm surrounded by users ideologically rushing into some delusional autarchic dystopia of fixing american manufacturing for the sake of it.
How many Americans are dying to and will do tedious labor (not many), as well robots, automation and AI can do a lot of it and or will end up doing a lot of it.
If we want to strengthen America (military & economy) immigration reform is needed! This could be unpopular but such reform could be ...those who want to come here must serve in our armed forces for x amount of years and can bring two to four family members here that are able to start working and contributing to the economy immediately (pay taxes). Rounding up and getting of rid of these eager want to be Americans when we have adversaries with larger armies and we bang the drum on beefing up defense (and our economy) doesn't make sense to me.
Importing immigrants directly into the military sounds like a bad idea. I’m guessing many would be less likely to want to lay their lives down for the new country, so drafting them seems like a great way to end up with a bunch of disloyal troops.
These two to four family member who immigrate would not also be required to serve in the military? If not, what are the criteria used to select the one-out-of-five?
> China generates over twice as much electricity per person today as the United States. Why?
This appears to be completely wrong? All the stats I can find say that the US has about 4x the per capita electricity generation of China.
Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight.
> If you’re building a new factory in the United States, your investment will alternate between maybe it will work, and catastrophic loss according to which way the tariffs and the wind blows. No one is building factories right now, and no one is renting them, because there is no certainty that any of these tariffs will last
Policy by amphetamine-driven tweeting is a disaster.
> 12. Enforcement of the tariffs will be uneven and manipulated
Yup. The 145% level seems designed to create smuggling, and the wild variations between countries to create re-labelling. It's chicken tax trucks all over again.
> This is probably the worst economic policy I’ve ever seen
Per Simpsons: this is the worst economic policy you've seen so far. The budget is yet to come.
> If American companies want to sell in China, they must incorporate there, register capital, and name a person to be a legal representative. To sell in Europe, we must register for their tax system and nominate a legal representative. For Europeans and Chinese to sell in the United States, none of this is needed, nor do federal taxes need to be paid.
This is .. not a bad idea, really. It would probably be annoying for small EU and UK exporters but less so than 10% tariffs and even less so than random day of the week tariffs. Maybe one day it could harmonise with the EU VAT system or something.
(also I think the author is imagining that sub-par workers, crime, and drugs don't exist in China, when they almost certainly do, but somewhere out of sight. Possibly due to the internal migration control of hukou combined with media control?)
> Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight.
It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight. The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point.
This is the part that is so frustrating to me, and not just with regards to tariffs. It's that I see the extremes being so laughably bad (though not necessarily equally - I'm not "both sides"-ing this), and more ludicrously bad is that I've seen positions that don't follow these extremes as being derided now as "centrism". E.g. before the administration's attack on higher education, I do believe a lot of elite universities had completely jumped the shark with their ideological purity tests like required DEI statements. And importantly, there were thoughtful, measured criticisms of these things, e.g. https://whyevolutionistrue.com/2024/02/10/jon-haidt-goes-aft....
But the administration attack is so ridiculously egregious and demands an even worse, government-imposed ideological alignment, that making logical arguments in this environment feels almost pointless.
The weird part for me is this:
While the economy was evolving, Production was offshored from US for cost-reasons, but also in part to focus on higher-skill labor in US, delegating the low-skill mass-production to China.
Over time, China also developed mid/high level skills, complemented their low-skill production offering with it and now competes in new industries, new tech, etc.
So...to compete with China, the country with 4x the US-population, the solution is that low-skill labor needs to return to US....?
Shouldn't instead the focus be to again foster mid/high-skill labor, moving the part that is offshored again towards low-skill labor...?
Thing is, manufacturing in America is up. The 2008 crises dealt a blow, but manufacturing has been building-back. I don't think people realize how many high-value items are made in the United States. Let the East Asians make our mass-consumer junk while we focus on the high-value stuff.
Just goes to show the administration isn't working with facts and doing the hard-nosed analysis required to drive effective policy.
It turns out good policy takes a long time to play out and isn't well suited for the current destabilized US political system where nothing good gets done and the rare things that do get reversed within four years.
That IS what Biden was trying to do though with the CHIPS Incentive Act. He was trying to onshore production of semiconductors in a partnership with TSMC. Didn't do him any favors, and Harris lost the state of Arizona anyway. Americans had the choice between a party that was serious about trying to onshore some manufacturing and a party that wasn't, and it made the wrong choice because vibes, basically.
We were getting the slow and steady version at least for chip manufacturing with the CHIPS Act but Trump has a major need to get credit for everything so that's being torn apart too.
The US faces a much tougher hill to climb though in regards to bringing manufacturing back. China had it easy because they had most of what you could want; a huge labor force that could upskill to manufacturing (the rural poor population), cheap labor (kind of an extension to point 1 but also includes their lower COL and wage expectations over all), and low environmental barriers.
To bring manufacturing back to the US is a way harder lift; we have a lot tighter labor market, if we shift a lot of people to manufacturing someone needs to take the jobs they leave. We (well I at least don't enjoy the idea of going back to when rivers caught fire on the regular) don't want to strip environmental protections back to a level to make it cheap to dispose of waste. The best targets are low labor, high price, high skill goods, like, I don't know, chip manufacturing!
> It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight.
There were a lot of slower manufacturing on-shoring incentives during the Biden administration that would have presumably continued under the Harris administration. Mainly around green energy and electric vehicle manufacturing incentives - which have successfully resulted in new auto, battery, and supply chain factories being built mostly in red states - and semiconductor manufacturing. The Biden administration also maintained and increased tariffs on specific types of products coming from China including EVs.
So I don't think your categorization of the two choices Americans were given is quite accurate.
Well, money talks and it's hard to choose the other option. On one hand bring manufacturing back to US and pay them higher, because otherwise the pay in McDonald's is better with a less demanding physical (cmiiw, don't live in US).
On the other hand, keep manufacturing outside of US for cheaper labor to keep price low and having bigger margin. It's an easy choice to make.
And again this is not a US specific problem, it's almost all of countries nowadays have a massive wealth gap that makes people racing to the bottom of living / working standard.
>It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight.
Excuse me, but I am old enough to remember Biden's program such as CHIPS, a slow and steady protection and promotion of home-grown industry.
America had the choice. It chose wrong. Are Americans going to assume the consequences of their choices or are they going to lie to themselves they weren't given the choice? That last option would fit more with the "character" of the America nowadays, the one who voted Trump: make mistakes and blame someone else for it.
> The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point
The slow and steady way that post-WW2 Korea and Japan did needs a unanimously agreed 10-20 year long game plan between industry and government, which is incompatible with democracies who change colors and strategies every 4 years where the new administration begins to tear down everything the previous administration did because they serve different voter bases and corporate lobby groups.
It is also incompatible with the US since a lot of corporations made bank due to offshoring and will fight it every way they can since they don't want to deal with costly US labor who can unionize or sue you for millions if they break a finger at work. Even TSMC Arizona had to bring half the workers from Taiwan, and it's not like they're making tchotchkes.
> The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point.
I think this is because China is an autocracy, so they can make long-term plans. Democracies that swing as wildly as the US currently does is no place for that, and that's not limited to the new administration.
Was it absent? The "Green New Deal" was hitting on some of that. You can't beat "<Some other country> is going to pay for it" and "Coal jobs are going to come back", especially when there's no accountability or fact checking.
But Americans were given that choice? The chips act was an industrial policy play based on the industrial policy playbook of east asian countries like South Korea and Taiwan.
I'm not a fan of industrial policy or the chips act, but it seems to be just the choice you are asking for.
I find it annoying that you think the other choice was “offshoring is great.” Spending on US factory construction surged under Biden. This was largely due to stuff like the IRA and the CHIPS Act. If voters had made different choices in November 2024, in Congress as well as the Presidency, I think we could have had even more aggressive industrial policy — instead of this absolute shitshow that will permanently damage the US’s economic position.
On the other hand, I am a believer in the idea that voters get the government they deserve. So maybe we deserve this.
The candidate who opposed Trump during the primaries would have done something very similar to what you said. But then she was born with ovaries so the Republican Party wanted nothing to do with her as the top boss.
> China generates over twice as much electricity per person today as the United States. Why?
>> This appears to be completely wrong? All the stats I can find say that the US has about 4x the per capita electricity generation of China.
I believe the comparison is absolute production, not per person.
Anything else would be odd. Considering China has 4x the capita of US it would mean that in absolute terms China is producing 8x the energy of the US. In reality it seems to be roughly 2x (although both sources are a bit outdated):
US 2023: 4.18 trillion kilowatt-hours (kWh) of electricity from utility-scale generators. Additionally, small-scale solar photovoltaic systems contributed around 73.62 billion kWh 1.
China 2021: 8.53 trillion kilowatt-hours (kWh) of electricity
--
But the staggering difference is how much of the electricity is attributed to the Industrial sector:
China: 70% (~6 trillion kWh)
US: 26% (~1 trillion kWh)
So overall China allocates 6x the electricity to production compared to US...
China electricity consumption is growing by 6-8% a year and is likely to hit 10500 trillion kilowatt-hours in 2025. Which at $0.10/kwh the avg is a $1 trillion dollars. Though from what I understand in China home users are charged about $0.07 and industry $0.08 so $7-800 billion a year on electricity alone.
They are rapidly moving to renewable with grid scale BESS auctions avg $66-68/kw they are likely to have electricity prices at $0.01-0.02 over the next few years. I think it will be extremely tough to compete with China in manufacturing unless there is huge investment in renewable and storage systems to keep electricity prices competitive with China who are going to move on from coal over the next decade.
> I believe the comparison is absolute production, not per person
Original article definitely said "per person".
China allocates much more to industry and/because it allocates much less to personal consumption. Especially things like air conditioning. US per person consumption is still 2x that of EU average.
China is also more electrified generally than the US. They only just pulled ahead but the rate of change is startling.
Since 2000 they've gone from 10% of final energy being electricity to nearly 26% while the US has been basically flat around 23% and they are both predicted to grow (or not grow) at roughly the same in the next few years.
Because VAT is collected at the border on imports, some people (wrongly) consider VATs a tariff. Considering that VAT is rebated on exports, VATs are trade neutral.
Sales tax as implemented in the US is not as tax efficient as VAT due to the impact of sales taxation on intermediate transactions during manufacturing. VAT only taxes the incrementally the value added at each transaction) whereas sales tax applies to the entire value at each stage.
On crime they most centrically do, watch the China Show (not the bloomberg one) on youtube. One example given on the show is that Once you go into northern villages and small towns you start seeing propganda posters on why you shouldn't take drugs. Homelessness is widespread and present too but you just wont see it in city centers more on the outstkirts.
Police in cities will beat homeless people and get them back on buses to where their hukou is, so the homeless that remain are very good at hiding. Hostile architecture is also very common in China. But there is a lot of sub quality housing (eg in sub-basements that lack windows or good ventilation) that allow much of the working poor to at least be technically housed even in expensive cities (many restaurants also provide housing for their staff in the dining area after closing, or did at least 20 years ago). The outskirts used to have more slums than they had today in Beijing, most of the slums have moved into sub-basements as far as I can tell (called the “ant tribe”).
Crime really is much lower than it was a decade ago. People have more money, societal trust is higher. Drug use in clubs has always been a thing, but China differs from the USA in that their is no social support at all for addicts (so they either get clean with help from their family or they die).
Do not watch it please unless you want to consume worldview-distoring propaganda and become more ignorant as a result. It's made by 2 American expats who gotten kicked out of China when visa-requirements were tightened, and no-skill immigrants were no longer welcome.
They've become anti-China youtubers serving the hungry China-hating audience on how China is bad and a paper tiger.
Instead watch this guy (https://www.youtube.com/@Awakening_Richard). I'm not saying he's unbiased, either, but he's thoughtful and I think he brings insight into how the Chinese intelligentsia thinks about how the world works.
But back to your point - it's oft repeated that Chinese population decline will destroy China in the long run and poverty in Chinese society.
The TLDR version is that about half of the Chinese population lives in desperate poverty (and are economically invisible), and just a couple decades ago 90+% of Chinese lived like this. One cannot bring about a transformation into an industrialized wealthy lifestyle overnight, but coming from the experience of the past decades, the Chinese have been remarkably effective in this, and the following decades will see these people lifted up to modern societal standards as well.
By this alone, one can conservatively expect a doubling of Chinese GDP, as there will be twice as many consumers and laborers who consume and work at the level of the current workforce.
This also means that China has a huge and high marginal utility domestic demand for goods, and even if sanctioned, they wont run of people to sell to.
When I visited China, the expats told me that recreational drug supplychains were strictly compartmentalized. There was the supply of illicit drugs for Westerners (imported by the sons of Nigerian businessmen, the cliche went), the supply of illicit drugs for Chinese people (who only dealt with Chinese people), and then there were the vast array of drugs that are completely legal to get over the counter in China without a prescription (at a pharmacy or CTM shop) that would be controlled substances in a US pharmacy.
That the official line from the CCP was that China had no drug problems, no prostitution, a variety of other things†, and that there were no gay people in China; That these were all Western ailments.
Urban China is a panopticon state not only digitally, but culturally. Housing is much tighter than the US, walls thinner. Your underwear is hung out to dry in clear view. "Privacy" in terms of politeness norms mostly consists of pretending you don't see or hear a thing. Neighbors generally know a lot about what each other are doing. 7% of the population are Party members, and in Marxist-Leninist systems this connotes something closer to earning a military officer commission; The Party is not trivial to apply to, the Party is strictly regimented, Party rules are held above and before the civil law, Party members are expected to be informers and have a strict lawful-good orientation from the perspective of the regime. Penalties for commerce in illicit drugs are even more extreme than the US, and due process is not bound by the same presumptions.
There are lots of factors conspiring against the sort of informal US inner city street drug distribution being as big of a deal in China.
Disclaimer: All my information is more than a decade out of date, and was only ever a thin slice of opinions from mostly Westerners in some first tier cities.
† From an academic paper: "2 The Six Evils are prostitution, drugs, selling women and children, pornography, gambling, and feudal superstition. Criminal gangs, or triads, are often counted as a seventh evil. These vices represent impediments to modernization and throwbacks to social problems that were present prior to the Communist takeover. Elevation of a problem to an "evil" symbolizes that the Beijing regime will mount a "campaign" or "struggle" against it."
> hat the official line from the CCP was that China had no drug problems, no prostitution, a variety of other things
Reminds me of a book I read years ago about the Soviet Union. Officially prostitution didn't exist there either, so there were no laws on the books about it. Enforcement usually was around various "antisocial" laws and usually for the street-walkers. Crime in general was mostly fine, so long as it wasn't a threat to the state, against well-connected people, or otherwise visible.
No wonder Russia got so bad after the strong state dissipated.
> The Party is not trivial to apply to, the Party is strictly regimented, Party rules are held above and before the civil law, Party members are expected to be informers and have a strict lawful-good orientation from the perspective of the regime.
Once again, want to point out how this is simply American leadership not wanting to accept their loss and move on. For the first time in the history they're not being perceived as the "global leader", and that's not acceptable from their POV. Now it's just freaking out and hoping that some extreme policy changes will change the course. From my personal experience, most people act this way when they're in distress and can't think ahead because of all the externalities.
This isn't just ego. This is an impending existential issue.
America needs to increase manufacturing capacity if it wants to maintain hegemony and possibly world peace.
China will soon have the ability to take Taiwan and Korea and Japan. If that happens it's game over for any American interests and perhaps democracy as a whole.
Wargames[0] paint a grim picture of an upcoming conflict between China and America over Taiwan with the US barely winning at a great cost including the loss of many ships, aircraft, and the depletion of missile stocks.
The Chinese have a naval production of 260 times that of America and account for an ungodly amount of global steel production so they'll be able to bounce back faster than the US can. With a lead time for producing American missiles measured in months and years it will be just a matter of time before they take the countries in the region that are critical to American manufacturing if they're so inclined.
I'll charitably assume you meant first time in post-war history.
USA as "The Global leader" didn't emerge until after Europe was ravaged first by The Great War and then WWII.
No-one was looking toward the USA for leadership during The Great Game. Even by the time of the outbreak of WW1, the size of the USA's army was very small, half the size of the British army, which was itself considered small compared to the French and German armies.
US foreign policy was still inward looking, protectionist and isolationist until it could no longer ignore the case for war.
The foreign power projection really didn't kick into gear until 1945 onward and the determination not to let too much of the world fall to communist ideas.
Regarding the potential to annoy small businesses, it’s actually pretty easy to hire a firm to represent you in the EU. You’ll need a lawyer at some point anyway so it’s often the same firm.
If we had the same requirements here in the US it would likely become the same.
Delaware / Ohio corporations? I think those already exist for 'business friendly' incorporation states. Might also be Nevada and Texas, though I'm more speculating there or recalling singular offhand cases I heard about.
That is really the big problem with the current policy in the US: it's completely unclear what the policy is and how long it will last. This is not a stable climate for investment. Would you invest in a country where the president plays Russian roulette with the economy?
Most corporations will wait it out. Corporations that have an established interest (like Big Tech) will bribe Trump to get the exemptions they need to continue their business. Everybody else will have to decide how much they will want to depend on such an openly corrupt system. There industries that see no problem in dealing with corrupt regimes.
> To sell in Europe, we must register for their tax system and nominate a legal representative.
American companies? Register for EU tax system?
I can buy from anyone in the US and worldwide for that matter, and as long as they're willing to figure out shipping they don't need to register anywhere, I can handle taxes myself when receiving.
Tl;Dr: The author makes a strong case for broader, higher tariffs but understands it is impossible to help American manufacturing knowing that the next administration will cave to China and Wall-street and immediately move to undo everything. The solution is to work together to make American protectionism work.
1. They are not high enough: Correct. Raise them more.
2. America's industrial supply chain is weak: That is why we need to bring the factories and resource extraction home.
3. We don't know how to make it: Perhaps we can steal the IP like China? We will figure it out.
4. The effective cost of labor in the US is higher than is looks: Then raise the tariffs higher.
5. We don't have the infrastructure to manufacture: You have to build it first, This will get cheaper and easier as we continue to bring industry home.
6. Made in America will take time: Blaming permitting time and Bureaucracy is a ridiculous excuse. The federal government can override all state and local requirements here. Its a choice to slow projects down.
7. Uncertainty and Complexity around tariffs: Democrats will have a hard time undoing progress if there is movement to reshore industry. War over Taiwan seems basically inevitable and this will harden resolve.
8. Most Americans are going to hate manufacturing: Most (well a very large and non-negligible percent of) Americans are going to loose their jobs because of AI. Most of us hate our jobs already, manufacturing will pay better. There are always endless service industries...like delivering food, if they do not like supervising a robotics controlled factory. It is disingenuous to imagine a return of American manufacturing without Huge AI and robotics investments. More factories will be lights out than the alternative. The jobs will be in servicing the robots, computer systems and quality control. We aren't talking Rosie the Riveter and the author must know it.
9. The labor does not exist to make good products: This is why there must be some discrimination over tariffs and why they should not be a simple even percentage. We can choose to bring back GPU manufacturing but pass on fast fashion. And during the process of negotiation we can give up those industries we do not want in exchange for support of a China embargo.
10. Automation will not save us: The author cannot imagine a world where manufacturing is not motivated by global trade. They fail to understand that it does not matter how much more productive China is when protectionist policies prevent trade. The goal is to get America to a place where it can manufacture everything it NEEDS on its own.
11. Americans file lawsuits: Good- this will increase the quality of goods we enjoy and we can get past the disposable foreign garbage that floods our markets.
12. enforcement will be uneven and manipulated: so get on board and help to improve it, stop undermining the attempt to help this country.
13. tariff policies structured in wrong way: Really not a terrible idea to have a disparity in tariff between input goods and finished goods but it is a half measure. We need the entire supply chain from resource harvesting, to tooling, to components to final finished manufacturing if we want to ensure national security in a world post-NATO.
14. Michael Jordan sucked at baseball: Was there serious consequence to MJ trying his hand at baseball? We got through COVID. We have survived massive supply disruptions and the market has been pumping as hard as ever. If you are not currently retired it is absurd to worry about fluctuations in the stock market. And if you are, you likely invested in companies that sold out America.
> The goal is to get America to a place where it can manufacture everything it NEEDS on its own.
That is just incredibly stupid.
The only country that tries to do this is the hellhole known as North Korea and even they fail. No country is an island and doing this will just ensure America becomes a third world country or worse
The other day I saw the results of a poll [1] where 80% of Americans thought the *country* would be better off if more Americans worked in factories. However, only 20% of Americans thought that *they* would be better off if more Americans worked in factories. It was surprisingly bipartisan.
In other words, people like the idea of this, but no one actually wants this.
Americans are cosplaying (voting their belief system, not what they'll do, the "revealed preference"), as they do as farmers [1] [2] [3] [4], as they do as "rural Americans" [5]. It is an identity crisis for tens of millions of people [6]. Their crisis is our shared political turmoil. Happiness is reality minus expectations.
From the piece: "The people most excited about this new tariff policy tend to be those who’ve never actually made anything, because if you have, you’d know how hard the work is."
Agreed and the same people do a lot of their shopping at Amazon/Dollar General/Wal-Mart where low price goods are only possible because they are made off shore for much much lower wages. Bringing that manufacturing back here would destroy their buying power.
I do find it interesting that a lot of these same people are against raising the minimum wage because "it will bankrupt all the businesses" but somehow think that bringing manufacturing for the goods they buy back to the US won't do the same. At best, going from off-shore labor costs of say $15/day to $15/hour (minimum for US workers) is an 8x multiplier and will somehow magically work but a 1.5 multiplier on minimum wage is just untenable for any business.
Honestly, it is mostly an emotional response around "fairness". They don't want others getting a "raise" when they don't "deserve it". However, everything they get is 1000% deserved. The greatest trick the rich ever pulled was convincing the middle class that all their woes are the fault of the poor. The political comic of "That foreigner wants your cookie!" captures it pretty well (imo).
> people like the idea of this, but no one actually wants this
As others have pointed out, this is not a contradiction. (Read their reply.)
However, the question of 'Do YOU want to work in a factory?' is heavily influenced by the fact that we don't see factory work as a high-paying career, or a career at all. Part of the solution to the factory problem is enhancing the value proposition for the employees.
I am ambivalent toward tariffs, but the idea is that if we make foreign products more expensive then the higher price of domestic goods becomes more palatable by comparison. If paying domestic workers more raises the price of domestic goods, and if people are willing to pay that price for whatever reason, you will start to see growth in manufacturing.
It's also silly to reject long-term goals simply because achieving them is difficult.
> If paying domestic workers more raises the price of domestic goods, and if people are willing to pay that price for whatever reason, you will start to see growth in manufacturing.
We ran this experiment for decades. It turns out that Americans are not willing to pay the higher prices, which led to our manufacturing consolidating around higher-value items.
This notion that we should move Americans from high-productivity jobs to lower-productivity jobs, and that such move will somehow enhance our prosperity is nutty. Lower-productivity jobs mean less income for workers, means less income in the system, means lower prosperity for all Americans. Moving tens of millions Americans to higher-productivity jobs while maintaining relatively low unemployment has to be seen as one of the economic success stories of the modern age.
Separately, Americans do not feel like this happened. That's a different discussion, about allocation of wealth. Our poorest states have higher GDPs per capita than many "rich" western EU countries. Mississippi has a higher GDP per capita than the UK. The difference is that the US has designed a system where every citizen lives a precarious existence, potentially a few months from destitution while other rich countries have not done that. We are allowed to make different choices in the US if we don't like this outcome.
Instead the products might just cease to exist. Or cease to exist in a particular market. Tariff-free trade brings into being products or markets that previously didn't exist.
> If paying domestic workers more raises the price of domestic goods, and if people are willing to pay that price for whatever reason, you will start to see growth in manufacturing.
Why would you need to pay them more? Remove their legal ability to organize, cripple their social safety net, and they will either work or die.
I'm not advocating for that, but it does seem to be the path we're deliberately taking.
This lines up with the experience of the people I know who have worked in factories, there seems to be a disconnect with all these pundits and economists (and many people on the internet in general) talking about basic manufacturing work and the people I have met with actual factory jobs. The pay could've been worse and it wasn't the worst job I've heard of but it also wasn't great (they said they would've preferred a boring office job). There's a reason the pundits talking about the virtues of manufacturing jobs are pundits.
Now that is an elegant solution! They are starting to punish people with the wrong opinion and strip them of their citizen rights already; instead of flying them to El Salvador, might as well keep them as slaves in a federal prison! Pesky dissidents and manufacturing problems solved at the same time!
Would interesting to know what percentage themselves or their own children wanted to work at a factory. Can tell with a huge degree of confidence for all practical purposes thats 0.
Its always easy to expect other people to make sacrifices working these jobs, while imagining you and your kids working office desk jobs.
If that 20% never had a factory job before, it is not a reliable indicator. It just means their current job is already shitty. They may get a factory job and realize that they were better off flipping burgers, even with less pay.
From TFA:
> When I first went to China as a naive 24 year old, I told my supplier I was going to “work a day in his factory!” I lasted 4 hours.
I started out asking myself, what would it take for American's to be okay with factory work. For example, my grandfather worked in a GM plant in Kansas City for most of his life. I mean he had started out wearing suits and doing books for a bank when he was young and fresh out of high school.
And then I remembered, oh yeah, the Great Depression happened when he was young and he was let go from his bank job — the bank folded. When the decent paying factory job at an auto assembly plant eventually came along he probably jumped at it.
Everyone wants more manufacturing in the US, but nobody wants to be a factory worker. People would rather starve or go homeless than work in a factory. Until Americans overcome their pride, this is going to make building manufacturing in the US very difficult.
Everybody wants to be a factory worker if the compensation is good. Why do you think Chinese people work in factories? Because it pays better than other jobs they can find.
"But if factory wages are good then products will be expensive"
No, because the wages for the factory worker is less than 1% of a products shelf price.
If 20% of people really think they'd be better off as factory workers, that's actually kind of a lot. Can you imagine if 20% of the working population really did work in factories? That's an enormous number.
> In other words, people like the idea of this, but no one actually wants this.
Misinterpretation of data.
> The other day I saw the results of a poll [1] where 80% of Americans thought the country would be better off if more Americans worked in factories. However, only 20% of Americans thought that they would be better off if more Americans worked in factories. It was surprisingly bipartisan.
Compared to the current percentage of people employed in manufacturing (9.9% - 12,759,129 / 128,718,060), there are **more** Americans that would like to move into manufacturing, not less.
Let's me real... 80% of the hard shit in US factories will be ran by mexican migrant labourers like in agriculture. And maybe that's enough of a "win" for US interests.
It says "only 20% of Americans thought that they would be better off if more Americans worked in factories." Which isn't the same as believing they would be better off if they worked in a factory.
I agree with that sentiment. I would be better off if more of you, just not me, worked in factories instead of trying to compete with me for my non-factory work.
Jonathan Blow's "Preventing the collapse of civilization" [1] makes a similar point. It is easy to assume that, if we can build EUV machines and space telescopes, then processing stainless steel and manufacturing PCBs is baby stuff, and is just waiting for the proper incentives to spring up again. Unfortunately that is not the case -- reality has a surprising amount of detail [2] and even medium-level technology takes know-how and skilled workers to execute properly. Both can be recovered and scaled back up if the will is there. And time -- ten or twenty years of persistent and intelligent effort should be plenty to MAGA :)
> But the important question is - is it worth it? Should we be doing something more valuable instead?
It's hard to quantify. E.g. the CHIPS act is a strategic thing in case TSMC is disrupted for some reason. How valuable is insurance? How much useful work (and skill) do you ship overseas in exchange for promissory notes[0]?
People seem to want jobs with the macho kudos of manual labour, but with the physical comfort and salaries of email jobs, and I have some very bad news about that combination.
IMHO, with the Big Tech boom winding down, what is more valuable for us to do? Manufacturing could prepare us for the next wave, whatever that might be.
I've seen this brought up with board games that are now primarily made in China, because injection molding is cheaper there especially for small quantities. The US could make the board game minis, but everyone who is capable of it in the US is producing high value high quality aerospace, industrial, medical parts. It's a waste of their time to produce small runs of toy parts.
Depends -- do you want the US to become a vassal state of China? That's the trajectory we were on. China is going to catch up rapidly on technology, AI, and services, and before a few months ago the US was going to continue falling behind in every other conceivable area.
Depends on how evaluate what is valuable. E.g. here in europe a lot of people think subsidising local agriculture is not valuable and we should just import cheaper food. On the other hand, a lot of people agree that food security is kinda valuable by itself. And want similar security in more fields. In that sense yes, doing „low tech“ is valuable in the long run.
I think large scale modeling and allocation for "more valuable" has been overly narrow - insufficiently diversified for uncertainty/unknowns, and subtly incorrect for western nations for decades now
It is if war is in the future. And I’m not saying this as hyperbole but based on statements made by NATO secretary general (both Rutte, previously Stoltenberg and former General Bauer) about Russia’s military production outproducing NATO, or Finish President Stubb speaking on the powers of the world shifting and the need to ramp production which were echo’d recently by Macron, or the Arctic region soon to become a contested region with China and Russia attempting to stake their influence in the area which is obviously at conflict with the personal interests of the other countries in the region.
It seems obvious to me that the world is a bit hotter than before 2022, with the likelihood of some conflict between powers of the world coming to pass being greater.
If production of raw materials to usable materials is all contained within countries that are deemed to be unfriendly by the one lacking this production capability, it’s a clearly in their vested interested to not be in that situation.
Only problem is there is a seemingly idiotic US administration attempting to address these deficiencies, unless there’s some weird 4D chess play going on, but I’m not convinced it’s that.
I think the collapse of the American Empire is no more preventible than the collapse of the British, Spanish, or Roman empires. The issues with the US being the reserve currency has been known for a while now (and was even predicted by Keynes before the Bretton-Woods summit):
Any discussion of "bringing back manufacturing" that doesn't mention government spending or social programs to educate and upskill the population is not genuine. The current leadership are fools and ideologs who will only hasten the decline, which might actually be better globally if it lowers emissions. Time will tell I guess.
Empires come and go, that's just a fact of life. The question was whether they'd fall back relatively gracefully like (Western) Europe, now with multiple countries ranking at the top of "World's Happiest Countries", or whether they'll become Russia 2.0 with the biggest guns, richest oligarchs, and the worst quality of life.
It's still far from played out, but right now they're solidly on the road to Russia 2.0, with decades-long trends pointing that way.
The fall of the Soviet Union was arguably more graceful than the two world wars and myriad of colonial worlds it took Europe butt out. Even if you exclude the world wars it probably holds.
The end of the empires of Western Europe was not graceful. Not even close.
It may seem that way because the countries within Western Europe that had done the empires are now stable and prosperous but what about the countries of Africa and Asia? The ones who had been part of those same empires of Western Europe?
If you talk to people in these countries of Africa and Asia I think you would find that people there would strongly dispute the idea that the empires of Western Europe ended in any way that could be called "graceful"
This is explicitly referenced in “A User’s Guide to Restructuring
the Global Trading System”, written November 2024 by Stephen Miran—current Chair of the Council of Economic Advisers of United States—which outlines the general ideology and strategies behind the current tariff situation.
I'd believe that article more if Trump hadn't called on congress to eliminate the CHIPS act, or if tariffs+Musk hadn't undermined it, or if republicans were for the Green New Deal, etc. If you're interested in onshoring, the smart thing would be to work on a targeted approach in high-value areas.
It's a really complicated manoeuvre even if you're not actively trying to shoot yourself in the foot. Eg Domestic factors (automation, corporate offshoring decisions, etc) also contributed to manufacturing job loss. A weaker dollar would probably help, but isn't a silver bullet.
The main article for this post goes into this in a lot of detail.
The American Empire never existed, because it never could. The US made the explicit decision not to occupy the defeated forces after WWII, save for strategic forces in place to protect the interests of the host countries. The US opened its market (the only market of size left and still the largest consumer bases in the world, by far) with no tariffs.
What the US got in return was cheap goods and a whole lot of debt. What the world got was stability. The US is no longer interested in subsidizing the global order.
The current discussion re: “bringing back manufacturing” is making the mistake that everyone always makes when Trump is involved: taking him at his word. The point isn’t to bring back all manufacturing. The point is to profit off of imports. Some manufacturing will return — whatever is high value added and benefits primary from cheap shipping internally - but nobody thinks that Americans are going to sew t-shirts.
Also, those who are looking for an American decline as comeuppance for being unkind to allies are going to be sorely disappointed. The US has everything it needs to be self sufficient, and no matter how batshit crazy the leadership is, it’s still — still — the safest place to park capital, still the largest consumer market by far (more than twice China), has a stable demographic and a middle class country to its south that brings in lower cost workers as needed. Not to mention being totally energy independent, bordered on two sides by oceans and with more potential port coastline than the rest of the world combined… and also holding the virtually all of the world's supply of high-purity quartz, which is a requirement for semiconductor production.
You don’t have to physically occupy a country to exert influence over it, and we weren’t “subsidizing the global order.” We profited from the order, so continued to bring it about. How do you think we became the economy we are today?
> the collapse of the American Empire is no more preventible than the collapse of the British, Spanish, or Roman empires
They each had longer runs than we’ve had.
My pet theory is lead. From 1950 to 1980 we birthed a leaded generation [1]. Today, up to 60% of American voters were born before 1975 [2]. (Voters born between 1950 and 1980 came into the majority in the 1990s and should fall into the minority by 2028, but only barely. So in summary: Iraq War, Financial Crisis, Covid and Trump 47. It won’t be until the 2040s when truly unleaded voters, those born after 2000, command a majority.)
America's empire isn't really built on blantant colonialism (although we do that, too). It's built on "planting" US favorable governments all around the world.
I mean, we have half of Africa shooting themselves in the foot over and over for our own benefit. And every time it looks like an African nation is going to do something about it, some counter-military force appears out of nowhere (with US arms?) and some important political heads are assassinated.
This isn't a conspiracy theory, either. The destabilization of world governments done by our government to our benefit is well recorded.
Puerto Rico, Hawaii, Guam, American Samoa, are locations that are directly under US control. The entire western hemisphere is within our sphere of control, and a huge chunk of the planet was either directly aligned with us (EU, AUS/UK) or was compliant for fear of regime change.
The country itself was founded on the destruction of dozens of civilizations, a victory so total you don't even consider it as part of US imperial conquest. I can't believe I even have to explain this to people on here my God.
Missing reason #15: commercial lenders with a brain realize that these tariffs and this self-imposed domestic crisis will dissipate in the next ~6 years. Nobody's going to lend in this market to try to spin up a new greenfield project in the US that will take years to get operational when they can sit and ride it out - ESPECIALLY at these interest rates.
The government could make loans directly and guarantee purchase prices, but it's also stopped making payments congress committed it to, so you'd be crazy to trust any promises from the administration.
This is a big one. Once upon a time, the Democrats and Republicans listened to the same think tanks, so there was continuity in planning. Now, they seem to be opposed to plans simply because the "other side" came up with them. The whiplash we've been experiencing has torn the economy apart and scared businesses away.
You’re almost right. This is not a both sides issue. One side has made a concerted effort to get us to this point, and it started in the 80s or before.
Not only will it take years to get operational, there is no way it would ever reach the scale and reach of Chinese manufacturing, not in six years, not in sixty. Even if they throw trillions of investor money at it.
China and others are clearly demonstrating the power of capitalism with state support. The US is too busy infighting and keeping capitalism and politics separate (small government, let the market decide etc). You wouldn't find enough employees that want to work in manufacturing; you'd need millions to even try and get close to what China is doing.
Now I'm not actually OK with what China is doing, the paragraphs about worker conditions were quite telling. But I will recognize that it gives them the upper hand in manufacturing that the US hasn't had since the 50's.
(meta: I'm gonna have to specify "the 1950's soon" don't I?)
> demonstrating the power of capitalism with state support
This is actually an excellent reason for tariffs. If we can't beat them at their game because it goes against our principles, then just don't buy their stuff.
The tariffs most certainly will dissipate but we can't discount the chance that they may be replaced with actual written in law voted on by congress and signed by the president taxes that have similar but much more durable effects.
Manufacturing and heavy industry really hates off-shoring. They only do it because the sum total of other policy makes it the only viable option. I can see them taking a decent haircut in pursuit of some longer term goal.
I have a suspicion that the coming tax cuts will be extreme, and the gaps in critical funding will be covered with tariff income. This will essentially make tariffs a cornerstone for government finances.
Political suicide to roll back tax breaks if they are primarily for the <$150k earners, like trump wants.
If it looked like congress was eager to vote these tariffs into law, things would be different, as that sentiment might outlast the current administration, but that doesn't appear to be the case.
7. Uncertainty seems overlooked these days. The job of politicians is to make people and businesses dare. Making people dare getting an expensive education or starting a business or hiring your first employee or whatever it might be. What that requires will vary (if it's a social security system or a tax break for new companies or whatever). But something it always requires is trust in the stability. That the calculus for an investment is valid over N years. That laws or taxes don't swing wildly with political cycles.
That has been the bane of brazil for decades, every politician, at every level, undoes or stops whatever the previous politician was doing so there's absolutely no guarantee what you're doing today will still work tomorrow.
Its a terrible state and situation to invest in a business doesn't benefit anyone. My hometown had a large cultural center built by the mayor, he couldn't run for reelection again, new mayor is elected, completely ignores the whole thing was built and lets it rot. Everything is only done for an election cycle, the next cycle could bring something else entirely.
Its terrible to live in a place like this, Americans have no idea how bad this is going to be for the country.
Its the integration and overall combined effect of the entire industrial pipeline that makes China so incredible. It processes all the raw materials and the recycling/reuse of off cuts through every possible way to turn those raw materials into components and then into goods with very little need for import from other countries. Its the complete system for a huge variety of goods.
To compete with that the entire pipeline from raw materials through components and final product needs to be reproduced and its taken China 40+ years to build up to this capacity and capability.
I think its something more countries should consider and do for certain pipelines but we are in a world with vast international trade and the winner(cheapest) takes most of the trade so whatever it is needs to be worth while within country.
Canada and the US are long time allies and should be able to benefit from eachother without much hesitation. China is an adversary, big difference in posture.
Even getting workers to the factory is a concerted effort of trains and public transport, Americans would quickly clog the highways with millions of single occupant large vehicles without first investing in more efficient ways to move people
Scenario: someone builds a factory complex employing thousands of workers.
Government builds and improves infrastructure and roads leading to and from that factory to get the workers in and out,
as well as getting raw materials in and finished goods out.
Someone properly points to the roads and says "you didn't build that",
pundits freak out.
They saw extra profit $ and didn't consider the consequences. I suspect there was a bit of racism involved where they thought the Chinese would never learn to go from manufacturer to designing products nor master the entire pipeline and end up competing with them in the domestic market. China obviously did because they funded engineering education heavily and learnt all they needed to and surpassed the companies they built for some time ago.
This is true, and at the same time, this article is absolutely rife with unsourced, unserious points. However insane Trumps plans, the fundamental "facts" presented here are largely a joke.
> Chinese workers work longer hours more happily and they’re physically faster with their hands; they can do things that American labor can’t. It’s years of accumulated skill, but it’s also a culture that is oriented around hard work and education that the United States no longer has. In China, there are no people who are too fat to work. The workers don’t storm off midshift, never to return to their job. You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
It's an actual joke to present something with such a derogatory view of the median American worker with no data to back it up. Most of America's "labor class" is in fact Mexican, the country with the highest annual hours worked per year. Secondly hours worked does not relate directly to productivity. American workers are the most productive in the world. [1]
More importantly, _we don't manufacture like this anymore, even in China_. Doing "acrobatics" on the factory floor is now obsolete. Much of what's said here fails to acknowledge that we would _not_ build our supply chains the same way as China does. China had a surplus of human labor (one that's facing an impending demographic crisis) and so used human labor in ways modern western countries would not and do not.[2]
Trump just blamed Zelensky for the war in Ukraine again. The entire administration keeps saying they will make Canada the 51st state and "destroy canada economically". They want to take Greenland by force. I don't think America cares much about democracy anymore, only dollars. China will take Taiwan and US will will keep buying chips like they always did.
The relations between Taiwan and the US have nothing to do with "democracy". First it was about anti-communism, when the Chinese government fled there and the mainland was taken over by the communists. Now it is about anti-communism and "China containment". The fact that Taiwan transitioned to democracy in the 1980s is just convenient to feed the public that this is indeed about "democracy", "freedom", the usual.
As a historical point, the US never had a problem with Taiwan being handed back to China at the end of WWII, since it is what happened. Again, this is all just a tool against the communists and then against China's increasing power as a whole.
America does need to bring back manufacturing. Not because a manufacturing job that pays $25/hr is somehow better than a service job that pays $25/hr.
The US needs to bring back manufacturing for strategic reasons and in strategic areas.
And it needs to have the capability to scale up manufacturing in response to emergencies.
But also, importantly, the US doesn't need to do this by onshoring all manufacturing. Near shoring and friend shoring will have to be extremely important components of adding these capabilities, and unfortunately, teh actions the US is taking will likely hurt nearshoring and friendshoring and will end up making the US less strategically capable in manufacturing even if it's able to reshore a significant amount of manufacturing.
A skilled assembly worker makes closer to $30 or $40 an hour than $25. And that doesn't account for overtime. A skilled tradesman can make $40+.
Manufacturing is skilled, well-paid labor that requires commitment, attention, and care. That is why there's a shortage of labor--not because of wages.
>>A skilled assembly worker makes closer to $30 or $40 an hour than $25. And that doesn't account for overtime. A skilled tradesman can make $40+.
In theory. In practice the numbers are way lower.
As some one who has done quite a big time in India IT services firms, have lots of war stories, our Delivery manager would often tell us if US managers only knew adjusted for regular all nighters, whole week on-call hell weeks. Development phases where teams would be working days at stretch in office. The actual per hour rate of an engineer in India is at best $1 - $5 an hour. You just can't bill the customer that way.
Only reason why this even works is India is still poor and people work for anything.
Im sure, adjust for everything(in real practice) manufacturing hourly wages in China aren't all that different and wouldn't be surprised if they are at something like $1 per hour, or something such.
Americans have little idea how much affluence and luxury their ordinary citizen has. Most of the world would do anything even to be poor in the US.
Fair enough to say nobody in the US is signing up to work a hellish factory job for $1/hr anytime soon.
The policy should be collaboration with China. 50/50 state subsidized joint ventures with Chinese corporations on EVs, raw materials refining, solar panels and batteries, etc. At the same time, a gradual and predictable tariff in those targeted areas. All of this, with the explicit consent and collaboration with the Chinese government. You could kill 2 birds with one stone and focus these policies on green energy and energy independence -- lessening the effects of climate change.
That is what you would do, if you really cared about bringing manufacturing back.
As of today, there is absolutely no off-ramp. The Dem policy is basically trump lite with respect to China. We are moving in lockstep towards making them a geopolitical adversary, and for what?
If we're going to defy the invisible hand, we should at least do it to benefit people in a concrete way - health care, education, UBI. Doing it for "strategy" is equivalent to simply burning the money people would have otherwise saved by doing nothing.
The components of a strategic manufactured product can be as simple as an injection molded switch, a LiION battery, capacitors, copper wire, etc., so the notion of bringing only "strategic items" back is as much a myth as the idea its mostly coming back to the USA. The goal here is to diversify the supply chain globally so its not concentrated in China. Internally this is sold as bringing MFG back to the USA (will happen to a noticeable degree), but that's not the actual plan.
> Chinese workers work longer hours more happily and they’re physically faster with their hands; they can do things that American labor can’t. It’s years of accumulated skill, but it’s also a culture that is oriented around hard work and education that the United States no longer has. In China, there are no people who are too fat to work. The workers don’t storm off midshift, never to return to their job. You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
he knows a lot about manufacturing but weirdly not much about labor. very unsubstantiated, derogatory comment.
it gets worse!
> In China, there are no people who are too fat to work. The workers don’t storm off midshift, never to return to their job. You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
> Chinese workers are much less likely to physically attack each other and their manager. They don’t take 30 minute bathroom breaks on company time. They don’t often quit because their out-of-state mother of their children discovered their new job and now receives 60% of their wages as child support. They don’t disappear because they’ve gone on meth benders. And they don’t fall asleep on a box midshift because their pay from yesterday got converted into pills.
> And they can do their times tables. To manufacture, you need to be able to consistently and accurately multiply 7 times 9 and read in English, and a disturbingly large portion of the American workforce cannot do that.
like the fuck? where are your sources? this sounds like some ignorant shit to say
I'd guess the source is stuff he has personally witnessed, which means even if it's true (would somebody just go on the Internet and tell lies?) it says nothing about prevalence.
Ignoring this is like ignoring the prophecitc Vivek tweet that triggered conservatives for him pointing out DEI for white people.
This post is basically correct. The Chinese will accept being exploited way harder than we will! Good going communism!
This shit is why I will resist Marxist bullshit with all of my fiber forever. Fucking barracks communist no matter how hard they try to claim “nah we don’t support that”.
"incentivize, subsidize" - yes. There should be less incentives and tax breaks for "holding an asset" and more incentives for making things that improve human lives. Most of the laws are set by the incumbents who stand to lose what they have built and who have the money to pay the lawyers to set the tax code. Real estate should not get incentives unless its getting someone in a home. Private equity, same. Venture capital, after a certain point, same. If you are worth a bazillian dollars, same. A lawyer with balls needs to take on the tax code. I'm kind of hoping the whole Harvard escapade awakens a few legal idealists out there.
> There should be less incentives and tax breaks for "holding an asset" and more incentives for making things that improve human lives.
I think you're overlooking that, say, giving out a 10-year loan for a small business is exactly "holding an asset" (holding a bond issued by said small business for 10 years). For the benefit of everyone involved.
I think of environmental conflicts that disappears in the US thanks to manufacturing moving to China.
In the 1990s there were numerous manufacturing plants in the US (two on the South Hill of Ithaca alone) that were found to be contaminated with solvents like
People thought it was great stuff, you wouldn't believe how hard it is to get cutting grease off things after you turn them on a lathe and vapor de-greasing makes it go away just like that.
China has some of the most advanced agriculture on the planet including a "vertical farm" that can sell straw mushrooms for about $2 a pack where they are super-proud that humans only touch them with a forklift. (Contrast that to the labor-intensive mushroom farms of Pennsylvania where somebody cuts each one with a knife.)
We are pretty omnivorous (I think mealworms start with "meal") and my obsession with anime and Japan has turned into serious sinophilia but my wife and I are hesitant to eat "Chinese Food" grown in China because of widespread environment contamination, I mean they've been building up heavy metal stocks ever since Emperor Qin Shi Huang poisoned himself with mercury.
Yeah, it's underrated how the Chinese boom just did not care for environmental impact, and because political organizing is banned the public are limited in how much they can complain about it.
It used to be a thing that people were importing massive quantities of baby formula to China because they didn't trust locally manufactured stuff.
Yes, but they're culturally related. Anywhere where people write with Chinese characters or used to write with Chinese characters has legends about nine-tailed foxes, for instance. The intelligentsia had access to Chinese literature and this diffused into the public imagination. [1]
For me it started out with being willing to enjoy media in an unfamiliar language (first Japanese) that gradually became familiar. Then playing the Japanese game Dynasty Warriors that got me thinking about the Romance of the Three Kingdoms and about the characters and the place names and other old Chinese stories like Journey to the West and pretty soon I am enjoying Chinese pop culture about old stories and new stories of the fantastic and even learning some Chinese, getting curious about Chinese mobile games that aren't known at all in the west because Chinese people cosplay as characters from them, etc. (At the university where I work I overhear conversations in Chinese almost every day)
Yes, Japan is a different culture which I still enjoy and appreciate, but for me it was also a gateway to China. [2] I was an anime fan for 30 years but in the last 3 years I've had the same kind of giddy feelings for Chinese pop culture that I had about anime at the beginning and of course that means I'm going to buy a whole fish and eat it with my family because my son's Chinese friend suggests it.
Lately I've been playing the Japanese game Dynasty Warriors Origins which has both Chinese and English voices and find it strange on one hand to hear legendary Chinese heroes speaking Japanese which I mostly understand and then listen intently to the Chinese which to me is still a wall of unfamiliar syllables where I struggle to pick out proper names and an occasional word or phrase -- but I have a great time trying!
[2] ... and it goes the other way, China's pop culture is inspired by Japan (I think it's funny that many Chinese games like Azur Lane use Japanese voices in the west because they know the kind of person likely to play that kind of game knows phrases like suki da! and has an emotional feel for Japanese even if they aren't fluent in it)
This pretty much mirrors what a friend of mine said (he is a recently-retired Co-CEO of a medium-sized manufacturing business).
He's been telling me this, for years. It's not a secret. The information has been out there, for ages. I'm surprised that the administration didn't understand this.
> I'm surprised that the administration didn't understand this.
Why would you assume they don't understand? Every time they're questioned about the tariffs the narrative shifts. We have a trade deficit, we're getting ripped off, we want to bring back domestic manufacturing jobs, we'll automate them with robotics and AI, we're playing hardball to negotiate a better trade deal and get rid of fentanyl, it's a matter of national security, an economic emergency, the dollar is overvalued.
You cannot trust a word from them. If you want to understand why they're doing something you must look only at incentives and outcomes. My current analysis is that there's some internal conflict, but the overall push for tariffs comes from a desire to crash the economy and use the downturn to consolidate wealth and power.
I genuinely don't believe there's five-dimensional chess happening here.
The problem is simply that the US president is a repugnant, stupid, erratic egotist who's surrounded himself with nasty people of varying levels of intelligence, with stupid ideas about how to run the country, and this is the policy result.
A genuine question, presuming no correct answer: what is to be done about it? China is reportedly on track to run more than 50% of global manufacturing by 2030, if the World Bank is correct. What would you do to act against this? Is doing nothing acceptable?
Start by realising this is going to take decades to reverse.
Given the timescale any solution will require cooperation across political parties. You can’t start something that will get undone in four years.
Then accept it won’t make much difference to the inhabitants of bumfuck USA. Automation is what took their jobs.
Start at the top of the food chain and gradually work down. If America can make cars but not car tyres then implement gradually increasing tariffs on imported tyres. 1% this year, 2% next and so on. Pretty soon you have a car tyre industry again.
Know when to stop, just like it doesn’t make sense for a banker to clean their own house it doesn’t make sense for a rich country to be making tee shirts.
Of course this won’t happen because of the American political system.
I would act against China - because China is making political moves that I do not like. (they are supporting Russia in Ukraine, they are building up to invade Taiwan, they are supporting terror in the middle east...)
By acting against China that means I applaud moving manufacturing to Vietnam. I want to help Botswana grow - and I wish there were more countries in Africa I could name that seem to be on a good path (I cannot name the majority of countries in Africa, the ones I can are because they are in the news for bad things happening. I'm not even sure Botswana - I mostly know about them because last time I brought up Africa someone from there said their country was an exception).
Overall the world is better off with a lot of trade. Comparative advantage is real. There are things I can do that I don't want to become good at. However we also need to be aware that not everyone in the world is the friend of freedom and some must be cut off lest they grow. Nobody is perfect though, so you can't cut off everyone.
Yeah, there's no painless answer. China is not a democracy. They can force millions of people to endure terrible working conditions, pollution, corruption, and abuse, and take a very long view. The US can't do this.
Bloc building. Europe has countries which do lots of manufacturing. Use those to gradually reduce reliance on China by slowly restricting Chinese access to the Bloc market and build up supply chains inside the Bloc.
Making everything in the US can not be done without a very severe decline in living standards.
Under normal circumstances, when a country is running a massive surplus, their currency should appreciate, weakening their exports and thus recalibrating trade balance back to zero. That isn't happening right now, because China (and other surplus nations like Germany and Japan) relies on buying massive amounts of US treasuries to weaken the Yuan. That's one of the reasons why the US dollar is the reserve currency. It has to be, because only the US has an economy large enough to provide high-yield, low-risk treasuries and is willing to do so.
Trump's tariffs would theoretically rebalance trade on the long term, albeit in a highly destructive manner. But the more diplomatic solutions as proposed by other commentators like Catherine Tai, Yanis Varoufakis or Michael Pettis would be the introduction of capital controls to stem the demand for US treasuries, or better, the reintroduction of Keynes' proposal of the International Clearing Union back in 1945. The ICU's role would be to actively balance global trade surpluses via the international currency bancor, of which would have fixed control of FX rates rather than relying on FX markets to punish surplus nations and help deficit nations respectively. As for nations outside the Union, they would just get treated similar to the USSR.
I think they should want to do something - it's just that torpedoing your ties with your closest allies and trade partners then lighting the stock market on fire is maybe not that thing. China spent decades building up their supply chains, infrastructure and manufacturing capacity and had support for this at state level.
If the US sees it as a threat and wants to do something it should maybe look to what China has done. Because tbh what Trump did re Tariffs is pretty close to "nothing" all things considered.
They won't though because as soon as you have someone saying "look, let's just put together a staged plan so that in, say, five years we'll produce X% more electronics domestically..." you'll have a Republican shrieking about "five year plans" and how the USA is becoming communist
A great analyst once taught me the response question: "yes, and so what?" What's so magic about manufacturing as opposed to all the higher value work of the US economy? Have people not noticed that the average American is still richer than the average Chinese person by a long way, and (yes, painfully) more so than the average European?
If you're going to talk wars, then .. US military manufacturing is still the world leader yet again. Plus the nukes.
The thing is the US already experienced Trump 1.0, so it was presumably easy for many to assume that Trump 2.0 would follow broadly the same pattern and that there'd be an "adult in the room" somewhere to say "this will crash the world economy and do three consecutive 9/11s worth of damage to the stock market". So even though there are some very silly people in very high places saying some very wild things, the assumption for many is that there's someone there to manage the chaos and minimise the stupidity.
This has been a pretty sobering reminder to anyone that, in fact, there is no such thing.
My friend is watching his business get ready to die. His wife is still the CEO, and she's losing her shit. They're not alone. There's thousands and thousands of similar operations, all over the US, that will have to shut down, if something doesn't give.
I guess the mega-rich oligarchs think this is great, but they don't employ the majority of Americans.
Some did understand it I think (maybe not Trump), but were tired of hearing it couldn't be done and decided to try. A large % of Americans are happy at least someone is trying, and at the very least perhaps some lessons will be learned, and the parties will recalibrate their policy platforms to actually accomplish reshoring.
I work for a US startup manufacturing (as much as is feasible) in the US.
Because of the embarrassment that is meant to be our government, DoE hasn't paid for a contract completed in December (including physical goods), and DoD has silently stopped all of the R&D contracts we've been applying for.
We're about a week or three away from bankruptcy.
Our only foreign vendors are for PCBs and a particular type of motor. US PCB fabs are and have always been vastly more expensive and really don't do small scale runs at any sort of reasonable price. The motors? No one makes them domestically.
I'd gripe more, but this administration simply doesn't care about little guys like us. US small business are going to start dropping like flies soon.
A lot of Americans realize that it's going to be hard, which is why we should have made an example out of the first guy to profit off of sending manufacturing off to the shores of a geopolitical rival.
America suffers from a flattened income curve. There are many many more people earning $100k+ today than in 1960 (inflation adjusted). America has an envy problem first, equality problem second, spoiled child problem third.
The people in the areas where things used to be made certainly have more free time, but they don't have disposable income.
Unless we're just here to repeat canards from the 1990s given by financiers which explained why it was good to shut down the main employers for entire towns.
Still, this kind of outsourcing of manufacturing (or even more food production) puts the US in an incredibly uncomfortable position, especially that China is its main geopolitical enemy.
What if a war erupts? Suddenly the US cannot produce a lot of essential stuff - I think Covid was a good example of that happening.
Of course the question is can this be done and what will be the price if so.
I believe we should scale up manufacturing in the US for different reasons.
But I'm also a realist. If war erupts between China and the US, then anyone in the US or China still alive 4 weeks after the start of hostilities will have more pressing concerns than worrying about where things are manufactured. Again, just the reality.
We shouldn't plan on the basis of end of the world scenarios. Rather we should plan on the assumption that we want to confer maximum benefit on the US in likely non-apocalyptic future timelines.
The author is not anti-US-manufacturing. He explained how the current tariff policy undermines US manufacturers. He is pointing out the obstacles and what we must do to overcome them. The obstacle is the way.
I wouldn't say he is anti-manufacturing but more that he takes a defeatist view.
Two of his points: "Industrial supply chain is weak" and "We don't know how to make it" are exactly the same.
>all the factories which make the needed components are in Asia,
>because they know how to make the best semiconductors in the world.
But this is looking at the problem and then missing the point: If I decide to start mfg. IPhone in the US, I can't because there are no suppliers.
As long as nothing changes, there will continue to be no suppliers.
If I HAVE to mfg the IPhone in the US, at first I will import due to no supplier but someone will make a local supplier because they can undercut my importer.
Subsidize the essentials let the free market sort the rest. I think we still want competitive markets within our borders for the stuff we subsidize so we don't get stagnation of the industry. Maybe there are clues how it could be structured like we subsidize farming.
I think the main point stands, though, which is that you can't undo to the previous state. E.g., rolling back all tariffs/deportations/firings/budget cuts would not undo the damage done.
The state of the art is literally a half century beyond where american manufacturing was when it died. Anecdotally according to older family members who had those old manufacturing jobs, they were working at companies doing stuff like bending a steel rod at the end and then shipping it off to a sub contractor. This was not glamorous work. Most of them got into it because you don’t need to speak english to bend a pipe in a factory. And they did everything in their power to ensure the next generation would not have to work those sorts of jobs.
I think most people have a very confused understanding of money(currency) and value. Workers produce value, not money. Workers get a cut of that value, which is converted to money. To get by comfortably in the US, a first world developed economy, you need to be producing a lot of value. Everything is made to accommodate high value workers.
Producing t-shirts, window fans, or toilet brushes is not high value work. The slice of value available to convert to currency for the worker is very tiny. So you end up having to play games with the economy which inevitably will blow up in someone's face. $60 t-shirts so we can pretend that the value in a t-shirt is much more than it is, so we artificially make t-shirt manufacturing competitive with, say, automobile manufacturing.
I somewhat agree with your point, but it’s also important to include the other side of that pricing.
If it actually costs $60 (really more like $25 for made-in-America t-shirts I’ve bought) to make a t-shirt, with environmental regulations and human costs accounted for, then isn’t that the actual cost of a t-shirt? And they were artificially cheap at $10 for imported ones due to ignoring externalities? In that case, producing these simple products is actually a bit more valuable than you suggest.
You are missing something: quantity. A toilet brush itself is low value, but the US needs 30 million per year (this is a guess, but it seems reasonable enough - every person buys one every 10 years, which seems right based on how long they last. I am likely off, but probably not by an order of magnitude so let us use that number for discussion unless/until someone really wants to find a better number). If you can make/sell a million brushes per year with a gross profit of $1 on each that is a million dollars, if labor and the machines are amortize to $.50 each you net profit is then $500k/year - many small company CEOs would be happy with that.
You can run the numbers many different ways, but the important point is low value production is always about volume.
I disagree with this. Everybody wears clothes. Everybody eats food.
You can't put a monetary value on a t-shirt, because people will buy them anyways. Who is to say that t-shirts aren't $60? People only think that t-shirts are "low value" because we have offshored the labor and are used to very low prices. Meanwhile I bet most Americans can't even sew.
I am by no means an export on manufacturing, nor international trade, economics, or virtually anything relevant to manufacturing. Just a layman here.
Observationally I fear there is a lack of nuance in discussing "bringing back manufacturing" (really re-expanding) to the U.S.
I fear the lack of nuance is due to bias based on not liking the guy in the red tie or the other guy that's in a blue tie so there's just blinders about whether or not a particular policy will achieve a particular stated goal.
The next thing I see is it just lumping manufacturing all into one bucket.
Take manufacturing smartphones. Because the U.S. doesn't assemble iPhones the U.S. appears to be bad at manufacturing? No, I think it's just not good at assembling iPhones.
Just looking at numbers, sure the U.S. steel production is dwarfed by China but globally it's still a major producer. And there's no discussion of quality.
Look at oil & gas. I'm pretty sure the U.S. both produces the raw material and refined product at a significant amount globally.
Plastic manufacturing. I toured a bottle manufacturing plant last summer. It's primary a customer was Limited Brands (Victoria Secret)
It built molds. It upgraded factory equipment roughly every 8 years (increasing production & reducing labor costs). Why was it able to manufacturer bottles in the U.S. even it's selling at a higher price? Because it's primary customer was essentially down the street. That is, apparently the cost to not import across the globe more than offset the cost to manufacture here.
I understand that's just an example and I'm trusting the information from that company was reliable.
But first I think we need to be honest about how much manufacturing is here and what type. Then discuss which policies are likely to achieve goals we may have in mind.
I think there's merit to manufacturing semiconductors and batteries here. But we need to also be aware that while manufacturing may bring jobs, an increasing amount of labor will be automated.
Yes, there's little nuance. I see so many people saying it will be hard to bring back manufacturing jobs, or "we can't go back to the 50s," and then they just stop as if that settles the argument. The implication, which they never say out loud, is that we shouldn't even try, just accept things as they are. Just be the Big Consumer until someday the rest of the world doesn't want our dollars anymore, and then what?
Seems much better to look seriously at the manufacturing we still have (as you say, it's considerable), where we can expand on that, and where we're lacking and need to rebuild.
We also need to look at what manufacturing we want. That is why the military needs keep coming up - in case of war we are unlikely to be able to get things from China so we better have a different source (though the source need not be in the US - Canada should be just as good so long as we can keep Canada our friends - same with the EU).
Once the military needs are met, I don't care what we make, just that we need good jobs for people who are not able to handle more complex jobs.
>There are over a billion people in China making stuff.
There surely can't over a billion factory workers in a population of 1.4 billion. I looked up a population pyramid, and let's say 100% of the population aged 15-64 is employed at a factory job, that's ~70% of the population which is only 985 million people.
America does not have to bring manufacturing back. It has to devote resources to robotics and AI to replace workers to make products for itself and it's people.
The transition period is currently already underway due to the tariffs. An unintented consequences is that the big players in commerce(Nike, All Big brand names...) no longer have a monopoly due to China relaxing the regulation on it's factories to disclose for which brands they manufacture products.
Now that the everyday person knows that they can also buy products from the same factories at a fraction of what they used to pay. They will do that. So the middleman will slowly fade out unless they can compete with... Robotics and AI.
The other consequences of the shift in this consumption dynamic is that it behaves in a downward fashion on inflation. People's incomes did not increase but they can now purchase more with their incomes. Jackets that used to be advertised as 200/300/400 dollars now can be bought for $20/$30 directly from the middlemen in China and get shipped to the US since they are under the $800 dollar limit.
This is actually a win win for all US residents. Enjoy it while it lasts.
Isn't manufacturing mostly a red herring? Sure some select people who are currently in Washington might care about it from a geopolitical angle, but the electorate is not lamenting the lack of manufacturing jobs, but rather their decreased share of the proceeds of the no.1 national economy in the world. Even if you bring all manufacturing back, I doubt those same people will be happy working in those factories.
Beyond the obvious skilled labor there’s supply chain network, maintenance, townships and supporting system around them.
And all of this needs human labor which is taken from somewhere else. How do you incentivize them? Just throwing money at the problem won’t solve it either. Because more often than not it’ll attract charlatans who will promise the sky, take the money and move away.
Americans have a very 1980s idea of manufacturing (and China in general) in that there aren't actually that many humans being used in Chinese factories let alone the American ones some of them want to build here. There's even a concept of, "Dark Factories" in China which are 100% automated factories that operate in the dark. The only jobs that will come from bringing manufacturing back to the states will be in automation, robotics, AI, and roles to support those things.
Given the all the minimum wage staffing at most distribution centers these days despite all this off the shelf robotics technology seemingly available on order and already proven, makes me thing the american worker is cheaper than we might suspect compared to building out these dark amazon warehouses.
A business I work with has a factory in China that produces their devices. They absolutely do most of the assembly manually, as many of their sister factories do.
Robotics automation is a tradeoff to gain efficiency at the expense of flexibility, with a large upfront cost.
Well, even a better argument to bring those factories to the US. Why not develop the know-how on manufacturing and improve automation in the US rather have China lead there.
> It’s years of accumulated skill, but it’s also a culture that is oriented around hard work and education that the United States no longer has.
Sounds more like China has an exploited educated class/lack of oppurtunity than America has bad education.
Plenty of American workers can multiply in their heads and diligently perform there work. These people work in white collar jobs though, not in factories snapping together phone cases for 12 hours a day.
The author isn't totally wrong here, Americas bottom tier labor pool sucks, but they miss the bigger picture when comparing Chinese and American workers. China has skilled workers doing unskilled work. That's why they are so good. That's also why bringing manufacturing to the US will be so hard. Ain't nobody wanna get a degree so they can work a hot factory floor all day.
Westerners have had too good of a life and you cannot compete with an asian who is told every day if he doesn't perform he will be homeless. You just cannot compete.
For better or worse the man is exposing the mindboggling scale of deindustrialization that was hidden underneath America's transition to a "knowledge economy". Decades of failed economic policy has led America to this point.
Unfortunately, that ship sailed a long time ago. Why is no one in the administration paying any attention to the outsourcing of high skill knowledge work to India and elsewhere? Obviously I have a bias working in technology, but it seems to me to be a much more CURRENT issue and one that can actually be addressed in the present.
That job retraining is going to happen ANY DAY NOW I tell you, and then those textile workers are going to be so glad that they can be call center workers.
Those two are not in conflict. The claim is 20-25% of the population would be better off if they moved to a manufacturing job. The other 75-80% are better off where they are, but making the bottom better makes everyone better.
They're going to end up with some sort of corvee forced labour scheme enforced by ICE, the logical conclusion of "other people should go work in the factories".
The litigiousness point should have been at the top of the list. You can build roadways, but if you constantly have stories in the news of people striking it rich by suing someone, and half the billboards you see in your town is of people telling you they'll help you do it, then it's going to be extremely expensive to employ folks.
It'll be easier to teach folks hard work, it's very difficult to change a culture when 1. A huge sector of our legal system geared towards it 2. People can easily get rich off of it.
These are all good points, but I’ll add a different take here.
The points are correct but rather than bring “all manufacturing back”, the goal should be to aim for an 80:20 or 70:30. And it will still take decades, but at least with a far better chance of success.
For companies that rely on a global supply chain, manufacturing and even raw materials should aim for mostly global but a guaranteed 20 to 30% local.
It’s one way to offset a real market problem, where
unchecked market forces drives all production offshore or “nearshore; leaving the nation vulnerable to supply chain disruptions.
For essentials like grains, I’d even argue that the nation should opt for an 70:30. It’d be insane for us to offshore the majority of production.
I don't think anyone underestimates that, as much as some people with the author's viewpoints would like it to be true.
To paraphrase Kennedy: "We choose to [bring back manufacturing]. We choose to [bring back manufacturing] in this [or the next] decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too."
We will do it, and we will win, whatever that means.
What in the modern situation suggests the comparable level of diligence in approach to the goal? The fact that both goals are far-reaching does not suggest comparability of approaches to the solution.
Changing the way society/economy operates is nowhere near "building X," whatever X is, whether it's something hard like a bomb or a collider.
> We will do it, and we will win, whatever that means.
How do you know that you haven't won already? Shouldn't the end goal be clear? In the case of Kennedy you're referring to, criteria and motivation were clear.
--
To a non-US bystander, your comment sounds like a no-thinking patriotic slogan. The details of the article are such that you can take any argument and bring it into discussion in order to show its irrelevance. But we're discussing slogans irrelevant to the situation and belief in the win, even though the win is not defined.
Putting aside the rah-rah patriotism, you perhaps don't understand the problem any better than Trump does. The moon mission to which you allude was difficult but, critically, that difficulty was not felt by most Americans: it was a challenge for NASA engineers. Trump's current economic plan will increase inflation, cripple America's role in world trade, and result in negligible increase in manufacturing in the short term. Wildly unpopular policies do not last in a democracy.
It's easy to bring manufacturing back, just give it a decade or two, but impossible to make it internationally competitive without large-scale market regulation such as tariffs or handing out government subsidies.
This view is too trivial. You could also stimulate manufacturing by promising tariffs increasing over the next X years, while not taxing the imported building materials and machines for longer. Or you could use tariffs to both break trade and make the environment too expensive and uncertain to invest in large construction - and delay the process by a few extra years.
I don't see how this is a reply to my point. Building up manufacturing takes a decade or longer (putting the problem aside that there aren't going to be enough workers). Tariffs are heavy market regulation. Even if manufacturing was brought back successfully, the production costs would be too high without such heavy market regulation.
You seem to assume that once manufacturing has been brought back it would somehow be internationally competitive. I don't see how that's possible.
My problem with large-scale market regulation is that it also increases the price of inputs for companies who would otherwise be interested in building a factory in the US. Do you have a solution for that?
Inputs are cheaper (and thus have lower tariffs in an absolute sense) than outputs. I think the author underestimates the ability of the market to adapt to incentives.
They're still correct though that there are plenty of good reasons why we don't do manufacturing in the US right now, and tariffs do absolutely nothing to change that reality, they just artificially make the alternative worse at significant expense to consumers.
I feel misunderstood. I'm definitely not advocating for tariffs. The point is that even if this strategy worked for bringing manufacturing back (it won't in general and widespread because of labor shortage), it would result in products that are not going to be internationally competitive.
I prefer the alternative explain: this is just trump bringing in a national sales tax without having to go through the senate or eat the unpopularity.
There seems to be no actual plan to actually bring back manufacturing (this would require different tariffs, loans, tax accounting rules, etc). And there seems to be no targeting of china (everywhere is being tariffed, allies and enemies, strategic suppliers and places with no trade with the USA etc)
Like OP, I work in manufacturing (after 15 years in startup land). I'm not as experienced as him, but I work in manufacturing that makes similar products on both sides of the US/Mexico border.
Let me add some thoughts:
1) Capacity, not cost, is the main driver for nearshoring. All things being equal, a manufacturer would rather produce a product in the US than overseas. The cost of modern products is mostly parts & material, not labor. When you add logistcs expenses, the theoretical cost advantage of overseas vs local is not that great. Remember:the people on the other side of the border are capitalists too! They want to keep most of the surplus of nearshoring to themselves! The problem is that there simply is no capacity, both in facilities and especially in people.
2) What matters even more than capacity is the first derivative of capacity. In other words: how quickly can I spin up a new factory if I win a big deal? How quickly can I spin one down if the client goes away? How long will it take me to get a permit to connect my new factory to the highway? In the US, these costs and timelines are massive. Real estate, permitting, hiring. There is an order of magnitude difference here, in cost and time.
3) The labor problems are real. I don't want to disparage the american workers I work with, because they are amazing. Truly fantastic craftsmen. But they are hard to find. You'd be surprised how many people show up who can't read or can't read a tape measure. How hard it is to find people that want to work 8 hours a day, 5 days a week. By contrast, in our overseas facility we have qualified workers literally showing up at our gate every day asking for work.
In other words, the root cause problems with american manufacturing are—-surprise surprise!--the same problems as with other parts of the US that are in decay:
- Disfunctional local government, especially around permitting, construction, housing and transit
- Disfunctional education & healthcare systems.
- A lack of strategic investment in infrastructure (rail, highways)
- A social safety net that is totally out of whack, with a high cost burden for employers & employees, with little to no immediate quality-of-life benefits for the working population
The cost of manufacturing your stuff is not labor dependent only because you are probably putting together low cost components made with cheap labor. What if you had to make the spring or the resistor or the little painted metal box? Could you do that without labor being the big cost?
What? How much labor do you think goes into making a spring or a resistor? These are parts which cost fractions of a cent and are cranked out by the tens of millions.
Building up manufacturing has always been a period of pain for the population. There is so much to learn and so much hard work to do with, at least initially, so little gain.
Competition is extremely high initially, products will be ridiculed for being expensive and low quality. Companies will fail and go bankrupt, workers will suffer from that.
"Bringing manufacturing back" is a path of pain, not a way to fast economic success. There is no way to change that, tariffs will certainly not change it. Are Americans ready to leave their office job and work overtime in factories and engineering departments? No, automation will not do this for you, you are competing with a country which knows far more about automation than you do. To compete with them you need to be better and cheaper.
Lastly look how Germany struggles, right now. Their industry is in large parts starting to loose any competitive edge and will continue to do, unless very significant cuts are made somewhere. You can not keep the same living standards while someone is doing twice your work for half your costs.
To build assembly lines, one has to first make custom tools, jigs, and parts and apply processes to them that cannot just be 3D printed in plastic or metal or FDM'ed.
The main show-stopper to them is the lack of working knowledge about precision tooling manufacturing.
For example, some of the best power machine tools in the world came from Germany and from Bridgeport, CT between 1910 and 1965. There are/were moderately large, 1 micron runout milling machines such as Moore No. 2 and No. 3. These things generally aren't made anymore and not many people know the tricks and processes to make similar or equivalent machines that make other tools and machines. Like that the unshielded body heat of an operator can swing the runout of a precision machine in an otherwise climate-controlled environment.
Could anyone clarify what the author means regarding duty drawback? He writes:
"There is no duty drawback for exporting. In the past, even in the United States, if you imported something and then exported it, the tariff you paid on the import would be refunded to you. They got rid of that..."
My understanding was that duty drawback—where import duties are refunded if the imported items or their components are later exported—is still broadly available in the U.S., though with certain exceptions (like steel/aluminum tariffs under Section 232 or trade within USMCA countries).
Is he referring specifically to recent tariff changes or targeted exceptions rather than a general elimination? Or has there been a broader policy shift I'm missing?
Made in China is the result of meticulous division of labor across various industries in Chinese society, gradually built up over 30-40 years. If Americans decided to abandon their current lifestyle and start building from scratch, perhaps they could. But who would give it up?
I'd say 60 years. As you implied one can't just dismiss the heartbreaking necessity of the CuRev
Even after considering the alternate pathway called ROC[tm]-- after all you may argue Morris Chang et al gave up lifestyles-- & I hear Rationalistic Daoism is having a resurgence on the mainland (vs Confucianism)--
Because (sadly) it's all still about morale & spiritual
The only sane way to bring back manufacturing is investments like the chips act.
Think about it this way, you are a widget manufacturer trying to place a new factory. You could put it in say Canada and enjoy cheap imports and exports of your product globally. It's cheap to produce and easy to sell.
Or you could place it in the US, but now you are looking at a minimum 10% tax on importing the resources you need. On top of that, a significant portion of the world (especially the richest nations) are tacking on an addition 10% or more tax on your product because it came from the US.
Would you build a factory in the US? Maybe if you can source everything in the US and you are fine with your primary market being only the US. Otherwise, it's a bad business move.
When talking about something like semiconductors, global access is really important to be profitable. Low or no tariffs and the proximity to China and other raw resources powerhouses is a major reason why so much of the semiconductor industry is in Asia.
It is really that hard. Look what happened in Arizona. TSCM brought the most complex semiconductor chip making supply chains to the US on a vacant piece of land in NW Phoenix in about 4 years. And it wasn't just TSMC that invested in the Arizona site, but also companies like Linde ($600M), APS ($100M), Sunlit Chemical ($100M), Air Liquide ($60M), and Chang Chun ($300M).
Maybe others can comment, but are semiconductor chips the most complex thing to manufacture in the world? Not sure but the Arizona TSMC supply chain proves it can be done.
> And if we want to apply tariffs, do it slowly. Instead of saying that products will be tariffed at 100% tomorrow, say they’ll be 25% next year, 50% after that, 75% after that, and 100% in year four. And then make it a law instead of a presidential decree
This is the big difference between a tariff regime that is credible in such a way that the business community can plan investment around it, and the current one that has mostly just caused chaos and confusion.
There are plenty of people saying these tariffs will not work.
But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.
How we get that level of prosperity back? That's the people really want. Tariffs are simply a means to that end.
I wish people would stop writing articles about 100% criticizing tariffs and instead write articles 50% about criticizing tariffs and 50% brainstorming alternative solutions to achieve the same objective.
> There are plenty of people saying these tariffs will not work.
Work to do what?
> But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.
Why do you think this has anything to do with tariffs or manufacturing?
> How do we get that level of prosperity back?
Better pay for the jobs people actually work. Reducing inequality by preventing the richest 0.1% from capturing all the massive gains in wealth the US has seen over the past few decades. Removing regulations that prevent the country from building housing and therefore driving up housing costs. Switching to a healthcare model in nearly any of the comparable developed countries almost all of which deliver better healthcare at half the cost. Not expecting everyone to be able to live a completely unsustainable suburban life. Having the government support children's upbringing by paying for high quality education, instituting rules and regulations that require mandatory paid maternity/paternity leave, etc.
Lost of poorer countries manage to do this and more just fine. The US is far richer than most of those countries.
Very little of this has to do with manufacturing jobs falling from 18mm to 13mm.
Bring back manufacturing, and make the US economy work better for workers.
> Why do you think this has anything to do with tariffs or manufacturing?
Because usually the best-paying jobs were in factories, especially if you didn't have a college degree. A lot of towns in the Rust Belt were economically dependent on a local factory -- think cars or steelmaking. Often, part of the reason these factories were so high paying is because the jobs were unionized.
Companies moved overseas to save money on that expensive labor.
Now, companies have all the negotiation leverage. "If you unionize / demand higher pay, we'll move operations overseas" is a real and credible threat, as countless companies have already done it.
Tariffs are supposed to make operating overseas more expensive. Undo the economic justification for moving the jobs overseas and they will come back.
This takes away the companies' negotiation leverage. The "If you unionize / demand higher pay, we'll move operations overseas" threat isn't credible if everyone knows overseas manufacturing is super expensive due to tariffs.
I grew up in the Rust Belt and I'm old enough to properly remember when some of those factories were still operating. I saw with my own eyes what used to be a respectable blue-collar community decay into an economic wasteland. The drugs are getting bad. A lot of people have lost hope. Young ambitious folks see no reason to stay here.
The problem and its underlying factors are so obvious to me that I'm constantly amazed to see well-informed, intelligent people who don't seem to understand it.
We don't. We need only take a look at Detroit, holdout of American manufacturing. They have been automating and robotizing everything they can. ["... However, the Federal Reserve Bank of St. Louis notes that motor vehicle manufacturing employment declined 17% from 1994 to 2018, while motor vehicle productivity increased by about 13% over the same period..."] If manufacturing does come back to the US, it won't create very many jobs. Mostly just the people to maintain and fix the machinery.
Given the improvements in cameras and computer vision and AI and robotics, there is no reason to think this won't accelerate. A long long time ago, labor was cheap and resources were expensive. Today, the opposite is true. Keynes predicted in the 50s that we would be working 15 hour work weeks. The reason he was "wrong" was that he underestimated our insatiable human greed. We all want more. Average house size in the 50s was < 1200 sq ft. Today it is 2400+. Each kid must have their own room that is 12x12!! (I grew up with 4 boys in a 10x10, lol). Each kid must get a new $200 bat each year for little league, etc. We want a higher standard of living for ourselves and our kids. This is understandable but we forget our role in the never ending chase.
It’s so simple it hurts.
Stop the ruling class hoarding all the wealth.
Top tax bracket used to be 94%.
Have a VERY steep wealth tax, an inheritance tax and whatever else is needed. The fact individuals exist with many hundreds of millions of dollars while so many in the same society are struggling so bad is a disgrace.
1. win a world war that destroys the economy of every other country in the world for a decade.
2. destroy about the past 50 years of technology and all knowledge of how manufacture it.
3. Kill 90% of people over retirement age to lower demand for housing, healthcare costs, and retirement benefits.
In the modern world with modern technology there's a lot less productive work out there for people without specialized education. We could do a better job of training more people for trades jobs (e.g. plumbers, electricians etc), and removing college requirements from some professions (e.g. med school and law school could probably be college level education rather than post college) but anyone saying that we're going back is just lying.
> But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.
> How do we get that level of prosperity back?
The issue is that this is a false premise. The house sucked. Only 1/3rd of American families had a single car at the time, and the cars sucked. We can go on and on about everything else. Not to mention the social environment at the time sucked.
That doesn't mean we shouldn't try to do something about the issues Americans face. But tariffs with a shifting set of sanewashed justifications are just Not It.
Why will a factory job will pay enough for one person to raise a family and buy a house on a single income?
Like what is unique about factory work that allows for this? I’ve heard stuff like this so much and I just do not believe it. Is anyone working in a factory in the USA today able to buy a home and have a stay at home spouse on a single income?
When I was studying economics, my macro professor used to belabor the point that post-WW2 US socioeconomics was a highly unique (and special) time-and-place; and, it is a mistake to generalize economic theory from that time-and-place.
So... here goes: rather than proclaiming a "housing crisis", maybe we're seeing the end of an exceptional period of "housing affordability". (A similar analysis of Europe and Asia applies, piecemeal.)
As such, if we want to re-enter into a new period of housing affordability, we need to ask ourselves what we plan to give up and/or trade for that?
For WW2, it was millions of lives and worldwide devastation. It seems like we'd need a complete re-evaluation of the way wealth, family structures, and social safety nets work in order to vastly expand housing. (In the US.)
Maybe if we stopped viewing housing as an investment vehicle, with the expectation that house prices are going to rise forever then you would see affordable housing.
I think it's a complicated equation and there may be room for some strategic tariffs, de-regulation, anti-dumping, competing more on manufacturing etc. But the time you're talking about? Almost the entire world's industrial capacity was decimated other than the US.
You are competing with your fellow citizens for those things. This was true even back then.
Right now, today, it has never been easier to make a lot of money working. So you need to compete with people in that environment. You need to be able to outbid those people for that beautiful home you want. In an environment of lots of educated and skilled workers getting skilled salaries for doing vary valuable work. That's where the bar is.
We can lower the bar back to blue-collar-high-school-diploma, but then we need to also sacrifice all those high earning college degree jobs.
> How we get that level of prosperity back? That's the people really want.
And something they're not going to get. Manufacturing is going to be heavily automated. The money is going to continue to funnel into a small portion of the population.
People literally do just that today in the midwest. The coastal housing imbalance is just that a housing imbalance and not reflective of a lack of buying power today. Also consider that americans back then outside of the car and home had no other large purchases. No computer, no $1k phone on a $1k/yr plan, no big tv. People weren’t even eating out or flying back then when they could afford a family vacation.
> americans back then outside of the car and home had no other large purchases. No computer, no $1k phone on a $1k/yr plan, no big tv. People weren’t even eating out or flying back then when they could afford a family vacation.
Back then cars and homes and essentials were relatively cheap and TVs and flying were expensive.
Today it's flipped.
TVs are cheap,
phones are cheap.
Essentials,
like housing,
are expensive.
America is not a country, it's a continent. I know, Canada will be a province, and soon Panama of course, but in the meanwhile, it's a continent, not a country.
It really is starting to bother me when people attribute a deceptive narrative crafted by one individual to "American thinking" as if there was even a lone individual in this country who was earnestly believing a global trade war would solve a non existent trade problem before the narrative became convenient to our dictator
> It may seem trivial to make that glass that separates your finger from the electronic engineering that powers your ability to access the internet, but it’s difficult.
Out of all examples one could pick, this is the worst, as Corning Gorilla glass is actually made in the USA (Kentucky), and used by all other manufacturers.
He wasn't that bad at baseball compared to a random person or a minor league player.
He was that bad at baseball compared how good he was a basketball.
The article seemed correct IMHO,
> What happened when he switched from basketball to baseball? He went from being an MVP champion to being a middling player in the minor leagues. 2 years later, he was back to playing basketball.
This is an interesting read though I’m not an economist but even pick up that the author is wrong about some of these points. Still, I don’t think the author is an economist either. And a little harsh on US workers - but I know there are people really struggling in the US who need work and bring their problems with them.
I agree with just about everything in the blog post, except, the underlying Michael Jordan baseball analogy example. Does the analogy hold if we swap Michael Jordan for let's say... Bo Jackson? He really was very good at a number of sports before his hip injury.
meta observation; It is amusing to me that the comments on this site are majority "No, we are not smart enough to run a drill press. That takes years of training!" but back in 2020, every commenter was pretending they were doctors.
"America Underestimates the Difficulty of Bringing Manufacturing Back"
"America" doesn't underestimate or overestimate things. People do. So which American people underestimate the difficulty of bringing manufacturing back? Name names, or it didn't happen.
Even if you guys did rebuild e.g. textile factories down there in crazy land you're not going to pay workers $300/month to be able to compete globally. Nobody wants to pay $1,000 for a pair of underwear.
Tariffs don't help you compete globally -- they're about disadvantaging the global in favor of the local.
Someone may be able to pay workers $300/month and make them work the "996 working hour system"[1], but if they then have to mark up the end product by 100%, the disparity between local and global price to consumers narrows.
This is a case of taking away existing artificial barriers and let what people do their thing in the market. 5 and 10 year plans are only for economies run into the ground by an elite intelligentsia.
It is just a point of pragmatism.
Countries that wish to bring manufacturing back to their country just have to use people to do that just like they used people to put the production outside.
Which by the way will produce lot of business :)
The most fundamental problem in the U.S. is this: Infinite Growth Capitalism
The VAST majority of what is wrong with our society (political and obviously economic) can be traced to this. It's the expectation that every economic endeavor must show a return on investment - forever. That every entity must strive to optimize the bottom line every day of its existence. Optimizing for growth above all else crushes and consumes everything.
Increasing local manufacturing will only create more opportunities for people to be indentured to a company that literally hates their existence.
A company is forced to build here in the U.S. and people are supposed to rejoice they now have another option for their lives to simply be tolerated and disposable?
There is no technological path to AGI, much less intelligent robots, in the next 10 years. Everyone underestimates the massive amount of parallel processing going on in a single human brain. That doesn't even consider how massive the sensor array is. The doublings required for our artificial technology to catch up is about 25-35 years, maybe more depending on how much Moore's Law slows down.
Our economy was designed to NOT have citizens work at factories. We pay thousands of dollars a year in our public schools to teach each of our citizens calculus, literature, world history, and physics, so that they DON'T have to work at a factory, or perform manual labor like picking strawberries or driving trucks or cleaning toilets.
Why would anyone want to go back to an economy that can be run by a third worlders? What is our competitive advantage then?
Economics works when the people do the things they are most efficient at. If a person in China can make iPhones for cheaper than an American, LET THEM. Our citizens should be designing them instead, because that's what we train our citizens to do.
Trump and the Republicans really do think of our citizens as third worlders performing manual labor like we were oxen.
Americans fantasize about factory work because, at that time in America, you could afford a home without a two-income family. Life was "easier" for many people.
Personally, I think we need to focus on making things like homes more affordable. This would go a long way toward alleviating people's feeling of being trapped.
It's definitely less of a factor compared to money, but I can't help wonder if in addition to being able to afford stuff, it's the idea that there used to be a "default" path that carried some sort of dignity. Dirty jobs have never been outright glamorous, but there's still a kind of respect that American society confers upon "traditional" industrial work - think the classic image of the humble American coal miner, factory worker, or farmer. "It ain't much, but it's honest work." I think the thought is that however you did in school and in the upper-class-employment rat race, anyone could find a stable, respectable, long-term job - probably even get trained on the job - in an industry that really matters, that does useful stuff for the country.
Now? If you fail to jump through all the office-job hoops of picking a fancy field, getting a degree, finding internships, dressing up nice, keeping a clean record, acing job interviews, etc. Or if those fancy jobs just aren't hiring near you. What are the "default" job options most people are left with? Working retail at Walmart? Putting fries in the bag at McDonalds? Janitorial? Driving a truck? Doordashing burritos?
Obviously the main thing the lack of stability and decent pay in these jobs, but when it comes to public perception and fantasizing, like you said, I wonder if a part of it is just that these service sector jobs feel... shittier. Less important for society.
Because you cannot hide the imbalance of disconnecting yourself from the material reality that's involved with making your lifestyle possible by outsourcing to other human beings, over multiple decades, without it coming back to bite you in one form or another.
See the hundreds of thousands of people in US that have died from opioid overdoses. 50% of the US population, specifically those living outside major metro areas, experienced a slow collapse (over decades) that was not unlike the fall of the Soviet Union.
A country should have _some_ semblance of what it is to truly source, manufacture, and produce the lifestyle that's made possible in the country. When the top 15-20% become completely disconnected from the other 80% working menial service jobs because the core manufacturing has been outsourced to outside the country, it will come back to bite you.
"Man must feel the sweat on his own brow" or at least have an appreciation for what makes this possible. Your comment essentially implies that you feel that you are above or should be disconnected from this reality, which is dangerous.
You didn't explain exactly why we need that physical connection. You just broadly complained. Every one of your statements could be refuted by globalists saying its perfectly fine for foreigners to perform our manual labor for us instead.
I think its more complicated than this. People don't want to work in factories per se, but what a world where labor has actual power. The big thing that offshoring did was strip the power of local labor to enforce certain reasonable conditions on employers and this allowed normal people to live stable, even comfortable lives.
Offshoring has produced a world where we can buy cheap trinkets but where many, many, americans live precariously, have little to no stability, and work more than one job to make ends meet. What Americans really want is more control over their lives and "bringing back manufacturing" is a sort of short-hand for that ideal.
I think bringing back some manufacturing may help, but in the end Americans need to learn that what they really want is more power to shape their lives and that they will need to wrest that power back from a system which has leaned ever more towards market control of the allocation of time, energy, and labor.
But how many citizens know calculus, literature and physics? Certainly not enough know history - or US democracy wouldn't be facing the threat it does now.
The poorly educated need a livelihood too. If the economy is healthier for global trade (I think it is), then some way must be found of destributing its benefits to the demographics who got hit. Otherwise you get revolution or populism.
Telling an unemployed factory worker to send their kids to college doesn't help. Doesn't help the factory worker, and doesn't help kids who see education and middle class jobs as about as unreal as the idea of becoming a famous influencer or kingpin drug dealer.
There's a lot more to our education than that. Additionally, our REAL competitive advantage are our universities. We have the best universities in the world, by far, and that's what drives our economy over all others as we create the most valuable intellectual property.
At its root I think this is driven by anxiety over how America would perform in a hot war, rose colored glasses culturally regarding the post WW2 era, and acknowledging that there's no real economic growth opportunity in America for unskilled labor, it's merely a way to tread water now.
going to have to give you kudos and steal that last part of "unskilled factory labour being a way to just tread water"
i didn't understand it myself until I developed a hardware system and computed the margins, hassle, etc - manual labor/assembly/mfg is not what a developed economy relies on and its asinine to pretend it is.
I don't know how the current American dynamism movement has picked up the steam it has
The problem with an exclusively intellectual economy is that it easily loses touch with reality entirely. You end up with generations of people who have no idea how anything works or how to actually make anything or do things in the real world.
Why does it cost us 10X more to build half as much? It's not all wage differences. It's that we don't have a large talent pool of builders. When you make things -- physical things in the real world -- you learn things about the nature of reality that cannot be learned from books or computers.
this is what i've been saying - critical manufacturing should of course be brought on shore but I don't understand the idea of bringing back "the assembly of hyper niche part that country Y can produce extremely cheaply but America can't even reasonably produce in quality" to American shores.
It literally harms industry because anyone relying on that hyper niche part now has to pay more (because American mfg, let's face it - is not efficient) and deal with subpar quality as opposed to higher quality foreign parts.
I hate it say it, but come on man - people aren't buying American cars globally because the Japanese and even Germans can do it better. That's free market economics, either get better at making cars or focus on making things that we can do better like iPhones and Macbooks - not try to artificially defend an industry we suck at by forcing people to deal with shittier subpar products.
Everyone wants to think they're the most valuable thing in the world, but economics doesn't care about how much people value themselves. It only cares about when both buyer and seller agrees to the value of their work.
You may think a farm worker deserves $500,000,000 a year, but that won't matter until someone else decides to pay them that.
Ultimately, it's OK to say some things are more valuable than others, including the value of your labor.
What we have instead is a nation straddled with debt and useless degrees. While the counties like China do “theirs world” work produce smarter and more capable workforce all while doing the mundane work too.
I think your view also vastly underestimates the number of not so smart people that exist in America. This is no knock on them, but people in tech bubbles get to walk around in a society where the average person they interact with has a far above average IQ. So for those who don’t balance red/black trees and find shortest paths with dijkstra's algorithm need jobs too.
On top of that you forgot something I am sure you have yelled many times, diversity. Remember when it was a strength? It’s not good for any nation to be completely void of entire industries. Having factories next to the tech will germinate the thinking minds with new problems to solve.
But even more to the point. China is doing amazing things, and they were we let do the manufacturing. So we always have a strong evidence that letting others might not be the best idea.
False dichotomy. An alternate position is to do it in a measured, planned way, not under duress as the economy tanks and international relations are soured.
I don't think it's realistic to bring manufacturing back, so to speak. Are the words being taken literally here? Does this truly mean Orange Man wants to bring all manufacturing back to the United States, or do we want to weaken our largest competitor and buy those cheap products in other countries who are less of a threat, speaking in terms of their technological advancement and economical trajectory?
China has been moving cheap product production to SEA for awhile now, what the USA wants is countries like Vietnam to make cheap products without Chinese involvement in the manufacturing tech and supply chains…which is pretty much impossible.
> China has been moving cheap product production to SEA for awhile now, what the USA wants is countries like Vietnam to make cheap products without Chinese involvement in the manufacturing tech and supply chains…which is pretty much impossible.
Not too long ago it was "common knowledge" that the Chinese couldn't do advanced stuff, now it's "common knowledge" you can't do advanced stuff without the Chinese.
Nothing is impossible (at least in this area). If someone says it's impossible, they're really saying "I don't wanna do it."
And for those who want a video, watch Scott Galloway on Anderson Cooper https://youtu.be/qg3JOR44r6M?si=Ggwfuuy-_lXjFUxq. Galloway notes that the US is only second to China in manufacturing and the Cato survey that found 80% of Americans want more manufacturing but 1-in-4 or 1-in-5 have any interest in going to work in manufacturing. And he quotes Dave Chappelle, "we want to wear Nikes, not make Nikes." (https://youtu.be/LAg1bDvuarc?si=-aLApcSdAk75d7Vr)
Back to the article, I'm no expert on tariffs, but explaining things to people and trying to understand where they "are" (I'm a social worker, so this is SW-speak) are two things I've spent my policy career doing. If I hear one more quilter (I make and sell one-of-a-kind quilts) say that the solution to the high price of quilting fabric (because of tariffs) is returning manufacturing to the US and Trump is our savior for recognizing this, well, I don't know what I'm going to do other than share the link to this blog.
Let me make a national security argument: China will move against Taiwan. Chinese ambitions do not stop there. They want Japan, South Korea, the Philippines, and many more nations as their new territories.
We saw international trade cut off in WW1 and again in WW2. It will happen again, and soon.
We are better off with an incremental step-down in trade from tariffs than a sudden cut-off. That is what Donald Trump's tariffs are doing.
Building a new factory needs a few years from idea to start of planning to production. 2 years if you are really really quick maybe, 4 to 6 years might be more realistic. The term for the current administration ends in 3.5 years and the next one probably won't be lead by Trump, so things will change.
This means that nobody will even start moving production back yet, they will pay lip-service, do the minimum to get along for this term, and hope for the best for the next one.
Politicians have been running on platforms of about undoing the damage of offshoring since Obama's first term at least, now here we are in 2025 and someone just won an election and it played a key role so clearly it's a big important thing and it's reasonable to expect it to stick around as an issue on the official party platforms. There is a non-negligible chance that in 2029 there will be someone in the white house who continues to push in that direction, even if the specific policy is very different from the current tariff policy.
The wise thing to do is to at least make steps in the direction of on-shoring or at least make your plans and investments compatible with it.
The tldr of that post is:
- To be really good at making robots, you need to iterate fast
- To iterate fast, you need all component manufacturers nearby (or you’ll be wasting weeks shipping parts from somewhere else)
- To be really competitive at manufacturing, you need to be good at robotics.
- If you’re missing all of these pieces, it will be hard to catch up with (say) China, which has been exponentially growing in every possible aspect of manufacturing for decades. Not only do we not have strong manufacturing, but we don’t have strong robotics companies, don’t have many of our own robotics components companies, and don’t even have much in terms of raw materials. Whereas China has been investing heavily in every single one of these areas.
Bringing manufacturing back means investing in all aspects of the supply chains which lead to technical innovation in manufacturing, which is really hard to do when the supply chain is set up to pull from our current competitor.
A personal anecdote from someone close to me.
A food plant in Canada (so not heavy/high tech manufacturing), was importing raw materials from US, processing it and exporting it to US.
After Trump tariffs, they bought some small plant in the middle of nowhere USA. Moving most of the equipment to that US plant, increased the salaries of Americans that worked there before (very low salaries compared to Canada).
So yes, it's unskilled labour but an example of production moving quickly back to US.
This article seems to be full of propaganda and downright lies. For instance, there are plenty of tool and die makers left in the USA, plenty of injection molding machines. I have personally seen them and met the tool and die makers as well as the machines making the molds.
It's difficult to address the giant article full of misrepresentations point by point. It's tough to see it up at the top of HN. Wish that I could do something to correct the misinformation that is being disseminated.
This person has a vested interest. They manufacture cheap crap in China (or Vietnam, I don't care) for American kids to suck on. What more do you need to know?
If you feel there are misrepresentations, then just pick one point and discuss that. I've worked in manufacturing-dependent companies and industries, and lived in China for years. His observations don't feel entirely off-base to me and fit much of what I've observed. So if there is something wrong here, help us clarify one part of it.
"To make Brain Flakes, you melt plastic and force it into shaped metal molds. Were we to import the machines and molds needed to do this, it would work for a little while, but as soon as one of those molds broke, we’d be in trouble, because there are almost no moldmakers left in the United States. The people who knew how to build and repair molds have either passed away or are long retired. In the event of a problem, we’d have to order a new mold from China or send ours back, shutting down production for months."
This is what I have the most problem with. As I said above:
"For instance, there are plenty of tool and die makers left in the USA, plenty of injection molding machines. I have personally seen them and met the tool and die makers as well as the machines making the molds.".
The reality is that there are many injection molding machines in the USA making weapons, medical devices, electronics enclosures and connectors, car and airplane parts, and other high margin products, not kids toys. And it's a lie to say that tooling, molds, and tool and die makers and shops aren't widely available in the States. They just don't want to pay more for them, and are therefore disseminating propaganda to the contrary.
And, I have also spent time in China, I have toured the factories there, I know what I am talking about as well.
Nonsense. Bringing manufacturing back to the US will be easy. Economists will probably call it "Miracle on the hudson river".
Economists are full of bs. They keep framing everything as impossible and when something good happens later, going against all their predictions, they call it a miracle... Maybe these economists are just projecting by assuming everyone else is just as incompetent as they are.
Of course if society was made up only of economists, we'd still be living in caves, worrying about the difficulty of bringing firewood back to the cave.
if manufacturing were brought back, the skies would be filled with coal soot. better that the u.s innovates in other ways, but the u.s seems to largely reject renewable energy to power those plants.
Regardless of what is believed about how well implemented or necessary these reforms are I believe there is an ironclad law of reality that real wealth can only be expressed in terms of material things - houses, phones, computers.
The era of making up tall tales about the supposed value of money via all sorts of futures and stocks and financial instruments the feeble mind can scarely understand cannot be over soon enough.
The value of money manifests when its exchange for physical goods.
If the Communist fairy waved her magic wand about and distributedall the wealth of the rich to every american equally, half of the people would decide to buy a new car with their newfound wealth next day, only to find out the supply of cars hasn't increased.
There'd be like 10% more cars sold, with people bidding over each other to actually get access to that supply, which would trigger massive inflation in practical terms, revealing the emperor had no clothes all along.
America is the wealthiest nation in the world. You just need more equality! Not MORE wealth! Where is that supposed wealth going to go to? Look where it has gone!
There are some interesting things in this but there are also some deeply cynical anti-working class stereotypes:
>You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
>Chinese workers much less likely to physically attack each other and their manager. They don’t take 30 minute bathroom breaks on company time. They don’t often quit because their out-of-state mother of their children discovered their new job and now receives 60% of their wages as child support. They don’t disappear because they’ve gone on meth benders. And they don’t fall asleep on a box midshift because their pay from yesterday got converted into pills.
>Sadly, what I describe above are not theoretical situations. These are things that I have experienced or seen with my own eyes.
Really? How does he know if someone is on disability? How he know many of these are not seen in China? If they aren't then why aren't they? I don't think it is as simple as work ethic.
or change the consumer habit to consume less, and/or change how things are produce in order to them last longer (reduce planned obsolescence) or even better we rebuild the system to serve human needs instead of feeding capitalism's endless growth.
The mainstream assessment is deindustrialization is inevitable in the western world because all kinds of legitimate reasons: the cost is too high. The talent pool is too small. We are left behind and lack critical IPs and infrastructures. People are too lazy/stupid/uneducated/self righteous/<your favorite derogatory phrases>. We can hang on to our high-value service industry.
What I don't understand is, why would people even want the US dollar and its service industry if we can't produce sufficiently any more? And what about future conflicts in the world? The US can't even produce enough saline solution or disinfectant wipes, let along active pharmaceutical ingredients? Did people see what China goods we tariff on? We tariff China for advanced materials, electronics, machineries, and etc, yet China tariffs on our raw materials and agricultural goods. And we think the US can maintain its wealth by behaving like a colony of China? When there's a conflict between us and China, what do we do? Beg them for the life essentials? And we keep yelling to punish Russia and help Ukraine to win the war and we should, but with what? We can't even out produce artillery shells faster and cheaper than Russia, or drones faster and cheaper than China. Admiral Yamamoto used to say that he saw so many factories and chimneys in Philadelphia that he knew that those industries could turn into efficient war machines if Japan ever declared war on the US. Would he be able to say the same today?
As for what we can, wasn't the US a manufacturing powerhouse until early 2000s? BTW, the US is still a manufacturing powerhouse in some sectors, but we just can't make things cheap enough with good quality because we pretty much destroyed our light industry. Didn't China have nothing and it was heavy investment from the western world that helped China grow so fast and so rapidly? Then, why can't we shift investment back to the US and bring our key industries back? We kept talking about technical difficulties, yet we ignore the necessity of the matter.
All of these points are overstated or just flat out wrong. For example the price of cheap manufacturing labor in America isn't higher than it looks, it's much lower, because there are an extremely large number of NEET men.
The iphone, while impressive, is not the end all be all of American manufacturing. The major goal is to bring back tool makers and increase industrial density.
>Chinese manufacturing labor isn’t just cheaper. It’s better.
>In China, there are no people who are too fat to work.
This is obviously just dumb anti-american propaganda. Since this article isn't written in good faith it's not worth my time to debunk point by point.
Yeah sorry but the Apple math is so weird that it cmake me doubt the rest of the article. An increase of 54$ in taxes doesn't explain the 216$ increase in price. Of course to keep the same profit, the price would increase more than 54$ to handle some externalities and the decrease of sales, but it would be paid only once and do not need to increase at each step
The world is an interdependent eco- system these days. The idea that a country can isolate itself an reproduce expertise that has flourished elsewhere is a bit silly and tilting at windmills.
Globalization is a fact of the world today and the best path to better lives for everyone is through mutual cooperation and policies that lift all boats.
Trump's goals and attempts to change this are foolhardy.
> Let’s focus on America’s strengths in high end manufacturing, agriculture, and innovation instead of applying tariffs to all countries and products blindly. We should be taxing automated drones for agriculture at 300% to encourage their manufacture here, instead of applying the same blanket tariff of 54% to that that we apply to t-shirts.
Everything wrong and right with the author's thesis. Our present day high-end manufacturing, agriculture, and innovation are already facing the steepest tariffs from a broad range of countries. The uneven playing field extends to IP theft, heavily subsidised and protected industries abroad and other forms of unfair competition like port traffic manipulation or burdensome legislation.
The author think that "targeted tariffs" would have a different effect from what we see now with trade war and retaliatory threats, market instability and uncertainty. This is false, but also ultimately harmful to our "agricultural drone industry". It's hard to have a niche industry without the larger picture, and it's hard to have "drones" without knowing how to manufacture constituent parts and having a reliable domestic supply chain for such. A domestically sourced supply chain encourages innovation and adaptation to immediate customer demands and goods can arrive in days or hours instead of weeks or months. Innovative requests to parts makers aren't immediately harvested by Chinese industrial spies and knowledge and technological advantage can remain local for longer, allowing for time to progress again before others can catch up.
Encouraging lazy and unoriginal drone manufacture in moated "made in USA" assembly lines is precisely the low-end type of job that "no one wants to do" and will inevitably produce the least capable drones the least efficiently or profitably. Our manufacturing and industrial capacity needs to be the world's best and most cost competitive because nothing else will do.
Only automation can save American industry. There will be "fewer" jobs but they will require skill and training. Robot management and supervision and repair and update and retooling will all require a large labor force. Creating robots and the software they run on will continue to be an important and large sector of the software industry. But manufacturing is only about jobs in the way that having a healthy agriculture industry is "about jobs", hardly at all.
Manufacturing real goods is the difference between servility and freedom given that modern war in the nuclear age also entails producing billions of tonnes of metal and blowing it up in distant countries, and could require replacing percentages of the global shipping tonnage that would be destroyed in a major conflict. It requires manufacturing thousands of substation transformers and the aa systems to defend them.
If we had invested strategically into a variety of heavy and light industries over the past 30 years, we almost certainly would have invented better processes and formulae for making things than we currently possess. We could have more globally competitive steel, even more advanced finished products and the knowledge and experience to "make anything better and more profitably than anyone". Industrial production and manufacturing make up roughly 15% of US GDP today. "Bringing back manufacturing" might increase that number significantly but it's hard to see how or why it would need to be more than 30% outside of wartime. That wouldn't even require a doubling of the jobs involved because much of this would have to be automated.
I agree with the author's emphasis on education and "fixing" things being critical in the execution of any kind of industrial renaissance. If the tariff fight lowers tariffs globally, that is a small move in the right direction of leveling the playing field and rewarding domestic producers who are globally competitive.
Robot drones probably are something the US should do. Access to US farms is useful for anyone making agriculture products. Remembers these drones are part of the supply chain for food, and so doing them in the US makes the supply chain closer. You want the ag drones made in small city, not Silicone valley. However your might write the software in Silicone valley - that is where you will find a supply of people who can do that - some of those people will then be making regular trips to the factory though to learn how it works.
The US should look into other countries efforts to replicate Silicon Valley, you just can't. You will get some niche good, you will waste some money there, but you won't get the same level. '
This, without even considering for a moment that China is 4+ times the US.
This article is very goofy. America manufactures very complicated things. Building an iPhone at scale is not complicated in the grand scheme. Building it as low cost per unit is a complicated socioeconomic question- ive seen and read enough about working conditions at Foxconn to know that the complexity rests with the government control of the laborers' lives, and the laborers' lack of relief from what Americans would decidedly call slavery.
1- Tariffs will bring some manufacturing back to the US. The before/after tariff pricing presented in the article is fiction- price points cannot simply be doubled, consumers will reject it, pricing is extremely complicated and sensitive, Apple would have already had the iPhone set at $616 if they believed that was an attainable price for the volume. Apple is among the most profitable companies in the world, in part thanks to their mastery of labor exploitation.
2- Weak industrial supply chain- we have an incredible supply chain and industry can hop right on. Trains, planes, and automobiles galore. Extremely adaptive and we have plenty of room to expand. Auto manufacturers dont seem to mind building in the US, slightly more complicated than the toys that Molson sells.
3- We dont know how to make it: some things sure, most things: yes we do. We do have some additional capacity building required but this is not some crazy challenge. The beautiful thing about it is that, for the stuff we cant make easily, we can just pay the tax and keep in motion. It becomes a simple optimization calculation.
4- effective cost of labor- this is a challenge for sure but it has significant upside implications for American labor and the American lower and middle class. Again, this is a simple optimization. He points to all the fraud in the American system and the slave-like conditions of the Chinese system as if those are things things that shouldn't be addressed / barriers to entry for US? US needs lots of improvements that should be addressed not matter what.
5- Infrastructure- I seriously doubt the electricity stats but accepting it at face value, we have endless gas and sunlight in the west, US can adapt here as well. China notably does NOT have endless gas supplies.
6- Made in America will take time- OK? I am here for it!
7- Uncertainty- I would love to see them permanent. But locking in some wins from 4 years of America-first, modernized manufacturing base will go a long way.
8- Most Americans are going to hate manufacturing- why is that something you get to declare and presume? I think Americans will love job opportunities.
9- The labor does exist, we are just paying them to not work. it's an epidemic and circular problem. A bigger current issue is that we also dont have enough jobs to put low skilled workers to work. We need more low-ish complexity but reliable jobs.
The true and sad truth is that manufacturing can be moved anywhere but the people that keep parroting about it's importance are in complete denial about the primary issue: costs. These costs have very little to do with infrastructure and building factories or logistics. Those are a contributor, sure, but that only scratches the surface. While China has seen insane growth in the last 20 years, that growth is at the expense of workers. No doubt they have a lot of value in terms of skills(which take a long time to acquire) but you also need to remember that there is a difference between the significance of working in Asia and Europe/north America. To us Europeans (and North Americans) work brings stability and security. In Asia, work is the difference between life and death, regardless of how skilled you are-you are legally expandable. Does anyone seriously believe that iPhones will be made in the US? The basic salary at foxconn is just under 320$/month or $1.81/hour. That is around 10x less than the US. This is ignoring the atrocious working conditions and far above the 40 hour work week. If we do factor in that as well, the difference is likely in the 25-30x range. I come from a country with a minimum hourly wage of around $3.6, let me tell you, as soon as the clock hits 18:00, people will drop everything where they stand and go home. The only way to compete with China is to automate everything and let machines do all the work, which is not a terrible idea but also nearly impossible to achieve. And even if you spend two decades doing all that, there are costs to all the R&D to get there. No one is going to buy a $15k iPhone, nor will they buy a $20K laptop. A logo that says "Made in X" won't justify the price. This comes from someone that uses a dual-xeon workstation as a personal computer.
Here's another example: a market that has been completely dominated by China: consumer drones. Believe me when I say this, I hate DJI and while I have one, I refuse to use it because of all the security implications. How many European and US companies are competing with them? Quite a few actually but the big names off the top of my head are Parrot and Skydio. I own both a Parrot and a Skydio and the quality of both is amazing. Yet they are still barely keeping up with DJI and at 5x the cost despite the demand - DJI still holds 90% of the market share. I can justify the price because of my privacy concerns but that's 1/1000 people. For most people it's always going to be a trade-off between price and quality+privacy.
If you want to enforce all that through tariffs, just put 5000% tariffs so that the local manufacturing cost will be the same as the cheap import and you solved the problem. How many people will be willing to spend 100 bucks for a pair of socks? That's a different story. The soviet union attempted something similar for several decades while trying to copy western technology. Anyone that knows a bit of history can tell you how that ended. Spoilers: not a success story.
Fine, we underestimate the difficulty. But we can make a detailed plan like other countries do. The US has massive advantages. Just no longer so massive that we can expect to win on sheer awesomeness.
I feel like we in the US have a horrible split evaluation of ourselves: either we're supreme or we're doomed. Both sides of that split are emotional states, not useful facts.
> But we can make a detailed plan like other countries do
The problem isn’t that we don’t know this: it’s that the person making the decisions rejects the idea of needing to make a detailed plan, or even understand the situation well enough to recognize the problems a plan would need to address.
There's an argument that America is fundamentally broken at this point.
By fundamentally, I mean value wise the country is splitting apart. Trump is the saviour for half the country and the devil for the other half.
It's basically taken less than a hundred years, even after riding on the back of world war 2 and hegemony, to bring the country back to the great depression.
The trade wars for me are just another desperate attempt by the country to point blame elsewhere.
House prices are at an all time high.
Cost of living is becoming unbearable.
So, $25 dollar menial jobs are scoffed at, because of inflation.
Inflation is due to out of control printing/spending and government debt. Debt is due to big government, capitalist greed and oligarchy.
Capitalist greed is due to economies of scale when offshoring. Oligarchy and big government is due to an entrenched lobby system.
Lobby system is due to the cost of electioneering and bad decisions by successive governments.
It goes on and on.
Root cause: Systemic rot.
Diagnosis: Failing empire
Prognosis: UK (if the fall is managed)
You're right: it's a bit racist. It's also faulty reasoning: you went to a high school in Cupertino with a markedly higher population of second-generation Asian-Americans, and went to a high school in an extraordinarily wealthy area; in fact, I think you might be attempting to generalize from the zip code with the highest density of immigrant professionals in the United States. If you want to generalize from China, that by itself is 1.4 billion people; they're as varied as any large population.
But I’m also Asian myself and all my relatives and everyone I know from China is the is way.
It’s a stereotype. Asian tiger moms. Asians are good at math. Math competitions, test scores. Quantitative metrics everywhere point to a worth ethic that is viciously high.
My conclusion of course is derived from quantitative evidence from general populations and iq scores by country. When I mentioned Cupertino I did it only to say that all the quantitative evidence happens to align with my anecdotal experience.
The amount of pooh-poohing of this idea is even more than I would have expected from HN, despite tech’s love of belittling others ideas.
The reason we need manufacturing is because the middle class is decimated. None of us tech workers feel it because we don’t live in neighborhoods that have been decimated by it. We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that have been destroyed by it.
Too many people say it will take “years” to get factories operational. That’s why Elon is there. He knows and has done this, to point out which regulations need to be axed in order to improve the time to market for new factories. Trump will listen to him and get rid of any regulation that doesn’t make sense, or even regulations that do make sense but take too much time. For better or worse factory building will be faster over the next 3 years.
Now that we have these greenfields for new manufacturing opportunities, instead of standing there with your arms crossed, shaking your head why the idea won’t work, how can you take advantage of this new opportunity to get rich?
> We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that have been destroyed by it.
Blue collar workers were the first to push for globalization, because they suddenly could afford a lifestyle that used to require the salary corresponding to a couple of steps upper in the corporate ladder. A blue collar salary suddenly could provide for many more amenities... til the salary was no more!
Everyone wants manufacturing back, but only for the products they can produce, because everyone still wants to buy at Chinese prices.
Furthermore, the regulations that most stand in the way of cheap manufacturing are environmental regulations, and good luck with that! We have got used to breathe clean air, and I feel most people still love clean air more than they hate globalization.
Blue collar workers never pushed for globalization because they knew exactly what would happen, they would lose their jobs and they did.
The irony now about Chinese goods is that those of us that can afford it avoid them as much as possible. I check every product that I buy on Amazon to make sure they aren’t made in China because they could be sending me poisoned goods.
Which is why things that bring back manufacturing to the US is something we were doing. It's just unfortunate that instead of continuing that, the current administration is trying undermine the effective efforts of the previous administration's actions that helped bring manufacturing back into the US.
No, it doesn't. There is a presumption that manufacturing is Better, a more ideal way of organizing the economy, based on a false nostalgia of America past.
sure, but it will take longer than 4 or 8 years and everyone in power wants their own thing, not continuity. it cannot happen without a long term plan and long term plans cannot happen if have, maybe, a year to do things and the rest is election time.
Molson has a Chinese spouse, directly benefitted from Chinese manufacturing for a long time, and often spouts direct propaganda from his X account so while he's likely to be right about a lot of things he had/has a strong incentive to not imagine alternatives to the status quo.
What attacks? Fwiw: "he's likely to be right about a lot of things". Perhaps I should have been more specific: I think his analyses are mostly correct, his predictions are not.
Subscribe to ground news so that you know what historically a news sources biases are.
We never stopped manufacturing, we just stopped employing people.
> We don’t have the infrastructure to manufacture
That's trivially false given we're the second-largest manufacturer in the world. We just don't want to employ people, hence why we can't make an iphone or refine raw materials.
The actual issue is that our business culture is antithetical to a healthy society. The idea of employing Americans is anti-business—there's no willingness to invest, or to train, or to support an employee seen as waste. Until business can find some sort of reason to care about the state of the country, this will continue.
Of course, the government could weigh in, could incentivize, could subsidize, could propagandize, etc, to encourage us to actually build domestic industries. But that would be a titantic course reversal that would take decades of cultural change.
Concur, employee training and retention are at an all-time low. There are no positions available for junior employees, minimal onboarding and mentoring of new employees. Organizations have stopped planning people's careers. Used to be that the employee's career growth was their manager's problem, while the employee could focus on the work. Now the employee must market themselves as often, if not more often, than actually doing the work. Meanwhile organizations see employees as cost centres and a net drain on their revenue sources.
Corporate culture in America is definitely broken. I'm not sure how we can fix it.
> minimal onboarding and mentoring of new employees. Organizations have stopped planning people's careers.
I hear from all the much more senior devs about how they learned OOP in company training after years of C, or how their employers would give bonuses for finished projects, and that sort of thing. I always seem to join the ship when the money train and training train leaves the boat.
I think R&D for tax reasons needs to be changed, we had so many tech advancements used to this day from Bell Labs. Now only Microsoft, Google, Apple etc can afford to do R&D and so all the innovation is essentially only worth while to them if they can profit from it.
Granted I do think if you build something innovative you should be able to monetize it, but it takes investing a lot of blood, sweat, tears and money.
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It's also fundamental tech and a research pipeline supporting new ones.
There are numerous examples of whole competencies were transferred to a foreign partner, leaving only sales and marketing in the US. TV's for example, gone by 2000, leaving only a swirl of patent walls to further prevent them from coming back. https://www.detroitnews.com/story/opinion/2014/10/22/america...
And research? DEC WRL, Bell Labs, Xerox Parc ... Which corp has the gumption to fund any of that again? They'd rather pad the current quarter than invest in the next.
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To get employers to invest in employees, they'd need more of a stake in it. Right now if you invest $200,000 to train someone, they can immediately quit and go work somewhere else and you're out $200k, so they don't do that.
A way to fix that would be to e.g. issue student loans for the training and then forgive them over time if the employee continues working there. But that's rather disfavored by the tax code when forgiving the loans is considered taxable income, and you would have people screaming about "abusive" companies sticking you with $200k in debt if you quit right after they give you $200k worth of training.
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In networking the situation is just ridiculous. Companies just expect people to know Cisco Nexus, ASA, XE, Palo Alto, Linux, AWS VPC, and do a bit of database and backup admin all for less than $100,000 a year.
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> Organizations have stopped planning people's careers. Used to be that the employee's career growth was their manager's problem, while the employee could focus on the work.
Could you please inform my managers who keep pestering me about career growth of this shift so I could just focus on the work? ktnx
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> Now the employee must market themselves as often, if not more often, than actually doing the work.
Maybe only tangentially related to your post, but this has been on my mind a lot lately. After many years of doing all kinds of tech and business consulting gigs, I decided to somewhat specialize over the last 3 years and have been spending some time on LinkedIn this year.
What I can't figure out is how (arbitrary percentage) 30% of the people I follow do any work when they are on LinkedIn posting/commenting on posts _all_ day.
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Employees have always been responsible for managing their own career growth and always will be. How can it be otherwise? It would be foolish for an employee to let someone else handle career growth for them as their interests aren't aligned (or even known). If you want help with career growth then find a mentor, don't rely on your manager.
Managers should facilitate training to improve employee productivity and help prepare them for a promotion. But that isn't really the same as career growth.
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You fix it the way every other industry has fixed it: broke/agent model.
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>We just don't want to employ people, hence why we can't make an iphone or refine raw materials.
This is it. Aside from manufacturing, most recent AI startups are almost universally aligned in the desire to use it to reduce headcount. It's plastered all over their landing pages as a selling point: "use our product and you won't have to hire people."
Business culture is eating its own young and hollowing out the future with such empty goals and sales points.
I'm skeptical of actual results. There are a lot of layoffs attributed to AI but far fewer cases of increased sales attributed to it.
> Business culture is eating its own young
it's not eating its own young. It's externalizing the costs.
And it's understandable, because the cost of employees are perhaps the largest line item in the budget.
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Ford Vs. Dodge Brothers
I'm American and heavily involved in manufacturing for industrial/mining/agricultural customers.
'We just don't want to employ people' is a gross simplification. We do want to employ people, and lack of skilled labor is a serious problem which has hampered business growth for years,
The first unspoken problem is that very few young people want to live where many factories are located. I can't blame them. I certainly jump through hoops to live in an area well removed from the industry I work in but not everyone has this luxury.
The second is psychological. How many kids do you know who are ready to commit to a future of 35+ years of factory work in their early twenties, even with reasonable pay. This influences manufacturer's hiring practices because of the 'skilled' labor thing. Putting time and resources into training employees when there is a high probability they will make a career change within 3 years isn't really acceptable.
This is HN, so I don't know if this resonates but as a thought experiment, would you take a welding/machine operation/technician position for 25 - 45 USD/hr (based on experience)? Overtime gets you 1.5 base rate and health insurance + dental + 401k is part of the deal. All you need is a GED, proof of eligibility to work in the United States and the ability to pass a physical + drug screen on hiring. After that, no one cares what you do on your own time if you show up, do your job and don't get in an industrial accident. Caveat, you have move away from anything remotely like a 'cultural center' but you do have racial diversity. Also, you will probably be able to afford a house, but it won't be anything grand or anywhere terribly interesting.
There is a dearth of applicants for jobs exactly like what I've posted. Why don't people take them?
> There is a dearth of applicants for jobs exactly like what I've posted. Why don't people take them?
It's pay. It's always pay.
You gave a range so I'm guessing the lower end is starting out, why take that when nearly every entry level job, with far less demand, pays about the same?
Start your pay at $45/hr and people will flood in. If they aren't, it's because the factory is too remote for population to get to. Put that factory in any mid to large midwestern city and it'll be flooded with applicants.
How do I know? About an hour south of Louisville, Amazon keeps building giant warehouses and hiring workers, and people fight over those jobs. They don't pay half of that.
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> This influences manufacturer's hiring practices because of the 'skilled' labor thing. Putting time and resources into training employees when there is a high probability they will make a career change within 3 years isn't really acceptable.
We've had decades of large companies laying people off (effectively) without warning, and the lessons of "don't trust an employer" are... fairly well understood by a lot of folks. If I had the promise of working some place for, say, 20 years, with a statistically 0% chance of being let go because someone wanted to goose the quarterly numbers to get their bonus... yeah, I'd have gone for it years ago. Even 25 years ago, that wasn't much of an option with most companies. Lean/Kaizen/JIT were all big movements by the 90s and ability to ramp down headcount was a requirement for most companies.
Where does 'skilled' labor for specific types of manufacturing processes come from? High school? With slashed budgets and worsening teacher/student ratios?
Businesses could step up and create environments that people competed to work at - pay decently, invest in their workers and community - but that requires a commitment to stick with the people and community even in the lean times. And most companies don't want to, or more likely simply can't, operate that way.
30 years ago I considered positions like that. Some of my family and friends did, and were there for years - decades in some cases. I don't think there's many of those left any more.
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Lol, $25hr. McDonald's entry-level wage is $20hr in CA. The $5 premium is not enough of an incentive to move to the middle of nowhere for a job.
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Yeah I think I would say you're right to doubt if this resonates on HN. You're posing it to an audience which has very little GED-level representation. HN more often has people who did well in school and are at a much better disposition for higher-salary jobs.
I'm not part of the target population but my guess is that a large factor has to do with people's tendency to go down the path of life that is most similar to the path they've already tread. If you grew up in a 'cultural center' it's less of a paradigm shift to take the crappy job around the corner rather than move somewhere slightly more remote to start a new career even if in the long run it could actually lead to a more decent life.
Oddly, literally everything you just described is true about my pure remote software engineering position, except I had to get bachelors in computer science first.
I think it's worth specifying even further: wealthy business owners don't want to pay what a US employee costs.
Most jobs are wholly unsustainable. You have to job hop every couple of years to keep up with inflation because God knows you're not getting a raise that keeps you comfortable.
This has led to churn and brain drain and the slow collapse of US domestic business.
It's not that people don't want to work, it's that wages have fallen so far behind the cost of living that it's financial suicide to stay in any one job. Even with all the traps like employer sponsored healthcare, most people just can't afford to be paid the pittance most businesses are willing to pay.
This is a deep societal illness in the US. We've glorified and deified the concept of greed to the point where even talking about income inequality and the unimaginable concentration of wealth is just anathema. It's seeped into the everyday consciousness in the form of "I'm the only one that matters, fuck absolutely everyone else"
I genuinely believe that America will never, ever recover until we address this. We will always be this sick and broken country until the state entirely collapses or we get our shit together and address income inequality.
I have some real serious doubts that we'll ever get there, but it's easy to be pessimistic.
The USA is number 1 in median disposable income at purchasing price parity. https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
This makes me think that it at least as much to do with high (unrealistic?) employee expectations as business stinginess.
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The problem is that we're talking about "manufacturing" as one big homogeneous thing. The US obviously makes a bunch of stuff, but it has very limited ability to make lots of kinds of stuff, especially in a hostile trade environment.
The US manufacturing sector is about half the size of China's in terms of value-add, but it's much smaller by any other measure. The US has focussed on high-value verticals like aerospace and pharmaceuticals, where intellectual property provides a deep moat and secure profit margins. That kind of manufacturing doesn't produce mass employment for semi-skilled or unskilled workers, but it does create lots of skilled jobs that are very well paid by global standards.
That's entirely rational from an economic perspective, but it means that US manufacturing is wholly reliant on imports of lower-value materials and commodity parts.
A Chinese manufacturer of machine tools can buy pretty much all of their inputs domestically, because China has a really deep supply chain. They're really only dependent on imports of a handful of raw materials and leading-edge semiconductors. Their US counterparts - we're really just talking about Haas and Hurco - are assembling a bunch of Chinese-made components onto an American casting. To my knowledge, there are no US manufacturers of linear rails, ballscrews or servo motors.
If the US wants to start making that stuff, it's faced with two very hard problems. Firstly, that it'd have to essentially re-run the industrial revolution to build up the capacity to do it; secondly, that either a lot of Americans would have to be willing to work for very low wages, or lots of Americans would have to pay an awful lot more in tax to subsidise those jobs.
It's worth bearing in mind that China is busy moving in the opposite direction - they're investing massively in automation and moving up the value chain as quickly as possible. They're facing the threat of political unrest on a scale they haven't seen since 1989, because of the enormous number of highly-educated young people who are underemployed in unskilled and semi-skilled jobs.
Lots of Americans want to bring back mass manufacturing employment, but very few of them actually want to work in a factory. You can't resolve that contradiction through sheer political will.
I did a tour of a huge beer plant in the US. The 4-5 floors where they made the beer had maybe a dozen people total. I was told back in the day it would have been thousands of workers.
It's not even aerospace and pharmaceuticals. Any manufacturing that comes back onshore will not employ massive amounts of people.
They will automate it. Which, to be fair, will help employ some Americans. But it won't be employing them to work 9-5 in a factory. It will be used to employ Americans to build and maintain the machines building the product.
> The US has focussed on high-value verticals like aerospace
Which is about to take a huge nosedive, as both Europe and China pull back on buying critical systems from the US. And can you blame them?
There's an excellent youtube series (by a Finnish ex-military officer) on the likely impact of recent events on US arms sales to Europe. They do have choices!
Trump and Musk's threats to invade and blackmail (e.g. by cutting off Starlink) will be felt long after they're both gone.
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100% agree with you!
I have worked US manufacturing and manufacturing R&D for most of my career: pharmaceutical, microelectronics, materials, aerospace, etc. The US is awesome at manufacturing when we want to be.
One problem is that "modern MBA/business philosophy" views manufacturing and manufacturing employees as a cost center and there is so much emphasis on maximizing gross margin to increase shareholder value.
So business leaders scrutinize the hell out of anything that increases the cost of their cost centers:
- employee training & development? hell with that.
- Increasing pay to retain good employees in manufacturing? Why? isn't everything mostly automated?
- manufacturing technology development? Not unless you can show a clear and massive net present value on the investment... and, then, the answer is still no for no good reason. I have pitched internal manufacturing development investments where we conservatively estimated ~50% internal rate of return and the projects still didn't get funded.
There is also a belief that outsourcing is easy and business people are often horrible at predicting and assessing the total cost of outsourcing. I have been on teams doing "insource vs. outsource" trade studies and the amount of costs and risks that MBA decision makers don't think about in these situations really surprised me initially... but now I'm use to it.
Anyhow... the US (and Europe for that matter) can absolutely increase manufacturing. It is not "difficult"... but it would be a slow process. I think it is important to differentiate between difficulty and speed.
You could simply make taxes scale inversely with the number of employees. Make the tax scale with a lack of career path. Even more tax if you don't have a system to measure and reward performance. More tax for lack of R&D. They don't have to be huge amounts, just enough for the MBA to stfu.
> The actual issue is that our business culture is antithetical to a healthy society. The idea of employing Americans is anti-business—there's no willingness to invest, or to train, or to support an employee seen as waste. Until business can find some sort of reason to care about the state of the country, this will continue.
I think you're exactly right there.
>> We don’t have the infrastructure to manufacture
> That's trivially false given we're the second-largest manufacturer in the world.
I want to quibble with that a little bit. I don't have the numbers, but relative position matters too. The US could be "second-largest manufacturer in the world" if it only manufactures Dixie cups, other countries manufacture nothing, and China manufactures everything else.
My understanding is Chinese output is so huge, that even if the US had maintained steady or modestly growing manufacturing output from the 70s or whatever, it would be dwarfed by China.
No, we're a very close second in terms of output, almost on par. [0]
The difference is China has something like 10x the number of workers in manufacturing and can efficiently take on smaller or custom work.
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[0] https://www.brookings.edu/articles/global-manufacturing-scor...
We produce weapons. We are an arms dealer empire.
Our biggest exporter is Boeing and sure Boeing produces commercial aircraft but their position has a lot to do with inertia as the accountant leadership of Boeing is doing their best to destroy Boeing by nickel-and-diming every aspect with a complex web of outsourcing that will fall apart the second there is any disruption in international trade.
What China has now is the infrastructure and ecosystem to manufacture. You need some tiny screws made of titanium? Well, there's a factory that produces that down the street.
The last time we got employers to care about employees it was because the unions dragged the bosses into the streets and beat the daylights out of them.
Unions are all conservative trump voters now. Labor isn’t left wing anymore. Arguably never really was (sorry coping anarchists and marxists, but usually the greedy monical wearing boss still leads to better outcomes than most “back against the wall” types we end up with when we let leftists have one iota of power.
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> Until business can find some sort of reason to care about the state of the country, this will continue.
The best financial years Puerto Rico had ended when the tax incentives to be there went away. It's a real shame. Puerto Rico was #1 in production, above the US and Japan. You could buy something made in Puerto Rico and you knew it was a high quality product. Its much harder to gain back that level of quality once you've effectively killed such a culture, I can only imagine the detriment in Japan if they lost their work culture and how much harder it would be for them to regain it.
This is even showing up a bit in tech now. The number of places that expect some articulation Venn diagram of skill sets is too high.
There are too goddamned many stacks to expect that your best hire is going to already have used everything you’re using. There are people who have used everything, but you’re mostly going to be hiring flakes if you look for those, not Right Tool for the Job types.
>That's trivially false given we're the second-largest manufacturer in the world.
Sure, but we don't manufacture the things that are typically made in 3rd world countries and the lead time to build that infrastructure is years, and generally would result in us moving down the tech tree ladder from being a consumer economy to a manufacturing economy with all of the negatives associated with that.
This attitude that manufacturing is moving down the tech tree ladder completely misunderstands manufacturing. IME the entire notion was invented by elitist economists and embraced by CEOs looking to justify sending manufacturing overseas for short term profiteering. Regular people bought in because of the promise of cheaper gizmos.
It’s the sort of attitude that infected Boeing and resulted in taking them from the peak of aviation to an embarrassment. Because they don’t know how to lubricate doors or tighten screws.
Building things is hard, and requires significant technology and skills among a lot of people. A service based economy inherently looses that technology and skill.
Tim Cook interviewed and said China isn’t the low cost labor anymore it once was. China has become the place that knows how to manufacture things, especially electronics.
And is that quoted fact in absolute terms or per capita / as percent of GDP? That makes a big difference as to how we should interpret it.
Just because the US is manufacturing doesn’t mean it has the infrastructure to manufacture more.
The actual issue is that our business culture is antithetical to a healthy society.
I agree with the unhealthy society and your statement got me thinking. In regards to health what happens when global trade is shut down and a country can not make it's own pharmaceuticals for example? About 64% of people in the US over age 18 are on prescription drugs. Some of those drugs have really dangerous rebound effects if one suddenly stops taking them. Some of those effects can be deadly, especially blood pressure drugs. Most of those drugs come from China, some from India. How quickly can each country start manufacturing and distributing it's own prescription drugs? Would that cause a quick adjustment to the culture or is that not enough?
To clarify, I just Googled for: what percent of american adults are on prescription drugs?
I got back from "AI Overview": Approximately 64.8% of adults in the United States report taking prescription medication at some point in the past 12 months. This figure is based on data from the Centers for Disease Control and Prevention.
The key phrase here is "at some point". I guess a huge amount of it is a very short 1-3 week dose of antibiotics.
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According to Brookings, 80% of drugs are imported.
https://www.brookings.edu/articles/pharmaceutical-tariffs-ho...
Which means policies that reverse that are immensely important. The process of offshore our jobs and much I.P. took decades. Getting them back and rebuilding manufacturing support will take a long time, too.
Just need to make steady progress each year with incentives that encourage large leaps in progress.
> We never stopped manufacturing, we just stopped employing people.
I don't think it's just that. We manufacture, but we aren't great at the entire chain. China is much better are specialized tooling, etc. We have definitely lost a lot of knowledge in critical parts of the chain.
> We never stopped manufacturing, we just stopped employing people.
That’s a misleading oversimplification. While it’s true we haven’t stopped manufacturing, we did offshore a massive portion of it--especially after the Open Door Policy with China and subsequent free trade agreements. That shift didn’t just change where things are made; it fundamentally altered corporate incentives. Once production moved overseas, the need to invest in domestic labor--training, benefits, long-term employment--shrank accordingly.
Yes, I should have said "we just stopped employing americans".
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Most companies that do manufacturing in USA are oriented to making business-to-business products, where high margins can be achieved.
As an European, there have been many decades since the last time when I have seen any competitive "made in USA" product that is intended to be sold to individuals.
There are products that I buy, which have been designed in USA, e.g. computer CPUs, but none of them have also been made in USA.
When I was young, it was very different, there were many "made in USA" products that could compete with those made elsewhere.
Chip subsidies seemed to work with little to no consequence. I'm not sure why you're so pessimistic about this obvious mechanism you even mentioned
It's shareholder capitalism. Capitalism can be a great thing, but shareholder capitalism defines profits as the only reason for a corporation to exist. Humans are simply resources to extract work or profit from, and destroying the future of the country is an unfortunate externality. CEOs are obligated to behave like sociopaths. Lying, cheating, stealing, and subverting democracy are all good business if it returns value to shareholders. We see this over and over again, and wonder why our society is so fucked up.
And since every major corporation is behaving like this, even if a CEO wanted to give a shit about the country, they can't do anything about it because someone else will be more cutthroat than them and eat their lunch.
> Humans are simply resources
I thought that the human resources department made that obvious.
The notion of shareholder primacy capitalism is one of those ideas that seems great on paper, much like communism, but its end effects are disastrous.
It seems great cause it’s simple and gives a nice simple answer to “what’s capitalism” and “how to make effective companies”. That intellectual (existential?) laziness is costly long term however.
This is the root issue
The idea that “labor is cheaper elsewhere” is simply a neutral statement of economics is wrong — “lower living standards” is not just a economic measure, it’s a political statement about the value of labor and labor conditions. The US and by extension the “western capitalist world” has been exploiting labor since day 0 with chattel then later globally slavery.
The reason Japan was the biggest manufacturer exporting to the US post war, is because the SCAP forcibly rewrote their constitution to be explicitly capitalist. Read “Understanding Defeat” for detailed proof of the 7 year occupation of Japan, explicity to destroy any semblance of Japanese imperial/keretzu culture, and replace it with explicitly capitalist structure. To be fair to MacArthur, they did suggest labor practices, like unionization, but it was a thin veneer suggestion, not forced into cooperatives and syndicates.
China moved into that position post 70s, because Japanese labor began getting “more expensive.” Nixon and Kissinger saw an opportunity to exploit “cheap” labor because there were no protections for workers or environmental protections - so “opening up china,” plus the Nixon shock and floating of interest rates allowed for global capital flight to low cost slave-like conditions. This is why labor and productivity began to separate in 1971, there was a “global south” that now could be exploited.
NAFTA made Mexico and the southern americas the agricultural slave countries etc…starting in the 90s, and on and on just moving the slave-wage ball until there’s nowhere else to exploit.
It’s not a conspiracy to demonstrate that capital will move wherever it needs to in order to exploit “arbitrage opportunities.” Its good business/MBA capitalism 101.
Just like #2 in Austin powers said:
> Dr. Evil, I've spent 30 years of my life turning this two-bit evil empire into a world-class multinational. I was going to have a cover story in "Forbes". But you, like an idiot, wanted to take over the world. And you don't realize there is no world anymore. It's only corporations.
> We just don't want to employ people
I don't think it's a matter of willingness, but simple global geo economics.
There's places where producing A, whatever A is, is economically more efficient for countless reasons (energy prices, logistics, talent, bureaucracy, cost of labor, etc).
That's not gonna change with whatever investment you want or tariff you put.
But the thing I find more absurd, of all, is that I'd expect HN users to be aware that USA has thrived in the sector economy while offloading things that made more sense to be done elsewhere.
I'd expect HN users to understand that the very positive trade balances like Japan's, Italy's or Germany's run are meaningless and don't make your country richer.
Yet I'm surrounded by users ideologically rushing into some delusional autarchic dystopia of fixing american manufacturing for the sake of it.
> I don't think it's a matter of willingness, but simple global geo economics.
I don't see a difference. If we want local industry, we must address the global geo economics.
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Cost of labor is the issue: china is enslaving people to work.
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How many Americans are dying to and will do tedious labor (not many), as well robots, automation and AI can do a lot of it and or will end up doing a lot of it.
If we want to strengthen America (military & economy) immigration reform is needed! This could be unpopular but such reform could be ...those who want to come here must serve in our armed forces for x amount of years and can bring two to four family members here that are able to start working and contributing to the economy immediately (pay taxes). Rounding up and getting of rid of these eager want to be Americans when we have adversaries with larger armies and we bang the drum on beefing up defense (and our economy) doesn't make sense to me.
Importing immigrants directly into the military sounds like a bad idea. I’m guessing many would be less likely to want to lay their lives down for the new country, so drafting them seems like a great way to end up with a bunch of disloyal troops.
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These two to four family member who immigrate would not also be required to serve in the military? If not, what are the criteria used to select the one-out-of-five?
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> China generates over twice as much electricity per person today as the United States. Why?
This appears to be completely wrong? All the stats I can find say that the US has about 4x the per capita electricity generation of China.
Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight.
> If you’re building a new factory in the United States, your investment will alternate between maybe it will work, and catastrophic loss according to which way the tariffs and the wind blows. No one is building factories right now, and no one is renting them, because there is no certainty that any of these tariffs will last
Policy by amphetamine-driven tweeting is a disaster.
> 12. Enforcement of the tariffs will be uneven and manipulated
Yup. The 145% level seems designed to create smuggling, and the wild variations between countries to create re-labelling. It's chicken tax trucks all over again.
> This is probably the worst economic policy I’ve ever seen
Per Simpsons: this is the worst economic policy you've seen so far. The budget is yet to come.
> If American companies want to sell in China, they must incorporate there, register capital, and name a person to be a legal representative. To sell in Europe, we must register for their tax system and nominate a legal representative. For Europeans and Chinese to sell in the United States, none of this is needed, nor do federal taxes need to be paid.
This is .. not a bad idea, really. It would probably be annoying for small EU and UK exporters but less so than 10% tariffs and even less so than random day of the week tariffs. Maybe one day it could harmonise with the EU VAT system or something.
(also I think the author is imagining that sub-par workers, crime, and drugs don't exist in China, when they almost certainly do, but somewhere out of sight. Possibly due to the internal migration control of hukou combined with media control?)
> Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight.
It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight. The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point.
This is the part that is so frustrating to me, and not just with regards to tariffs. It's that I see the extremes being so laughably bad (though not necessarily equally - I'm not "both sides"-ing this), and more ludicrously bad is that I've seen positions that don't follow these extremes as being derided now as "centrism". E.g. before the administration's attack on higher education, I do believe a lot of elite universities had completely jumped the shark with their ideological purity tests like required DEI statements. And importantly, there were thoughtful, measured criticisms of these things, e.g. https://whyevolutionistrue.com/2024/02/10/jon-haidt-goes-aft....
But the administration attack is so ridiculously egregious and demands an even worse, government-imposed ideological alignment, that making logical arguments in this environment feels almost pointless.
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The weird part for me is this: While the economy was evolving, Production was offshored from US for cost-reasons, but also in part to focus on higher-skill labor in US, delegating the low-skill mass-production to China.
Over time, China also developed mid/high level skills, complemented their low-skill production offering with it and now competes in new industries, new tech, etc.
So...to compete with China, the country with 4x the US-population, the solution is that low-skill labor needs to return to US....?
Shouldn't instead the focus be to again foster mid/high-skill labor, moving the part that is offshored again towards low-skill labor...?
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Thing is, manufacturing in America is up. The 2008 crises dealt a blow, but manufacturing has been building-back. I don't think people realize how many high-value items are made in the United States. Let the East Asians make our mass-consumer junk while we focus on the high-value stuff.
Just goes to show the administration isn't working with facts and doing the hard-nosed analysis required to drive effective policy.
https://fred.stlouisfed.org/tags/series?t=manufacturing%3Bou...
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It turns out good policy takes a long time to play out and isn't well suited for the current destabilized US political system where nothing good gets done and the rare things that do get reversed within four years.
That IS what Biden was trying to do though with the CHIPS Incentive Act. He was trying to onshore production of semiconductors in a partnership with TSMC. Didn't do him any favors, and Harris lost the state of Arizona anyway. Americans had the choice between a party that was serious about trying to onshore some manufacturing and a party that wasn't, and it made the wrong choice because vibes, basically.
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We were getting the slow and steady version at least for chip manufacturing with the CHIPS Act but Trump has a major need to get credit for everything so that's being torn apart too.
The US faces a much tougher hill to climb though in regards to bringing manufacturing back. China had it easy because they had most of what you could want; a huge labor force that could upskill to manufacturing (the rural poor population), cheap labor (kind of an extension to point 1 but also includes their lower COL and wage expectations over all), and low environmental barriers.
To bring manufacturing back to the US is a way harder lift; we have a lot tighter labor market, if we shift a lot of people to manufacturing someone needs to take the jobs they leave. We (well I at least don't enjoy the idea of going back to when rivers caught fire on the regular) don't want to strip environmental protections back to a level to make it cheap to dispose of waste. The best targets are low labor, high price, high skill goods, like, I don't know, chip manufacturing!
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> It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight.
There were a lot of slower manufacturing on-shoring incentives during the Biden administration that would have presumably continued under the Harris administration. Mainly around green energy and electric vehicle manufacturing incentives - which have successfully resulted in new auto, battery, and supply chain factories being built mostly in red states - and semiconductor manufacturing. The Biden administration also maintained and increased tariffs on specific types of products coming from China including EVs.
So I don't think your categorization of the two choices Americans were given is quite accurate.
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Well, money talks and it's hard to choose the other option. On one hand bring manufacturing back to US and pay them higher, because otherwise the pay in McDonald's is better with a less demanding physical (cmiiw, don't live in US).
On the other hand, keep manufacturing outside of US for cheaper labor to keep price low and having bigger margin. It's an easy choice to make.
And again this is not a US specific problem, it's almost all of countries nowadays have a massive wealth gap that makes people racing to the bottom of living / working standard.
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>It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight.
Excuse me, but I am old enough to remember Biden's program such as CHIPS, a slow and steady protection and promotion of home-grown industry.
America had the choice. It chose wrong. Are Americans going to assume the consequences of their choices or are they going to lie to themselves they weren't given the choice? That last option would fit more with the "character" of the America nowadays, the one who voted Trump: make mistakes and blame someone else for it.
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> The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point
The slow and steady way that post-WW2 Korea and Japan did needs a unanimously agreed 10-20 year long game plan between industry and government, which is incompatible with democracies who change colors and strategies every 4 years where the new administration begins to tear down everything the previous administration did because they serve different voter bases and corporate lobby groups.
It is also incompatible with the US since a lot of corporations made bank due to offshoring and will fight it every way they can since they don't want to deal with costly US labor who can unionize or sue you for millions if they break a finger at work. Even TSMC Arizona had to bring half the workers from Taiwan, and it's not like they're making tchotchkes.
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> The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used to grow their economies was completely absent as even a talking point.
I think this is because China is an autocracy, so they can make long-term plans. Democracies that swing as wildly as the US currently does is no place for that, and that's not limited to the new administration.
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Was it absent? The "Green New Deal" was hitting on some of that. You can't beat "<Some other country> is going to pay for it" and "Coal jobs are going to come back", especially when there's no accountability or fact checking.
But Americans were given that choice? The chips act was an industrial policy play based on the industrial policy playbook of east asian countries like South Korea and Taiwan.
I'm not a fan of industrial policy or the chips act, but it seems to be just the choice you are asking for.
I find it annoying that you think the other choice was “offshoring is great.” Spending on US factory construction surged under Biden. This was largely due to stuff like the IRA and the CHIPS Act. If voters had made different choices in November 2024, in Congress as well as the Presidency, I think we could have had even more aggressive industrial policy — instead of this absolute shitshow that will permanently damage the US’s economic position.
On the other hand, I am a believer in the idea that voters get the government they deserve. So maybe we deserve this.
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The candidate who opposed Trump during the primaries would have done something very similar to what you said. But then she was born with ovaries so the Republican Party wanted nothing to do with her as the top boss.
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[dead]
> China generates over twice as much electricity per person today as the United States. Why? >> This appears to be completely wrong? All the stats I can find say that the US has about 4x the per capita electricity generation of China.
I believe the comparison is absolute production, not per person. Anything else would be odd. Considering China has 4x the capita of US it would mean that in absolute terms China is producing 8x the energy of the US. In reality it seems to be roughly 2x (although both sources are a bit outdated):
US 2023: 4.18 trillion kilowatt-hours (kWh) of electricity from utility-scale generators. Additionally, small-scale solar photovoltaic systems contributed around 73.62 billion kWh 1.
China 2021: 8.53 trillion kilowatt-hours (kWh) of electricity
--
But the staggering difference is how much of the electricity is attributed to the Industrial sector:
China: 70% (~6 trillion kWh)
US: 26% (~1 trillion kWh)
So overall China allocates 6x the electricity to production compared to US...
China electricity consumption is growing by 6-8% a year and is likely to hit 10500 trillion kilowatt-hours in 2025. Which at $0.10/kwh the avg is a $1 trillion dollars. Though from what I understand in China home users are charged about $0.07 and industry $0.08 so $7-800 billion a year on electricity alone.
They are rapidly moving to renewable with grid scale BESS auctions avg $66-68/kw they are likely to have electricity prices at $0.01-0.02 over the next few years. I think it will be extremely tough to compete with China in manufacturing unless there is huge investment in renewable and storage systems to keep electricity prices competitive with China who are going to move on from coal over the next decade.
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> I believe the comparison is absolute production, not per person
Original article definitely said "per person".
China allocates much more to industry and/because it allocates much less to personal consumption. Especially things like air conditioning. US per person consumption is still 2x that of EU average.
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China is also more electrified generally than the US. They only just pulled ahead but the rate of change is startling.
Since 2000 they've gone from 10% of final energy being electricity to nearly 26% while the US has been basically flat around 23% and they are both predicted to grow (or not grow) at roughly the same in the next few years.
Well, they are making all the stuff for the rest of the world!
Despite all the hand wringing, heavy industry uses a lot more power than data centres.
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Can someone explain to me why EU VAT is considered a tariff, while US sales taxes are not? They both seem a sale tax to me.
Because VAT is collected at the border on imports, some people (wrongly) consider VATs a tariff. Considering that VAT is rebated on exports, VATs are trade neutral.
Sales tax as implemented in the US is not as tax efficient as VAT due to the impact of sales taxation on intermediate transactions during manufacturing. VAT only taxes the incrementally the value added at each transaction) whereas sales tax applies to the entire value at each stage.
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Only people who are wrong consider VAT a tariff. Yes, importers have to pay it, but so do local manufacturers.
VAT has basically the same effect as sales taxes with a much more complicated tax incidence.
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Really wondering about the same, since VAT is applied to everything too, not only imported products and services.
The answer is: rhetoric. It's a fake argument to justify US tariffs. It won't work for people like you and me, but Trump fans will love it.
They're not. Only disingenuous charlatans say they are.
On crime they most centrically do, watch the China Show (not the bloomberg one) on youtube. One example given on the show is that Once you go into northern villages and small towns you start seeing propganda posters on why you shouldn't take drugs. Homelessness is widespread and present too but you just wont see it in city centers more on the outstkirts.
Police in cities will beat homeless people and get them back on buses to where their hukou is, so the homeless that remain are very good at hiding. Hostile architecture is also very common in China. But there is a lot of sub quality housing (eg in sub-basements that lack windows or good ventilation) that allow much of the working poor to at least be technically housed even in expensive cities (many restaurants also provide housing for their staff in the dining area after closing, or did at least 20 years ago). The outskirts used to have more slums than they had today in Beijing, most of the slums have moved into sub-basements as far as I can tell (called the “ant tribe”).
Crime really is much lower than it was a decade ago. People have more money, societal trust is higher. Drug use in clubs has always been a thing, but China differs from the USA in that their is no social support at all for addicts (so they either get clean with help from their family or they die).
Do not watch it please unless you want to consume worldview-distoring propaganda and become more ignorant as a result. It's made by 2 American expats who gotten kicked out of China when visa-requirements were tightened, and no-skill immigrants were no longer welcome.
They've become anti-China youtubers serving the hungry China-hating audience on how China is bad and a paper tiger.
Instead watch this guy (https://www.youtube.com/@Awakening_Richard). I'm not saying he's unbiased, either, but he's thoughtful and I think he brings insight into how the Chinese intelligentsia thinks about how the world works.
But back to your point - it's oft repeated that Chinese population decline will destroy China in the long run and poverty in Chinese society.
He made a video on this exact issue.
https://www.youtube.com/watch?v=pdRH7aPWGGc
The TLDR version is that about half of the Chinese population lives in desperate poverty (and are economically invisible), and just a couple decades ago 90+% of Chinese lived like this. One cannot bring about a transformation into an industrialized wealthy lifestyle overnight, but coming from the experience of the past decades, the Chinese have been remarkably effective in this, and the following decades will see these people lifted up to modern societal standards as well.
By this alone, one can conservatively expect a doubling of Chinese GDP, as there will be twice as many consumers and laborers who consume and work at the level of the current workforce.
This also means that China has a huge and high marginal utility domestic demand for goods, and even if sanctioned, they wont run of people to sell to.
When I visited China, the expats told me that recreational drug supplychains were strictly compartmentalized. There was the supply of illicit drugs for Westerners (imported by the sons of Nigerian businessmen, the cliche went), the supply of illicit drugs for Chinese people (who only dealt with Chinese people), and then there were the vast array of drugs that are completely legal to get over the counter in China without a prescription (at a pharmacy or CTM shop) that would be controlled substances in a US pharmacy.
That the official line from the CCP was that China had no drug problems, no prostitution, a variety of other things†, and that there were no gay people in China; That these were all Western ailments.
Urban China is a panopticon state not only digitally, but culturally. Housing is much tighter than the US, walls thinner. Your underwear is hung out to dry in clear view. "Privacy" in terms of politeness norms mostly consists of pretending you don't see or hear a thing. Neighbors generally know a lot about what each other are doing. 7% of the population are Party members, and in Marxist-Leninist systems this connotes something closer to earning a military officer commission; The Party is not trivial to apply to, the Party is strictly regimented, Party rules are held above and before the civil law, Party members are expected to be informers and have a strict lawful-good orientation from the perspective of the regime. Penalties for commerce in illicit drugs are even more extreme than the US, and due process is not bound by the same presumptions.
There are lots of factors conspiring against the sort of informal US inner city street drug distribution being as big of a deal in China.
Disclaimer: All my information is more than a decade out of date, and was only ever a thin slice of opinions from mostly Westerners in some first tier cities.
† From an academic paper: "2 The Six Evils are prostitution, drugs, selling women and children, pornography, gambling, and feudal superstition. Criminal gangs, or triads, are often counted as a seventh evil. These vices represent impediments to modernization and throwbacks to social problems that were present prior to the Communist takeover. Elevation of a problem to an "evil" symbolizes that the Beijing regime will mount a "campaign" or "struggle" against it."
> hat the official line from the CCP was that China had no drug problems, no prostitution, a variety of other things
Reminds me of a book I read years ago about the Soviet Union. Officially prostitution didn't exist there either, so there were no laws on the books about it. Enforcement usually was around various "antisocial" laws and usually for the street-walkers. Crime in general was mostly fine, so long as it wasn't a threat to the state, against well-connected people, or otherwise visible.
No wonder Russia got so bad after the strong state dissipated.
> The Party is not trivial to apply to, the Party is strictly regimented, Party rules are held above and before the civil law, Party members are expected to be informers and have a strict lawful-good orientation from the perspective of the regime.
If only... (source: am Chinese)
That's an interesting subject. Are there any books about it?
Once again, want to point out how this is simply American leadership not wanting to accept their loss and move on. For the first time in the history they're not being perceived as the "global leader", and that's not acceptable from their POV. Now it's just freaking out and hoping that some extreme policy changes will change the course. From my personal experience, most people act this way when they're in distress and can't think ahead because of all the externalities.
This isn't just ego. This is an impending existential issue.
America needs to increase manufacturing capacity if it wants to maintain hegemony and possibly world peace.
China will soon have the ability to take Taiwan and Korea and Japan. If that happens it's game over for any American interests and perhaps democracy as a whole.
Wargames[0] paint a grim picture of an upcoming conflict between China and America over Taiwan with the US barely winning at a great cost including the loss of many ships, aircraft, and the depletion of missile stocks.
The Chinese have a naval production of 260 times that of America and account for an ungodly amount of global steel production so they'll be able to bounce back faster than the US can. With a lead time for producing American missiles measured in months and years it will be just a matter of time before they take the countries in the region that are critical to American manufacturing if they're so inclined.
[0] https://selectcommitteeontheccp.house.gov/sites/evo-subsites...
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> For the first time in the history
I'll charitably assume you meant first time in post-war history.
USA as "The Global leader" didn't emerge until after Europe was ravaged first by The Great War and then WWII.
No-one was looking toward the USA for leadership during The Great Game. Even by the time of the outbreak of WW1, the size of the USA's army was very small, half the size of the British army, which was itself considered small compared to the French and German armies.
US foreign policy was still inward looking, protectionist and isolationist until it could no longer ignore the case for war.
The foreign power projection really didn't kick into gear until 1945 onward and the determination not to let too much of the world fall to communist ideas.
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https://en.wikipedia.org/wiki/Extinction_(psychology)#Burst
Regarding the potential to annoy small businesses, it’s actually pretty easy to hire a firm to represent you in the EU. You’ll need a lawyer at some point anyway so it’s often the same firm.
If we had the same requirements here in the US it would likely become the same.
Delaware / Ohio corporations? I think those already exist for 'business friendly' incorporation states. Might also be Nevada and Texas, though I'm more speculating there or recalling singular offhand cases I heard about.
That is really the big problem with the current policy in the US: it's completely unclear what the policy is and how long it will last. This is not a stable climate for investment. Would you invest in a country where the president plays Russian roulette with the economy?
Most corporations will wait it out. Corporations that have an established interest (like Big Tech) will bribe Trump to get the exemptions they need to continue their business. Everybody else will have to decide how much they will want to depend on such an openly corrupt system. There industries that see no problem in dealing with corrupt regimes.
I think they conflated electricity production growth with total output.
Output in the US has been flat for some time, while China has been on a steady rate of climb for several decades.
> To sell in Europe, we must register for their tax system and nominate a legal representative.
American companies? Register for EU tax system?
I can buy from anyone in the US and worldwide for that matter, and as long as they're willing to figure out shipping they don't need to register anywhere, I can handle taxes myself when receiving.
What "AI" did they use to write this?
You can’t handle VAT rebates on your own, but America lacking a VAT system itself can’t really take advantage of that.
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Tl;Dr: The author makes a strong case for broader, higher tariffs but understands it is impossible to help American manufacturing knowing that the next administration will cave to China and Wall-street and immediately move to undo everything. The solution is to work together to make American protectionism work.
1. They are not high enough: Correct. Raise them more.
2. America's industrial supply chain is weak: That is why we need to bring the factories and resource extraction home.
3. We don't know how to make it: Perhaps we can steal the IP like China? We will figure it out.
4. The effective cost of labor in the US is higher than is looks: Then raise the tariffs higher.
5. We don't have the infrastructure to manufacture: You have to build it first, This will get cheaper and easier as we continue to bring industry home.
6. Made in America will take time: Blaming permitting time and Bureaucracy is a ridiculous excuse. The federal government can override all state and local requirements here. Its a choice to slow projects down.
7. Uncertainty and Complexity around tariffs: Democrats will have a hard time undoing progress if there is movement to reshore industry. War over Taiwan seems basically inevitable and this will harden resolve.
8. Most Americans are going to hate manufacturing: Most (well a very large and non-negligible percent of) Americans are going to loose their jobs because of AI. Most of us hate our jobs already, manufacturing will pay better. There are always endless service industries...like delivering food, if they do not like supervising a robotics controlled factory. It is disingenuous to imagine a return of American manufacturing without Huge AI and robotics investments. More factories will be lights out than the alternative. The jobs will be in servicing the robots, computer systems and quality control. We aren't talking Rosie the Riveter and the author must know it.
9. The labor does not exist to make good products: This is why there must be some discrimination over tariffs and why they should not be a simple even percentage. We can choose to bring back GPU manufacturing but pass on fast fashion. And during the process of negotiation we can give up those industries we do not want in exchange for support of a China embargo.
10. Automation will not save us: The author cannot imagine a world where manufacturing is not motivated by global trade. They fail to understand that it does not matter how much more productive China is when protectionist policies prevent trade. The goal is to get America to a place where it can manufacture everything it NEEDS on its own.
11. Americans file lawsuits: Good- this will increase the quality of goods we enjoy and we can get past the disposable foreign garbage that floods our markets. 12. enforcement will be uneven and manipulated: so get on board and help to improve it, stop undermining the attempt to help this country.
13. tariff policies structured in wrong way: Really not a terrible idea to have a disparity in tariff between input goods and finished goods but it is a half measure. We need the entire supply chain from resource harvesting, to tooling, to components to final finished manufacturing if we want to ensure national security in a world post-NATO.
14. Michael Jordan sucked at baseball: Was there serious consequence to MJ trying his hand at baseball? We got through COVID. We have survived massive supply disruptions and the market has been pumping as hard as ever. If you are not currently retired it is absurd to worry about fluctuations in the stock market. And if you are, you likely invested in companies that sold out America.
> The goal is to get America to a place where it can manufacture everything it NEEDS on its own.
That is just incredibly stupid. The only country that tries to do this is the hellhole known as North Korea and even they fail. No country is an island and doing this will just ensure America becomes a third world country or worse
The other day I saw the results of a poll [1] where 80% of Americans thought the *country* would be better off if more Americans worked in factories. However, only 20% of Americans thought that *they* would be better off if more Americans worked in factories. It was surprisingly bipartisan.
In other words, people like the idea of this, but no one actually wants this.
[1] https://www.ft.com/content/845917ed-41a5-449f-946f-70263adba...
Americans are cosplaying (voting their belief system, not what they'll do, the "revealed preference"), as they do as farmers [1] [2] [3] [4], as they do as "rural Americans" [5]. It is an identity crisis for tens of millions of people [6]. Their crisis is our shared political turmoil. Happiness is reality minus expectations.
From the piece: "The people most excited about this new tariff policy tend to be those who’ve never actually made anything, because if you have, you’d know how hard the work is."
[1] https://www.agriculturedive.com/news/agriculture-shifts-farm...
[2] https://www.terrainag.com/insights/examining-the-economic-cr...
[3] https://www.ers.usda.gov/topics/farm-economy/farm-labor
[4] https://www.mckinsey.com/industries/agriculture/our-insights...
[5] https://www.youtube.com/watch?v=6q_BE5KPp18
[6] https://www.theguardian.com/us-news/2025/jan/11/there-are-a-...
Agreed and the same people do a lot of their shopping at Amazon/Dollar General/Wal-Mart where low price goods are only possible because they are made off shore for much much lower wages. Bringing that manufacturing back here would destroy their buying power.
I do find it interesting that a lot of these same people are against raising the minimum wage because "it will bankrupt all the businesses" but somehow think that bringing manufacturing for the goods they buy back to the US won't do the same. At best, going from off-shore labor costs of say $15/day to $15/hour (minimum for US workers) is an 8x multiplier and will somehow magically work but a 1.5 multiplier on minimum wage is just untenable for any business.
Honestly, it is mostly an emotional response around "fairness". They don't want others getting a "raise" when they don't "deserve it". However, everything they get is 1000% deserved. The greatest trick the rich ever pulled was convincing the middle class that all their woes are the fault of the poor. The political comic of "That foreigner wants your cookie!" captures it pretty well (imo).
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While simultaneously needing migrant labor with lower minimum wages and labor laws for agricultural workers.
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> people like the idea of this, but no one actually wants this
As others have pointed out, this is not a contradiction. (Read their reply.)
However, the question of 'Do YOU want to work in a factory?' is heavily influenced by the fact that we don't see factory work as a high-paying career, or a career at all. Part of the solution to the factory problem is enhancing the value proposition for the employees.
I am ambivalent toward tariffs, but the idea is that if we make foreign products more expensive then the higher price of domestic goods becomes more palatable by comparison. If paying domestic workers more raises the price of domestic goods, and if people are willing to pay that price for whatever reason, you will start to see growth in manufacturing.
It's also silly to reject long-term goals simply because achieving them is difficult.
> If paying domestic workers more raises the price of domestic goods, and if people are willing to pay that price for whatever reason, you will start to see growth in manufacturing.
We ran this experiment for decades. It turns out that Americans are not willing to pay the higher prices, which led to our manufacturing consolidating around higher-value items.
This notion that we should move Americans from high-productivity jobs to lower-productivity jobs, and that such move will somehow enhance our prosperity is nutty. Lower-productivity jobs mean less income for workers, means less income in the system, means lower prosperity for all Americans. Moving tens of millions Americans to higher-productivity jobs while maintaining relatively low unemployment has to be seen as one of the economic success stories of the modern age.
Separately, Americans do not feel like this happened. That's a different discussion, about allocation of wealth. Our poorest states have higher GDPs per capita than many "rich" western EU countries. Mississippi has a higher GDP per capita than the UK. The difference is that the US has designed a system where every citizen lives a precarious existence, potentially a few months from destitution while other rich countries have not done that. We are allowed to make different choices in the US if we don't like this outcome.
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Instead the products might just cease to exist. Or cease to exist in a particular market. Tariff-free trade brings into being products or markets that previously didn't exist.
> If paying domestic workers more raises the price of domestic goods, and if people are willing to pay that price for whatever reason, you will start to see growth in manufacturing.
Why would you need to pay them more? Remove their legal ability to organize, cripple their social safety net, and they will either work or die.
I'm not advocating for that, but it does seem to be the path we're deliberately taking.
This lines up with the experience of the people I know who have worked in factories, there seems to be a disconnect with all these pundits and economists (and many people on the internet in general) talking about basic manufacturing work and the people I have met with actual factory jobs. The pay could've been worse and it wasn't the worst job I've heard of but it also wasn't great (they said they would've preferred a boring office job). There's a reason the pundits talking about the virtues of manufacturing jobs are pundits.
We already have a massive prison industrial complex, a lack of basic rights and a complete disregard for due process.
Very soon we'll be forced to make shoes and other things behind bars. No trial needed, just indefinite detention.
Now that is an elegant solution! They are starting to punish people with the wrong opinion and strip them of their citizen rights already; instead of flying them to El Salvador, might as well keep them as slaves in a federal prison! Pesky dissidents and manufacturing problems solved at the same time!
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Old school Soviet school of thinking, very nice.
Would interesting to know what percentage themselves or their own children wanted to work at a factory. Can tell with a huge degree of confidence for all practical purposes thats 0.
Its always easy to expect other people to make sacrifices working these jobs, while imagining you and your kids working office desk jobs.
Is everyone on hacker news so entitled and privileged they cannot even imagine an American citizen wanting to work for a living?
I absolutely would work a factory job if it paid 100k+ and meant owning a home someday.
Instead I got 100k student loans and make 60k at a desk and I'll never have a life outside of work because I simply can't afford it.
I'll be 35 this year after 12 years of working and just starting to have a positive net worth.
American dream my ass.
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There's absolutely no contradiction here.
Currently less than 20% of Americans work in factories. All those 80% need to want is that the 20% of people who want to work in factories can do so.
If that 20% never had a factory job before, it is not a reliable indicator. It just means their current job is already shitty. They may get a factory job and realize that they were better off flipping burgers, even with less pay.
From TFA:
> When I first went to China as a naive 24 year old, I told my supplier I was going to “work a day in his factory!” I lasted 4 hours.
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I would consider factory work if it paid a liveable wage and I didn't have other options.
I started out asking myself, what would it take for American's to be okay with factory work. For example, my grandfather worked in a GM plant in Kansas City for most of his life. I mean he had started out wearing suits and doing books for a bank when he was young and fresh out of high school.
And then I remembered, oh yeah, the Great Depression happened when he was young and he was let go from his bank job — the bank folded. When the decent paying factory job at an auto assembly plant eventually came along he probably jumped at it.
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Everyone wants more manufacturing in the US, but nobody wants to be a factory worker. People would rather starve or go homeless than work in a factory. Until Americans overcome their pride, this is going to make building manufacturing in the US very difficult.
Everybody wants to be a factory worker if the compensation is good. Why do you think Chinese people work in factories? Because it pays better than other jobs they can find.
"But if factory wages are good then products will be expensive"
No, because the wages for the factory worker is less than 1% of a products shelf price.
If 20% of people really think they'd be better off as factory workers, that's actually kind of a lot. Can you imagine if 20% of the working population really did work in factories? That's an enormous number.
Great, so we have enormous consensus and prestige for 60 million willing participants in the re- industrialization of USA. What's the problem again?
https://en.wikipedia.org/wiki/Belling_the_Cat
> In other words, people like the idea of this, but no one actually wants this.
Misinterpretation of data.
> The other day I saw the results of a poll [1] where 80% of Americans thought the country would be better off if more Americans worked in factories. However, only 20% of Americans thought that they would be better off if more Americans worked in factories. It was surprisingly bipartisan.
https://www.bls.gov/opub/ted/2023/a-look-at-manufacturing-jo...
Compared to the current percentage of people employed in manufacturing (9.9% - 12,759,129 / 128,718,060), there are **more** Americans that would like to move into manufacturing, not less.
It’s the same as every tech bro on here who says, “Go join the trades!”
People want to be sure that their success is protected and they love telling other people what they should do.
Reminds me of the "college is a scam, learn a trade" people, all of whom went to college and plan to send their kids to college as well.
just like management class in any typical corporation
Let's me real... 80% of the hard shit in US factories will be ran by mexican migrant labourers like in agriculture. And maybe that's enough of a "win" for US interests.
I mean 20% of the population thinking they would be better off working at a factory is huge. So we need more than that?
It says "only 20% of Americans thought that they would be better off if more Americans worked in factories." Which isn't the same as believing they would be better off if they worked in a factory.
I agree with that sentiment. I would be better off if more of you, just not me, worked in factories instead of trying to compete with me for my non-factory work.
Jonathan Blow's "Preventing the collapse of civilization" [1] makes a similar point. It is easy to assume that, if we can build EUV machines and space telescopes, then processing stainless steel and manufacturing PCBs is baby stuff, and is just waiting for the proper incentives to spring up again. Unfortunately that is not the case -- reality has a surprising amount of detail [2] and even medium-level technology takes know-how and skilled workers to execute properly. Both can be recovered and scaled back up if the will is there. And time -- ten or twenty years of persistent and intelligent effort should be plenty to MAGA :)
1. https://www.youtube.com/embed/pW-SOdj4Kkk
2. http://johnsalvatier.org/blog/2017/reality-has-a-surprising-...
But the important question is - is it worth it? Should we be doing something more valuable instead?
> But the important question is - is it worth it? Should we be doing something more valuable instead?
It's hard to quantify. E.g. the CHIPS act is a strategic thing in case TSMC is disrupted for some reason. How valuable is insurance? How much useful work (and skill) do you ship overseas in exchange for promissory notes[0]?
[0] https://www.grumpy-economist.com/p/tariffs-saving-and-invest...
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People seem to want jobs with the macho kudos of manual labour, but with the physical comfort and salaries of email jobs, and I have some very bad news about that combination.
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IMHO, with the Big Tech boom winding down, what is more valuable for us to do? Manufacturing could prepare us for the next wave, whatever that might be.
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I've seen this brought up with board games that are now primarily made in China, because injection molding is cheaper there especially for small quantities. The US could make the board game minis, but everyone who is capable of it in the US is producing high value high quality aerospace, industrial, medical parts. It's a waste of their time to produce small runs of toy parts.
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Depends -- do you want the US to become a vassal state of China? That's the trajectory we were on. China is going to catch up rapidly on technology, AI, and services, and before a few months ago the US was going to continue falling behind in every other conceivable area.
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Depends on how evaluate what is valuable. E.g. here in europe a lot of people think subsidising local agriculture is not valuable and we should just import cheaper food. On the other hand, a lot of people agree that food security is kinda valuable by itself. And want similar security in more fields. In that sense yes, doing „low tech“ is valuable in the long run.
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I think large scale modeling and allocation for "more valuable" has been overly narrow - insufficiently diversified for uncertainty/unknowns, and subtly incorrect for western nations for decades now
It is if war is in the future. And I’m not saying this as hyperbole but based on statements made by NATO secretary general (both Rutte, previously Stoltenberg and former General Bauer) about Russia’s military production outproducing NATO, or Finish President Stubb speaking on the powers of the world shifting and the need to ramp production which were echo’d recently by Macron, or the Arctic region soon to become a contested region with China and Russia attempting to stake their influence in the area which is obviously at conflict with the personal interests of the other countries in the region. It seems obvious to me that the world is a bit hotter than before 2022, with the likelihood of some conflict between powers of the world coming to pass being greater. If production of raw materials to usable materials is all contained within countries that are deemed to be unfriendly by the one lacking this production capability, it’s a clearly in their vested interested to not be in that situation. Only problem is there is a seemingly idiotic US administration attempting to address these deficiencies, unless there’s some weird 4D chess play going on, but I’m not convinced it’s that.
Define "more valuable."
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yes it's worth it, no we should not be doing something more valuable
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Okay great, so ten to twenty years to onshore manufacturing. Why?
The US can't even make EUV machines, just parts of it.
I thought one of our labs invented it. maybe we are already doing it.
EDIT: no sorry wasn't a secret project. it was a consortium
https://en.wikipedia.org/wiki/Extreme_ultraviolet_lithograph...
"Can't even". I think there's only one country that can, so the US is not alone.
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I think the collapse of the American Empire is no more preventible than the collapse of the British, Spanish, or Roman empires. The issues with the US being the reserve currency has been known for a while now (and was even predicted by Keynes before the Bretton-Woods summit):
https://en.wikipedia.org/wiki/Triffin_dilemma
Any discussion of "bringing back manufacturing" that doesn't mention government spending or social programs to educate and upskill the population is not genuine. The current leadership are fools and ideologs who will only hasten the decline, which might actually be better globally if it lowers emissions. Time will tell I guess.
Empires come and go, that's just a fact of life. The question was whether they'd fall back relatively gracefully like (Western) Europe, now with multiple countries ranking at the top of "World's Happiest Countries", or whether they'll become Russia 2.0 with the biggest guns, richest oligarchs, and the worst quality of life.
It's still far from played out, but right now they're solidly on the road to Russia 2.0, with decades-long trends pointing that way.
The fall of the Soviet Union was arguably more graceful than the two world wars and myriad of colonial worlds it took Europe butt out. Even if you exclude the world wars it probably holds.
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The end of the empires of Western Europe was not graceful. Not even close.
It may seem that way because the countries within Western Europe that had done the empires are now stable and prosperous but what about the countries of Africa and Asia? The ones who had been part of those same empires of Western Europe?
If you talk to people in these countries of Africa and Asia I think you would find that people there would strongly dispute the idea that the empires of Western Europe ended in any way that could be called "graceful"
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This is explicitly referenced in “A User’s Guide to Restructuring the Global Trading System”, written November 2024 by Stephen Miran—current Chair of the Council of Economic Advisers of United States—which outlines the general ideology and strategies behind the current tariff situation.
https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese...
I'd believe that article more if Trump hadn't called on congress to eliminate the CHIPS act, or if tariffs+Musk hadn't undermined it, or if republicans were for the Green New Deal, etc. If you're interested in onshoring, the smart thing would be to work on a targeted approach in high-value areas.
It's a really complicated manoeuvre even if you're not actively trying to shoot yourself in the foot. Eg Domestic factors (automation, corporate offshoring decisions, etc) also contributed to manufacturing job loss. A weaker dollar would probably help, but isn't a silver bullet.
The main article for this post goes into this in a lot of detail.
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The American Empire never existed, because it never could. The US made the explicit decision not to occupy the defeated forces after WWII, save for strategic forces in place to protect the interests of the host countries. The US opened its market (the only market of size left and still the largest consumer bases in the world, by far) with no tariffs.
What the US got in return was cheap goods and a whole lot of debt. What the world got was stability. The US is no longer interested in subsidizing the global order.
The current discussion re: “bringing back manufacturing” is making the mistake that everyone always makes when Trump is involved: taking him at his word. The point isn’t to bring back all manufacturing. The point is to profit off of imports. Some manufacturing will return — whatever is high value added and benefits primary from cheap shipping internally - but nobody thinks that Americans are going to sew t-shirts.
Also, those who are looking for an American decline as comeuppance for being unkind to allies are going to be sorely disappointed. The US has everything it needs to be self sufficient, and no matter how batshit crazy the leadership is, it’s still — still — the safest place to park capital, still the largest consumer market by far (more than twice China), has a stable demographic and a middle class country to its south that brings in lower cost workers as needed. Not to mention being totally energy independent, bordered on two sides by oceans and with more potential port coastline than the rest of the world combined… and also holding the virtually all of the world's supply of high-purity quartz, which is a requirement for semiconductor production.
> The American Empire never existed, because it never could
This theory doesn't really explain what was going on at tremendous expense in Iraq, Afghanistan or even all those years ago in Vietnam.
If there is a decline, I expect it to be in internal security and the transition from high-trust to low-trust society.
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You don’t have to physically occupy a country to exert influence over it, and we weren’t “subsidizing the global order.” We profited from the order, so continued to bring it about. How do you think we became the economy we are today?
> The American Empire never existed
https://en.wikipedia.org/wiki/United_States_involvement_in_r...
Then explain what they've been doing in South America for the past 100 years.
> the collapse of the American Empire is no more preventible than the collapse of the British, Spanish, or Roman empires
They each had longer runs than we’ve had.
My pet theory is lead. From 1950 to 1980 we birthed a leaded generation [1]. Today, up to 60% of American voters were born before 1975 [2]. (Voters born between 1950 and 1980 came into the majority in the 1990s and should fall into the minority by 2028, but only barely. So in summary: Iraq War, Financial Crisis, Covid and Trump 47. It won’t be until the 2040s when truly unleaded voters, those born after 2000, command a majority.)
[1] https://pubmed.ncbi.nlm.nih.gov/35254913/#&gid=article-figur...
[2] https://www.pewresearch.org/politics/2024/04/09/the-changing...
Idk about the lead idea. There was a lot of BS going on in the world before it showed up.
America doesnt really have an empire. What is America's Hong Kong, India, etc?
America's empire isn't really built on blantant colonialism (although we do that, too). It's built on "planting" US favorable governments all around the world.
I mean, we have half of Africa shooting themselves in the foot over and over for our own benefit. And every time it looks like an African nation is going to do something about it, some counter-military force appears out of nowhere (with US arms?) and some important political heads are assassinated.
This isn't a conspiracy theory, either. The destabilization of world governments done by our government to our benefit is well recorded.
Dude come on
https://en.wikipedia.org/wiki/US_imperialism#Strategy
Puerto Rico, Hawaii, Guam, American Samoa, are locations that are directly under US control. The entire western hemisphere is within our sphere of control, and a huge chunk of the planet was either directly aligned with us (EU, AUS/UK) or was compliant for fear of regime change.
The country itself was founded on the destruction of dozens of civilizations, a victory so total you don't even consider it as part of US imperial conquest. I can't believe I even have to explain this to people on here my God.
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Missing reason #15: commercial lenders with a brain realize that these tariffs and this self-imposed domestic crisis will dissipate in the next ~6 years. Nobody's going to lend in this market to try to spin up a new greenfield project in the US that will take years to get operational when they can sit and ride it out - ESPECIALLY at these interest rates.
The government could make loans directly and guarantee purchase prices, but it's also stopped making payments congress committed it to, so you'd be crazy to trust any promises from the administration.
This is a big one. Once upon a time, the Democrats and Republicans listened to the same think tanks, so there was continuity in planning. Now, they seem to be opposed to plans simply because the "other side" came up with them. The whiplash we've been experiencing has torn the economy apart and scared businesses away.
You’re almost right. This is not a both sides issue. One side has made a concerted effort to get us to this point, and it started in the 80s or before.
Not only will it take years to get operational, there is no way it would ever reach the scale and reach of Chinese manufacturing, not in six years, not in sixty. Even if they throw trillions of investor money at it.
China and others are clearly demonstrating the power of capitalism with state support. The US is too busy infighting and keeping capitalism and politics separate (small government, let the market decide etc). You wouldn't find enough employees that want to work in manufacturing; you'd need millions to even try and get close to what China is doing.
Now I'm not actually OK with what China is doing, the paragraphs about worker conditions were quite telling. But I will recognize that it gives them the upper hand in manufacturing that the US hasn't had since the 50's.
(meta: I'm gonna have to specify "the 1950's soon" don't I?)
The apostrophe when specifying decades is incorrect, it's a common grammatical error.
Should be "50s" and "1950s". Sorry, I usually don't do this but I otherwise liked your comment and thought you might want to know.
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> demonstrating the power of capitalism with state support
This is actually an excellent reason for tariffs. If we can't beat them at their game because it goes against our principles, then just don't buy their stuff.
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I'm not so sure.
The tariffs most certainly will dissipate but we can't discount the chance that they may be replaced with actual written in law voted on by congress and signed by the president taxes that have similar but much more durable effects.
Manufacturing and heavy industry really hates off-shoring. They only do it because the sum total of other policy makes it the only viable option. I can see them taking a decent haircut in pursuit of some longer term goal.
I have a suspicion that the coming tax cuts will be extreme, and the gaps in critical funding will be covered with tariff income. This will essentially make tariffs a cornerstone for government finances.
Political suicide to roll back tax breaks if they are primarily for the <$150k earners, like trump wants.
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If it looked like congress was eager to vote these tariffs into law, things would be different, as that sentiment might outlast the current administration, but that doesn't appear to be the case.
7. Uncertainty seems overlooked these days. The job of politicians is to make people and businesses dare. Making people dare getting an expensive education or starting a business or hiring your first employee or whatever it might be. What that requires will vary (if it's a social security system or a tax break for new companies or whatever). But something it always requires is trust in the stability. That the calculus for an investment is valid over N years. That laws or taxes don't swing wildly with political cycles.
That has been the bane of brazil for decades, every politician, at every level, undoes or stops whatever the previous politician was doing so there's absolutely no guarantee what you're doing today will still work tomorrow.
Its a terrible state and situation to invest in a business doesn't benefit anyone. My hometown had a large cultural center built by the mayor, he couldn't run for reelection again, new mayor is elected, completely ignores the whole thing was built and lets it rot. Everything is only done for an election cycle, the next cycle could bring something else entirely.
Its terrible to live in a place like this, Americans have no idea how bad this is going to be for the country.
For decades one political party has fomented this by pushing disdain for intellectuals and experts and the effectiveness of government itself.
Its the integration and overall combined effect of the entire industrial pipeline that makes China so incredible. It processes all the raw materials and the recycling/reuse of off cuts through every possible way to turn those raw materials into components and then into goods with very little need for import from other countries. Its the complete system for a huge variety of goods.
To compete with that the entire pipeline from raw materials through components and final product needs to be reproduced and its taken China 40+ years to build up to this capacity and capability.
I think its something more countries should consider and do for certain pipelines but we are in a world with vast international trade and the winner(cheapest) takes most of the trade so whatever it is needs to be worth while within country.
Absolutely. Canada for example should not be shipping lumber and oil to the United States for further refinement. It should be processed domestically.
Canada and the US are long time allies and should be able to benefit from eachother without much hesitation. China is an adversary, big difference in posture.
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Why would that be better? Comparative advantage is real.
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Even getting workers to the factory is a concerted effort of trains and public transport, Americans would quickly clog the highways with millions of single occupant large vehicles without first investing in more efficient ways to move people
Scenario: someone builds a factory complex employing thousands of workers. Government builds and improves infrastructure and roads leading to and from that factory to get the workers in and out, as well as getting raw materials in and finished goods out. Someone properly points to the roads and says "you didn't build that", pundits freak out.
> Its the integration and overall combined effect of the entire industrial pipeline that makes China so incredible.
The incredible part is USA exported that entire sector to China.
They saw extra profit $ and didn't consider the consequences. I suspect there was a bit of racism involved where they thought the Chinese would never learn to go from manufacturer to designing products nor master the entire pipeline and end up competing with them in the domestic market. China obviously did because they funded engineering education heavily and learnt all they needed to and surpassed the companies they built for some time ago.
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It wasn't just the USA, the entire west collectively.
This is true, and at the same time, this article is absolutely rife with unsourced, unserious points. However insane Trumps plans, the fundamental "facts" presented here are largely a joke.
> Chinese workers work longer hours more happily and they’re physically faster with their hands; they can do things that American labor can’t. It’s years of accumulated skill, but it’s also a culture that is oriented around hard work and education that the United States no longer has. In China, there are no people who are too fat to work. The workers don’t storm off midshift, never to return to their job. You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
It's an actual joke to present something with such a derogatory view of the median American worker with no data to back it up. Most of America's "labor class" is in fact Mexican, the country with the highest annual hours worked per year. Secondly hours worked does not relate directly to productivity. American workers are the most productive in the world. [1]
More importantly, _we don't manufacture like this anymore, even in China_. Doing "acrobatics" on the factory floor is now obsolete. Much of what's said here fails to acknowledge that we would _not_ build our supply chains the same way as China does. China had a surplus of human labor (one that's facing an impending demographic crisis) and so used human labor in ways modern western countries would not and do not.[2]
[1] https://www.weforum.org/stories/2018/01/the-countries-where-... [2] https://ifr.org/ifr-press-releases/news/global-robotics-race...
Reproducing these supply chains is more possible than this article states. Doing it via destroying our economy however will not work.
I was thinking the same thing while watching "American Factory" on Netflix.
scrolled too far to see criticism about all that
And if China invades Taiwan, which they have said for decades they will do (we just don’t like to believe them), what then?
Do we sacrifice a democracy for the dollar? If not, is our economy annihilated? We have no credible alternative to reshoring for this reason alone.
> Do we sacrifice a democracy for the dollar?
I've got some bad news for you.
>>Do we sacrifice a democracy for the dollar?
What democracy? Whose democracy?
Trump just blamed Zelensky for the war in Ukraine again. The entire administration keeps saying they will make Canada the 51st state and "destroy canada economically". They want to take Greenland by force. I don't think America cares much about democracy anymore, only dollars. China will take Taiwan and US will will keep buying chips like they always did.
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The relations between Taiwan and the US have nothing to do with "democracy". First it was about anti-communism, when the Chinese government fled there and the mainland was taken over by the communists. Now it is about anti-communism and "China containment". The fact that Taiwan transitioned to democracy in the 1980s is just convenient to feed the public that this is indeed about "democracy", "freedom", the usual.
As a historical point, the US never had a problem with Taiwan being handed back to China at the end of WWII, since it is what happened. Again, this is all just a tool against the communists and then against China's increasing power as a whole.
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America does need to bring back manufacturing. Not because a manufacturing job that pays $25/hr is somehow better than a service job that pays $25/hr.
The US needs to bring back manufacturing for strategic reasons and in strategic areas.
And it needs to have the capability to scale up manufacturing in response to emergencies.
But also, importantly, the US doesn't need to do this by onshoring all manufacturing. Near shoring and friend shoring will have to be extremely important components of adding these capabilities, and unfortunately, teh actions the US is taking will likely hurt nearshoring and friendshoring and will end up making the US less strategically capable in manufacturing even if it's able to reshore a significant amount of manufacturing.
A skilled assembly worker makes closer to $30 or $40 an hour than $25. And that doesn't account for overtime. A skilled tradesman can make $40+.
Manufacturing is skilled, well-paid labor that requires commitment, attention, and care. That is why there's a shortage of labor--not because of wages.
>>A skilled assembly worker makes closer to $30 or $40 an hour than $25. And that doesn't account for overtime. A skilled tradesman can make $40+.
In theory. In practice the numbers are way lower.
As some one who has done quite a big time in India IT services firms, have lots of war stories, our Delivery manager would often tell us if US managers only knew adjusted for regular all nighters, whole week on-call hell weeks. Development phases where teams would be working days at stretch in office. The actual per hour rate of an engineer in India is at best $1 - $5 an hour. You just can't bill the customer that way.
Only reason why this even works is India is still poor and people work for anything.
Im sure, adjust for everything(in real practice) manufacturing hourly wages in China aren't all that different and wouldn't be surprised if they are at something like $1 per hour, or something such.
Americans have little idea how much affluence and luxury their ordinary citizen has. Most of the world would do anything even to be poor in the US.
Fair enough to say nobody in the US is signing up to work a hellish factory job for $1/hr anytime soon.
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Manufacturing can be automated, and that's what should be done.
Chinese finds it cheaper to pay people to do it.
America will find it cheaper to build robots to do it.
Then when no one has a job America will revert back to paying people to do it.
Life will always find a way to balance everything out.
The cheapest option would then just be to try to become allies with countries where manufacturing is growing the fastest.
Yes, China.
The policy should be collaboration with China. 50/50 state subsidized joint ventures with Chinese corporations on EVs, raw materials refining, solar panels and batteries, etc. At the same time, a gradual and predictable tariff in those targeted areas. All of this, with the explicit consent and collaboration with the Chinese government. You could kill 2 birds with one stone and focus these policies on green energy and energy independence -- lessening the effects of climate change.
That is what you would do, if you really cared about bringing manufacturing back.
As of today, there is absolutely no off-ramp. The Dem policy is basically trump lite with respect to China. We are moving in lockstep towards making them a geopolitical adversary, and for what?
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If we're going to defy the invisible hand, we should at least do it to benefit people in a concrete way - health care, education, UBI. Doing it for "strategy" is equivalent to simply burning the money people would have otherwise saved by doing nothing.
The components of a strategic manufactured product can be as simple as an injection molded switch, a LiION battery, capacitors, copper wire, etc., so the notion of bringing only "strategic items" back is as much a myth as the idea its mostly coming back to the USA. The goal here is to diversify the supply chain globally so its not concentrated in China. Internally this is sold as bringing MFG back to the USA (will happen to a noticeable degree), but that's not the actual plan.
So putting tarrifs on Mexico, Canada, Europe helps diversify?
For strategic, economic, national defense and public health reasons, I completely agree with you.
Too bad a large portion of our electorate is brainwashed by propaganda and/or completely out to lunch.
> Chinese workers work longer hours more happily and they’re physically faster with their hands; they can do things that American labor can’t. It’s years of accumulated skill, but it’s also a culture that is oriented around hard work and education that the United States no longer has. In China, there are no people who are too fat to work. The workers don’t storm off midshift, never to return to their job. You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
he knows a lot about manufacturing but weirdly not much about labor. very unsubstantiated, derogatory comment.
it gets worse!
> In China, there are no people who are too fat to work. The workers don’t storm off midshift, never to return to their job. You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
> Chinese workers are much less likely to physically attack each other and their manager. They don’t take 30 minute bathroom breaks on company time. They don’t often quit because their out-of-state mother of their children discovered their new job and now receives 60% of their wages as child support. They don’t disappear because they’ve gone on meth benders. And they don’t fall asleep on a box midshift because their pay from yesterday got converted into pills.
> And they can do their times tables. To manufacture, you need to be able to consistently and accurately multiply 7 times 9 and read in English, and a disturbingly large portion of the American workforce cannot do that.
like the fuck? where are your sources? this sounds like some ignorant shit to say
Lol that was my reaction too, this guy is an asshole. He should just leave.
I'd guess the source is stuff he has personally witnessed, which means even if it's true (would somebody just go on the Internet and tell lies?) it says nothing about prevalence.
It is extraordinarily malicious, and reminds me of Michael Richards.
Ignoring this is like ignoring the prophecitc Vivek tweet that triggered conservatives for him pointing out DEI for white people.
This post is basically correct. The Chinese will accept being exploited way harder than we will! Good going communism!
This shit is why I will resist Marxist bullshit with all of my fiber forever. Fucking barracks communist no matter how hard they try to claim “nah we don’t support that”.
> The Chinese will accept being exploited way harder than we will!
If only there was some framework to organize workers against exploitation... maybe even the workers of the world could unite?
"incentivize, subsidize" - yes. There should be less incentives and tax breaks for "holding an asset" and more incentives for making things that improve human lives. Most of the laws are set by the incumbents who stand to lose what they have built and who have the money to pay the lawyers to set the tax code. Real estate should not get incentives unless its getting someone in a home. Private equity, same. Venture capital, after a certain point, same. If you are worth a bazillian dollars, same. A lawyer with balls needs to take on the tax code. I'm kind of hoping the whole Harvard escapade awakens a few legal idealists out there.
> There should be less incentives and tax breaks for "holding an asset" and more incentives for making things that improve human lives.
I think you're overlooking that, say, giving out a 10-year loan for a small business is exactly "holding an asset" (holding a bond issued by said small business for 10 years). For the benefit of everyone involved.
I think of environmental conflicts that disappears in the US thanks to manufacturing moving to China.
In the 1990s there were numerous manufacturing plants in the US (two on the South Hill of Ithaca alone) that were found to be contaminated with solvents like
https://en.wikipedia.org/wiki/Trichloroethylene
People thought it was great stuff, you wouldn't believe how hard it is to get cutting grease off things after you turn them on a lathe and vapor de-greasing makes it go away just like that.
China has some of the most advanced agriculture on the planet including a "vertical farm" that can sell straw mushrooms for about $2 a pack where they are super-proud that humans only touch them with a forklift. (Contrast that to the labor-intensive mushroom farms of Pennsylvania where somebody cuts each one with a knife.)
We are pretty omnivorous (I think mealworms start with "meal") and my obsession with anime and Japan has turned into serious sinophilia but my wife and I are hesitant to eat "Chinese Food" grown in China because of widespread environment contamination, I mean they've been building up heavy metal stocks ever since Emperor Qin Shi Huang poisoned himself with mercury.
Yeah, it's underrated how the Chinese boom just did not care for environmental impact, and because political organizing is banned the public are limited in how much they can complain about it.
It used to be a thing that people were importing massive quantities of baby formula to China because they didn't trust locally manufactured stuff.
Why would obsession with anime and (I assume Jaoan is a typo for) Japan lead to sinophilia?
You know sinophilia means "love of China", and that anime and Japan are not Chinese, right?
Thanks for pointing out the typo, I fixed it.
Yes, but they're culturally related. Anywhere where people write with Chinese characters or used to write with Chinese characters has legends about nine-tailed foxes, for instance. The intelligentsia had access to Chinese literature and this diffused into the public imagination. [1]
For me it started out with being willing to enjoy media in an unfamiliar language (first Japanese) that gradually became familiar. Then playing the Japanese game Dynasty Warriors that got me thinking about the Romance of the Three Kingdoms and about the characters and the place names and other old Chinese stories like Journey to the West and pretty soon I am enjoying Chinese pop culture about old stories and new stories of the fantastic and even learning some Chinese, getting curious about Chinese mobile games that aren't known at all in the west because Chinese people cosplay as characters from them, etc. (At the university where I work I overhear conversations in Chinese almost every day)
Yes, Japan is a different culture which I still enjoy and appreciate, but for me it was also a gateway to China. [2] I was an anime fan for 30 years but in the last 3 years I've had the same kind of giddy feelings for Chinese pop culture that I had about anime at the beginning and of course that means I'm going to buy a whole fish and eat it with my family because my son's Chinese friend suggests it.
Lately I've been playing the Japanese game Dynasty Warriors Origins which has both Chinese and English voices and find it strange on one hand to hear legendary Chinese heroes speaking Japanese which I mostly understand and then listen intently to the Chinese which to me is still a wall of unfamiliar syllables where I struggle to pick out proper names and an occasional word or phrase -- but I have a great time trying!
[1] See https://en.wikipedia.org/wiki/Sinosphere
[2] ... and it goes the other way, China's pop culture is inspired by Japan (I think it's funny that many Chinese games like Azur Lane use Japanese voices in the west because they know the kind of person likely to play that kind of game knows phrases like suki da! and has an emotional feel for Japanese even if they aren't fluent in it)
This pretty much mirrors what a friend of mine said (he is a recently-retired Co-CEO of a medium-sized manufacturing business).
He's been telling me this, for years. It's not a secret. The information has been out there, for ages. I'm surprised that the administration didn't understand this.
> I'm surprised that the administration didn't understand this.
Why would you assume they don't understand? Every time they're questioned about the tariffs the narrative shifts. We have a trade deficit, we're getting ripped off, we want to bring back domestic manufacturing jobs, we'll automate them with robotics and AI, we're playing hardball to negotiate a better trade deal and get rid of fentanyl, it's a matter of national security, an economic emergency, the dollar is overvalued.
You cannot trust a word from them. If you want to understand why they're doing something you must look only at incentives and outcomes. My current analysis is that there's some internal conflict, but the overall push for tariffs comes from a desire to crash the economy and use the downturn to consolidate wealth and power.
I genuinely don't believe there's five-dimensional chess happening here. The problem is simply that the US president is a repugnant, stupid, erratic egotist who's surrounded himself with nasty people of varying levels of intelligence, with stupid ideas about how to run the country, and this is the policy result.
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A genuine question, presuming no correct answer: what is to be done about it? China is reportedly on track to run more than 50% of global manufacturing by 2030, if the World Bank is correct. What would you do to act against this? Is doing nothing acceptable?
Start by realising this is going to take decades to reverse.
Given the timescale any solution will require cooperation across political parties. You can’t start something that will get undone in four years.
Then accept it won’t make much difference to the inhabitants of bumfuck USA. Automation is what took their jobs.
Start at the top of the food chain and gradually work down. If America can make cars but not car tyres then implement gradually increasing tariffs on imported tyres. 1% this year, 2% next and so on. Pretty soon you have a car tyre industry again.
Know when to stop, just like it doesn’t make sense for a banker to clean their own house it doesn’t make sense for a rich country to be making tee shirts.
Of course this won’t happen because of the American political system.
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I would act against China - because China is making political moves that I do not like. (they are supporting Russia in Ukraine, they are building up to invade Taiwan, they are supporting terror in the middle east...)
By acting against China that means I applaud moving manufacturing to Vietnam. I want to help Botswana grow - and I wish there were more countries in Africa I could name that seem to be on a good path (I cannot name the majority of countries in Africa, the ones I can are because they are in the news for bad things happening. I'm not even sure Botswana - I mostly know about them because last time I brought up Africa someone from there said their country was an exception).
Overall the world is better off with a lot of trade. Comparative advantage is real. There are things I can do that I don't want to become good at. However we also need to be aware that not everyone in the world is the friend of freedom and some must be cut off lest they grow. Nobody is perfect though, so you can't cut off everyone.
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Yeah, there's no painless answer. China is not a democracy. They can force millions of people to endure terrible working conditions, pollution, corruption, and abuse, and take a very long view. The US can't do this.
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>What would you do to act against this?
Bloc building. Europe has countries which do lots of manufacturing. Use those to gradually reduce reliance on China by slowly restricting Chinese access to the Bloc market and build up supply chains inside the Bloc.
Making everything in the US can not be done without a very severe decline in living standards.
>Is doing nothing acceptable?
How high is your desire to learn Chinese?
Under normal circumstances, when a country is running a massive surplus, their currency should appreciate, weakening their exports and thus recalibrating trade balance back to zero. That isn't happening right now, because China (and other surplus nations like Germany and Japan) relies on buying massive amounts of US treasuries to weaken the Yuan. That's one of the reasons why the US dollar is the reserve currency. It has to be, because only the US has an economy large enough to provide high-yield, low-risk treasuries and is willing to do so.
Trump's tariffs would theoretically rebalance trade on the long term, albeit in a highly destructive manner. But the more diplomatic solutions as proposed by other commentators like Catherine Tai, Yanis Varoufakis or Michael Pettis would be the introduction of capital controls to stem the demand for US treasuries, or better, the reintroduction of Keynes' proposal of the International Clearing Union back in 1945. The ICU's role would be to actively balance global trade surpluses via the international currency bancor, of which would have fixed control of FX rates rather than relying on FX markets to punish surplus nations and help deficit nations respectively. As for nations outside the Union, they would just get treated similar to the USSR.
I think they should want to do something - it's just that torpedoing your ties with your closest allies and trade partners then lighting the stock market on fire is maybe not that thing. China spent decades building up their supply chains, infrastructure and manufacturing capacity and had support for this at state level.
If the US sees it as a threat and wants to do something it should maybe look to what China has done. Because tbh what Trump did re Tariffs is pretty close to "nothing" all things considered.
They won't though because as soon as you have someone saying "look, let's just put together a staged plan so that in, say, five years we'll produce X% more electronics domestically..." you'll have a Republican shrieking about "five year plans" and how the USA is becoming communist
A great analyst once taught me the response question: "yes, and so what?" What's so magic about manufacturing as opposed to all the higher value work of the US economy? Have people not noticed that the average American is still richer than the average Chinese person by a long way, and (yes, painfully) more so than the average European?
If you're going to talk wars, then .. US military manufacturing is still the world leader yet again. Plus the nukes.
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> I'm surprised that the administration didn't understand this.
Curious why you are surprised at incompetence being unable to understand complexity.
The thing is the US already experienced Trump 1.0, so it was presumably easy for many to assume that Trump 2.0 would follow broadly the same pattern and that there'd be an "adult in the room" somewhere to say "this will crash the world economy and do three consecutive 9/11s worth of damage to the stock market". So even though there are some very silly people in very high places saying some very wild things, the assumption for many is that there's someone there to manage the chaos and minimise the stupidity.
This has been a pretty sobering reminder to anyone that, in fact, there is no such thing.
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Fair point. :/
My friend is watching his business get ready to die. His wife is still the CEO, and she's losing her shit. They're not alone. There's thousands and thousands of similar operations, all over the US, that will have to shut down, if something doesn't give.
I guess the mega-rich oligarchs think this is great, but they don't employ the majority of Americans.
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Some did understand it I think (maybe not Trump), but were tired of hearing it couldn't be done and decided to try. A large % of Americans are happy at least someone is trying, and at the very least perhaps some lessons will be learned, and the parties will recalibrate their policy platforms to actually accomplish reshoring.
That's the optimistic POV at least imo.
I work for a US startup manufacturing (as much as is feasible) in the US.
Because of the embarrassment that is meant to be our government, DoE hasn't paid for a contract completed in December (including physical goods), and DoD has silently stopped all of the R&D contracts we've been applying for.
We're about a week or three away from bankruptcy.
Our only foreign vendors are for PCBs and a particular type of motor. US PCB fabs are and have always been vastly more expensive and really don't do small scale runs at any sort of reasonable price. The motors? No one makes them domestically.
I'd gripe more, but this administration simply doesn't care about little guys like us. US small business are going to start dropping like flies soon.
America?
No.
The shareholder class underestimates it.
A lot of Americans realize that it's going to be hard, which is why we should have made an example out of the first guy to profit off of sending manufacturing off to the shores of a geopolitical rival.
Question: if the jobs were off shored, but the resulting profits were shared more equally, would Americans still complain?
Yes, definitely yes.
America suffers from a flattened income curve. There are many many more people earning $100k+ today than in 1960 (inflation adjusted). America has an envy problem first, equality problem second, spoiled child problem third.
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I wouldn't expect "now that you've caught us we'll pay you to shut up" to go over well.
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Americans also have more free time and disposable income because of that decision, among others. Why would you want them to struggle more?
The people in the areas where things used to be made certainly have more free time, but they don't have disposable income.
Unless we're just here to repeat canards from the 1990s given by financiers which explained why it was good to shut down the main employers for entire towns.
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Still, this kind of outsourcing of manufacturing (or even more food production) puts the US in an incredibly uncomfortable position, especially that China is its main geopolitical enemy.
What if a war erupts? Suddenly the US cannot produce a lot of essential stuff - I think Covid was a good example of that happening.
Of course the question is can this be done and what will be the price if so.
What if a war erupts?
I believe we should scale up manufacturing in the US for different reasons.
But I'm also a realist. If war erupts between China and the US, then anyone in the US or China still alive 4 weeks after the start of hostilities will have more pressing concerns than worrying about where things are manufactured. Again, just the reality.
We shouldn't plan on the basis of end of the world scenarios. Rather we should plan on the assumption that we want to confer maximum benefit on the US in likely non-apocalyptic future timelines.
> But I'm also a realist.
A realist would prepare for the worst
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The author is not anti-US-manufacturing. He explained how the current tariff policy undermines US manufacturers. He is pointing out the obstacles and what we must do to overcome them. The obstacle is the way.
I wouldn't say he is anti-manufacturing but more that he takes a defeatist view.
Two of his points: "Industrial supply chain is weak" and "We don't know how to make it" are exactly the same. >all the factories which make the needed components are in Asia, >because they know how to make the best semiconductors in the world.
But this is looking at the problem and then missing the point: If I decide to start mfg. IPhone in the US, I can't because there are no suppliers.
As long as nothing changes, there will continue to be no suppliers.
If I HAVE to mfg the IPhone in the US, at first I will import due to no supplier but someone will make a local supplier because they can undercut my importer.
Subsidize the essentials let the free market sort the rest. I think we still want competitive markets within our borders for the stuff we subsidize so we don't get stagnation of the industry. Maybe there are clues how it could be structured like we subsidize farming.
Last time I looked the US was a net exporter of agricultural products to China. Well, until the retaliatory tariffs hit.
Food, airplanes, tech IP (eg software, phone designs) are the main exports of the USA to China.
it's like they believe building is as quick as destroying. almost like they think delete can be ctrl+z'ed back into undeleted very quickly
a generation of kids that never lost all their work because they didn't hit ctrl+s at the correct moment is now trying to run things
Weird take, since most of the people still in charge are old boomers who've barely even learned to use a computer.
I think the main point stands, though, which is that you can't undo to the previous state. E.g., rolling back all tariffs/deportations/firings/budget cuts would not undo the damage done.
Some very old kids, yeah. With a almost baby-like understanding of the world.
The state of the art is literally a half century beyond where american manufacturing was when it died. Anecdotally according to older family members who had those old manufacturing jobs, they were working at companies doing stuff like bending a steel rod at the end and then shipping it off to a sub contractor. This was not glamorous work. Most of them got into it because you don’t need to speak english to bend a pipe in a factory. And they did everything in their power to ensure the next generation would not have to work those sorts of jobs.
I think most people have a very confused understanding of money(currency) and value. Workers produce value, not money. Workers get a cut of that value, which is converted to money. To get by comfortably in the US, a first world developed economy, you need to be producing a lot of value. Everything is made to accommodate high value workers.
Producing t-shirts, window fans, or toilet brushes is not high value work. The slice of value available to convert to currency for the worker is very tiny. So you end up having to play games with the economy which inevitably will blow up in someone's face. $60 t-shirts so we can pretend that the value in a t-shirt is much more than it is, so we artificially make t-shirt manufacturing competitive with, say, automobile manufacturing.
I somewhat agree with your point, but it’s also important to include the other side of that pricing.
If it actually costs $60 (really more like $25 for made-in-America t-shirts I’ve bought) to make a t-shirt, with environmental regulations and human costs accounted for, then isn’t that the actual cost of a t-shirt? And they were artificially cheap at $10 for imported ones due to ignoring externalities? In that case, producing these simple products is actually a bit more valuable than you suggest.
> isn’t that the actual cost of a t-shirt? And they were artificially cheap at $10
Maybe a part of the $15 difference is in marketing.
You are missing something: quantity. A toilet brush itself is low value, but the US needs 30 million per year (this is a guess, but it seems reasonable enough - every person buys one every 10 years, which seems right based on how long they last. I am likely off, but probably not by an order of magnitude so let us use that number for discussion unless/until someone really wants to find a better number). If you can make/sell a million brushes per year with a gross profit of $1 on each that is a million dollars, if labor and the machines are amortize to $.50 each you net profit is then $500k/year - many small company CEOs would be happy with that.
You can run the numbers many different ways, but the important point is low value production is always about volume.
I disagree with this. Everybody wears clothes. Everybody eats food.
You can't put a monetary value on a t-shirt, because people will buy them anyways. Who is to say that t-shirts aren't $60? People only think that t-shirts are "low value" because we have offshored the labor and are used to very low prices. Meanwhile I bet most Americans can't even sew.
now do marx's labor theory of value
I am by no means an export on manufacturing, nor international trade, economics, or virtually anything relevant to manufacturing. Just a layman here.
Observationally I fear there is a lack of nuance in discussing "bringing back manufacturing" (really re-expanding) to the U.S.
I fear the lack of nuance is due to bias based on not liking the guy in the red tie or the other guy that's in a blue tie so there's just blinders about whether or not a particular policy will achieve a particular stated goal.
The next thing I see is it just lumping manufacturing all into one bucket.
Take manufacturing smartphones. Because the U.S. doesn't assemble iPhones the U.S. appears to be bad at manufacturing? No, I think it's just not good at assembling iPhones.
Just looking at numbers, sure the U.S. steel production is dwarfed by China but globally it's still a major producer. And there's no discussion of quality.
Look at oil & gas. I'm pretty sure the U.S. both produces the raw material and refined product at a significant amount globally.
Plastic manufacturing. I toured a bottle manufacturing plant last summer. It's primary a customer was Limited Brands (Victoria Secret)
It built molds. It upgraded factory equipment roughly every 8 years (increasing production & reducing labor costs). Why was it able to manufacturer bottles in the U.S. even it's selling at a higher price? Because it's primary customer was essentially down the street. That is, apparently the cost to not import across the globe more than offset the cost to manufacture here.
I understand that's just an example and I'm trusting the information from that company was reliable.
But first I think we need to be honest about how much manufacturing is here and what type. Then discuss which policies are likely to achieve goals we may have in mind.
I think there's merit to manufacturing semiconductors and batteries here. But we need to also be aware that while manufacturing may bring jobs, an increasing amount of labor will be automated.
Yes, there's little nuance. I see so many people saying it will be hard to bring back manufacturing jobs, or "we can't go back to the 50s," and then they just stop as if that settles the argument. The implication, which they never say out loud, is that we shouldn't even try, just accept things as they are. Just be the Big Consumer until someday the rest of the world doesn't want our dollars anymore, and then what?
Seems much better to look seriously at the manufacturing we still have (as you say, it's considerable), where we can expand on that, and where we're lacking and need to rebuild.
We also need to look at what manufacturing we want. That is why the military needs keep coming up - in case of war we are unlikely to be able to get things from China so we better have a different source (though the source need not be in the US - Canada should be just as good so long as we can keep Canada our friends - same with the EU).
Once the military needs are met, I don't care what we make, just that we need good jobs for people who are not able to handle more complex jobs.
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>There are over a billion people in China making stuff.
There surely can't over a billion factory workers in a population of 1.4 billion. I looked up a population pyramid, and let's say 100% of the population aged 15-64 is employed at a factory job, that's ~70% of the population which is only 985 million people.
America does not have to bring manufacturing back. It has to devote resources to robotics and AI to replace workers to make products for itself and it's people.
The transition period is currently already underway due to the tariffs. An unintented consequences is that the big players in commerce(Nike, All Big brand names...) no longer have a monopoly due to China relaxing the regulation on it's factories to disclose for which brands they manufacture products.
Now that the everyday person knows that they can also buy products from the same factories at a fraction of what they used to pay. They will do that. So the middleman will slowly fade out unless they can compete with... Robotics and AI.
The other consequences of the shift in this consumption dynamic is that it behaves in a downward fashion on inflation. People's incomes did not increase but they can now purchase more with their incomes. Jackets that used to be advertised as 200/300/400 dollars now can be bought for $20/$30 directly from the middlemen in China and get shipped to the US since they are under the $800 dollar limit.
This is actually a win win for all US residents. Enjoy it while it lasts.
Isn't manufacturing mostly a red herring? Sure some select people who are currently in Washington might care about it from a geopolitical angle, but the electorate is not lamenting the lack of manufacturing jobs, but rather their decreased share of the proceeds of the no.1 national economy in the world. Even if you bring all manufacturing back, I doubt those same people will be happy working in those factories.
Exactly, especially in the conditions workers in other countries tolerate. It's the wrong solution to income inequity.
No kidding!
Beyond the obvious skilled labor there’s supply chain network, maintenance, townships and supporting system around them.
And all of this needs human labor which is taken from somewhere else. How do you incentivize them? Just throwing money at the problem won’t solve it either. Because more often than not it’ll attract charlatans who will promise the sky, take the money and move away.
And do not forget NIMBY :)
Where I live it is close to impossible to even get a Dog House approved and built.
Exactly!
The regulatory apparatus has to be rewired.
And then what happens when a new administration comes along 4-8 years down the line and decides to abandon some of those initiatives?
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Americans have a very 1980s idea of manufacturing (and China in general) in that there aren't actually that many humans being used in Chinese factories let alone the American ones some of them want to build here. There's even a concept of, "Dark Factories" in China which are 100% automated factories that operate in the dark. The only jobs that will come from bringing manufacturing back to the states will be in automation, robotics, AI, and roles to support those things.
Given the all the minimum wage staffing at most distribution centers these days despite all this off the shelf robotics technology seemingly available on order and already proven, makes me thing the american worker is cheaper than we might suspect compared to building out these dark amazon warehouses.
A business I work with has a factory in China that produces their devices. They absolutely do most of the assembly manually, as many of their sister factories do.
Robotics automation is a tradeoff to gain efficiency at the expense of flexibility, with a large upfront cost.
Well, even a better argument to bring those factories to the US. Why not develop the know-how on manufacturing and improve automation in the US rather have China lead there.
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>The only jobs that will come from bringing manufacturing back to the states will be in automation, robotics, AI, and roles to support those things.
You're saying it like it's a bad thing.
Wouldn't it be better we have automation in the west, instead of sweat shops in the east?
> It’s years of accumulated skill, but it’s also a culture that is oriented around hard work and education that the United States no longer has.
Sounds more like China has an exploited educated class/lack of oppurtunity than America has bad education.
Plenty of American workers can multiply in their heads and diligently perform there work. These people work in white collar jobs though, not in factories snapping together phone cases for 12 hours a day.
The author isn't totally wrong here, Americas bottom tier labor pool sucks, but they miss the bigger picture when comparing Chinese and American workers. China has skilled workers doing unskilled work. That's why they are so good. That's also why bringing manufacturing to the US will be so hard. Ain't nobody wanna get a degree so they can work a hot factory floor all day.
Westerners have had too good of a life and you cannot compete with an asian who is told every day if he doesn't perform he will be homeless. You just cannot compete.
> Westerners have had too good of a life
You're not going to sell the electorate on ".. and so we're going to make your life worse to compete with China", though.
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Combined with his point 8 about work conditions, the exploitation seems willful.
Factories can be air conditioned.
America doesn't underestimate it, its president does.
For better or worse the man is exposing the mindboggling scale of deindustrialization that was hidden underneath America's transition to a "knowledge economy". Decades of failed economic policy has led America to this point.
Unfortunately, that ship sailed a long time ago. Why is no one in the administration paying any attention to the outsourcing of high skill knowledge work to India and elsewhere? Obviously I have a bias working in technology, but it seems to me to be a much more CURRENT issue and one that can actually be addressed in the present.
That job retraining is going to happen ANY DAY NOW I tell you, and then those textile workers are going to be so glad that they can be call center workers.
I saw a chart passing around from this Cato Institute survey (Cato is a right wing think tank) [0]. It made me laugh.
> America would be better off if more Americans works in manufacturing than they do today. Agree 80%/Disagree 20%
> I would be better off if I worked in a factory instead of my current field of work. Agree 25%/Disagree 73%
[0] https://www.cato.org/sites/cato.org/files/2024-08/Globalizat...
Those two are not in conflict. The claim is 20-25% of the population would be better off if they moved to a manufacturing job. The other 75-80% are better off where they are, but making the bottom better makes everyone better.
They're going to end up with some sort of corvee forced labour scheme enforced by ICE, the logical conclusion of "other people should go work in the factories".
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The litigiousness point should have been at the top of the list. You can build roadways, but if you constantly have stories in the news of people striking it rich by suing someone, and half the billboards you see in your town is of people telling you they'll help you do it, then it's going to be extremely expensive to employ folks.
It'll be easier to teach folks hard work, it's very difficult to change a culture when 1. A huge sector of our legal system geared towards it 2. People can easily get rich off of it.
These are all good points, but I’ll add a different take here.
The points are correct but rather than bring “all manufacturing back”, the goal should be to aim for an 80:20 or 70:30. And it will still take decades, but at least with a far better chance of success.
For companies that rely on a global supply chain, manufacturing and even raw materials should aim for mostly global but a guaranteed 20 to 30% local.
It’s one way to offset a real market problem, where unchecked market forces drives all production offshore or “nearshore; leaving the nation vulnerable to supply chain disruptions.
For essentials like grains, I’d even argue that the nation should opt for an 70:30. It’d be insane for us to offshore the majority of production.
I don't think anyone underestimates that, as much as some people with the author's viewpoints would like it to be true.
To paraphrase Kennedy: "We choose to [bring back manufacturing]. We choose to [bring back manufacturing] in this [or the next] decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too."
We will do it, and we will win, whatever that means.
> To paraphrase Kennedy
What in the modern situation suggests the comparable level of diligence in approach to the goal? The fact that both goals are far-reaching does not suggest comparability of approaches to the solution.
Changing the way society/economy operates is nowhere near "building X," whatever X is, whether it's something hard like a bomb or a collider.
> We will do it, and we will win, whatever that means.
How do you know that you haven't won already? Shouldn't the end goal be clear? In the case of Kennedy you're referring to, criteria and motivation were clear.
--
To a non-US bystander, your comment sounds like a no-thinking patriotic slogan. The details of the article are such that you can take any argument and bring it into discussion in order to show its irrelevance. But we're discussing slogans irrelevant to the situation and belief in the win, even though the win is not defined.
How many additional hours are Americans going to work? What pay cuts will they take? How many years later du they want to retire?
These are the questions people need to ask themselves. We both know what the answer is.
Americans need to take pay cuts so we can bring back high-paying manufacturing jobs!
/sarcasm, or summary of other discourse in this thread?
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Putting aside the rah-rah patriotism, you perhaps don't understand the problem any better than Trump does. The moon mission to which you allude was difficult but, critically, that difficulty was not felt by most Americans: it was a challenge for NASA engineers. Trump's current economic plan will increase inflation, cripple America's role in world trade, and result in negligible increase in manufacturing in the short term. Wildly unpopular policies do not last in a democracy.
Did you read the article? The author is advocating for manufacturing in the US, but is pointing out the ways these policies undermine that very goal.
It's easy to bring manufacturing back, just give it a decade or two, but impossible to make it internationally competitive without large-scale market regulation such as tariffs or handing out government subsidies.
This view is too trivial. You could also stimulate manufacturing by promising tariffs increasing over the next X years, while not taxing the imported building materials and machines for longer. Or you could use tariffs to both break trade and make the environment too expensive and uncertain to invest in large construction - and delay the process by a few extra years.
I don't see how this is a reply to my point. Building up manufacturing takes a decade or longer (putting the problem aside that there aren't going to be enough workers). Tariffs are heavy market regulation. Even if manufacturing was brought back successfully, the production costs would be too high without such heavy market regulation.
You seem to assume that once manufacturing has been brought back it would somehow be internationally competitive. I don't see how that's possible.
Maybe I didn't get your point.
My problem with large-scale market regulation is that it also increases the price of inputs for companies who would otherwise be interested in building a factory in the US. Do you have a solution for that?
Inputs are cheaper (and thus have lower tariffs in an absolute sense) than outputs. I think the author underestimates the ability of the market to adapt to incentives.
They're still correct though that there are plenty of good reasons why we don't do manufacturing in the US right now, and tariffs do absolutely nothing to change that reality, they just artificially make the alternative worse at significant expense to consumers.
I feel misunderstood. I'm definitely not advocating for tariffs. The point is that even if this strategy worked for bringing manufacturing back (it won't in general and widespread because of labor shortage), it would result in products that are not going to be internationally competitive.
Why would you incentivize foreign companies to do that, when you want American companies to build factories in US?
I prefer the alternative explain: this is just trump bringing in a national sales tax without having to go through the senate or eat the unpopularity.
There seems to be no actual plan to actually bring back manufacturing (this would require different tariffs, loans, tax accounting rules, etc). And there seems to be no targeting of china (everywhere is being tariffed, allies and enemies, strategic suppliers and places with no trade with the USA etc)
Like OP, I work in manufacturing (after 15 years in startup land). I'm not as experienced as him, but I work in manufacturing that makes similar products on both sides of the US/Mexico border.
Let me add some thoughts:
1) Capacity, not cost, is the main driver for nearshoring. All things being equal, a manufacturer would rather produce a product in the US than overseas. The cost of modern products is mostly parts & material, not labor. When you add logistcs expenses, the theoretical cost advantage of overseas vs local is not that great. Remember:the people on the other side of the border are capitalists too! They want to keep most of the surplus of nearshoring to themselves! The problem is that there simply is no capacity, both in facilities and especially in people.
2) What matters even more than capacity is the first derivative of capacity. In other words: how quickly can I spin up a new factory if I win a big deal? How quickly can I spin one down if the client goes away? How long will it take me to get a permit to connect my new factory to the highway? In the US, these costs and timelines are massive. Real estate, permitting, hiring. There is an order of magnitude difference here, in cost and time.
3) The labor problems are real. I don't want to disparage the american workers I work with, because they are amazing. Truly fantastic craftsmen. But they are hard to find. You'd be surprised how many people show up who can't read or can't read a tape measure. How hard it is to find people that want to work 8 hours a day, 5 days a week. By contrast, in our overseas facility we have qualified workers literally showing up at our gate every day asking for work.
In other words, the root cause problems with american manufacturing are—-surprise surprise!--the same problems as with other parts of the US that are in decay:
- Disfunctional local government, especially around permitting, construction, housing and transit
- Disfunctional education & healthcare systems.
- A lack of strategic investment in infrastructure (rail, highways)
- A social safety net that is totally out of whack, with a high cost burden for employers & employees, with little to no immediate quality-of-life benefits for the working population
Tariffs solve exactly zero of those probems!
The cost of manufacturing your stuff is not labor dependent only because you are probably putting together low cost components made with cheap labor. What if you had to make the spring or the resistor or the little painted metal box? Could you do that without labor being the big cost?
I actually make pretty high cost products with relatively expensive labor (welders, electricians).
Even then, materials & parts dominate.
What? How much labor do you think goes into making a spring or a resistor? These are parts which cost fractions of a cent and are cranked out by the tens of millions.
Building up manufacturing has always been a period of pain for the population. There is so much to learn and so much hard work to do with, at least initially, so little gain.
Competition is extremely high initially, products will be ridiculed for being expensive and low quality. Companies will fail and go bankrupt, workers will suffer from that.
"Bringing manufacturing back" is a path of pain, not a way to fast economic success. There is no way to change that, tariffs will certainly not change it. Are Americans ready to leave their office job and work overtime in factories and engineering departments? No, automation will not do this for you, you are competing with a country which knows far more about automation than you do. To compete with them you need to be better and cheaper.
Lastly look how Germany struggles, right now. Their industry is in large parts starting to loose any competitive edge and will continue to do, unless very significant cuts are made somewhere. You can not keep the same living standards while someone is doing twice your work for half your costs.
To build assembly lines, one has to first make custom tools, jigs, and parts and apply processes to them that cannot just be 3D printed in plastic or metal or FDM'ed.
The main show-stopper to them is the lack of working knowledge about precision tooling manufacturing.
For example, some of the best power machine tools in the world came from Germany and from Bridgeport, CT between 1910 and 1965. There are/were moderately large, 1 micron runout milling machines such as Moore No. 2 and No. 3. These things generally aren't made anymore and not many people know the tricks and processes to make similar or equivalent machines that make other tools and machines. Like that the unshielded body heat of an operator can swing the runout of a precision machine in an otherwise climate-controlled environment.
Could anyone clarify what the author means regarding duty drawback? He writes:
"There is no duty drawback for exporting. In the past, even in the United States, if you imported something and then exported it, the tariff you paid on the import would be refunded to you. They got rid of that..."
My understanding was that duty drawback—where import duties are refunded if the imported items or their components are later exported—is still broadly available in the U.S., though with certain exceptions (like steel/aluminum tariffs under Section 232 or trade within USMCA countries).
Is he referring specifically to recent tariff changes or targeted exceptions rather than a general elimination? Or has there been a broader policy shift I'm missing?
Made in China is the result of meticulous division of labor across various industries in Chinese society, gradually built up over 30-40 years. If Americans decided to abandon their current lifestyle and start building from scratch, perhaps they could. But who would give it up?
I'd say 60 years. As you implied one can't just dismiss the heartbreaking necessity of the CuRev
Even after considering the alternate pathway called ROC[tm]-- after all you may argue Morris Chang et al gave up lifestyles-- & I hear Rationalistic Daoism is having a resurgence on the mainland (vs Confucianism)--
It's difficult but necessary to bring manufacturing back due to defense logistical reasons.
We build about 100 SM-6 missiles a year. How long does this last against a peer? 12 hours?
I don't know if tariffs are the best way to do this but some manufacturing must come back one way or another.
Tariffs work against the goal.
The only sane way to bring back manufacturing is investments like the chips act.
Think about it this way, you are a widget manufacturer trying to place a new factory. You could put it in say Canada and enjoy cheap imports and exports of your product globally. It's cheap to produce and easy to sell.
Or you could place it in the US, but now you are looking at a minimum 10% tax on importing the resources you need. On top of that, a significant portion of the world (especially the richest nations) are tacking on an addition 10% or more tax on your product because it came from the US.
Would you build a factory in the US? Maybe if you can source everything in the US and you are fine with your primary market being only the US. Otherwise, it's a bad business move.
When talking about something like semiconductors, global access is really important to be profitable. Low or no tariffs and the proximity to China and other raw resources powerhouses is a major reason why so much of the semiconductor industry is in Asia.
>We don’t have the infrastructure to manufacture
It is really that hard. Look what happened in Arizona. TSCM brought the most complex semiconductor chip making supply chains to the US on a vacant piece of land in NW Phoenix in about 4 years. And it wasn't just TSMC that invested in the Arizona site, but also companies like Linde ($600M), APS ($100M), Sunlit Chemical ($100M), Air Liquide ($60M), and Chang Chun ($300M).
Maybe others can comment, but are semiconductor chips the most complex thing to manufacture in the world? Not sure but the Arizona TSMC supply chain proves it can be done.
> And if we want to apply tariffs, do it slowly. Instead of saying that products will be tariffed at 100% tomorrow, say they’ll be 25% next year, 50% after that, 75% after that, and 100% in year four. And then make it a law instead of a presidential decree
This is the big difference between a tariff regime that is credible in such a way that the business community can plan investment around it, and the current one that has mostly just caused chaos and confusion.
There are plenty of people saying these tariffs will not work.
But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.
How we get that level of prosperity back? That's the people really want. Tariffs are simply a means to that end.
I wish people would stop writing articles about 100% criticizing tariffs and instead write articles 50% about criticizing tariffs and 50% brainstorming alternative solutions to achieve the same objective.
> There are plenty of people saying these tariffs will not work.
Work to do what?
> But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.
Why do you think this has anything to do with tariffs or manufacturing?
> How do we get that level of prosperity back?
Better pay for the jobs people actually work. Reducing inequality by preventing the richest 0.1% from capturing all the massive gains in wealth the US has seen over the past few decades. Removing regulations that prevent the country from building housing and therefore driving up housing costs. Switching to a healthcare model in nearly any of the comparable developed countries almost all of which deliver better healthcare at half the cost. Not expecting everyone to be able to live a completely unsustainable suburban life. Having the government support children's upbringing by paying for high quality education, instituting rules and regulations that require mandatory paid maternity/paternity leave, etc.
Lost of poorer countries manage to do this and more just fine. The US is far richer than most of those countries.
Very little of this has to do with manufacturing jobs falling from 18mm to 13mm.
> Work to do what?
Bring back manufacturing, and make the US economy work better for workers.
> Why do you think this has anything to do with tariffs or manufacturing?
Because usually the best-paying jobs were in factories, especially if you didn't have a college degree. A lot of towns in the Rust Belt were economically dependent on a local factory -- think cars or steelmaking. Often, part of the reason these factories were so high paying is because the jobs were unionized.
Companies moved overseas to save money on that expensive labor.
Now, companies have all the negotiation leverage. "If you unionize / demand higher pay, we'll move operations overseas" is a real and credible threat, as countless companies have already done it.
Tariffs are supposed to make operating overseas more expensive. Undo the economic justification for moving the jobs overseas and they will come back.
This takes away the companies' negotiation leverage. The "If you unionize / demand higher pay, we'll move operations overseas" threat isn't credible if everyone knows overseas manufacturing is super expensive due to tariffs.
I grew up in the Rust Belt and I'm old enough to properly remember when some of those factories were still operating. I saw with my own eyes what used to be a respectable blue-collar community decay into an economic wasteland. The drugs are getting bad. A lot of people have lost hope. Young ambitious folks see no reason to stay here.
The problem and its underlying factors are so obvious to me that I'm constantly amazed to see well-informed, intelligent people who don't seem to understand it.
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We don't. We need only take a look at Detroit, holdout of American manufacturing. They have been automating and robotizing everything they can. ["... However, the Federal Reserve Bank of St. Louis notes that motor vehicle manufacturing employment declined 17% from 1994 to 2018, while motor vehicle productivity increased by about 13% over the same period..."] If manufacturing does come back to the US, it won't create very many jobs. Mostly just the people to maintain and fix the machinery.
Given the improvements in cameras and computer vision and AI and robotics, there is no reason to think this won't accelerate. A long long time ago, labor was cheap and resources were expensive. Today, the opposite is true. Keynes predicted in the 50s that we would be working 15 hour work weeks. The reason he was "wrong" was that he underestimated our insatiable human greed. We all want more. Average house size in the 50s was < 1200 sq ft. Today it is 2400+. Each kid must have their own room that is 12x12!! (I grew up with 4 boys in a 10x10, lol). Each kid must get a new $200 bat each year for little league, etc. We want a higher standard of living for ourselves and our kids. This is understandable but we forget our role in the never ending chase.
> How we get that level of prosperity back?
It’s so simple it hurts. Stop the ruling class hoarding all the wealth.
Top tax bracket used to be 94%.
Have a VERY steep wealth tax, an inheritance tax and whatever else is needed. The fact individuals exist with many hundreds of millions of dollars while so many in the same society are struggling so bad is a disgrace.
oh that can be done in 3 easy steps.
1. win a world war that destroys the economy of every other country in the world for a decade.
2. destroy about the past 50 years of technology and all knowledge of how manufacture it.
3. Kill 90% of people over retirement age to lower demand for housing, healthcare costs, and retirement benefits.
In the modern world with modern technology there's a lot less productive work out there for people without specialized education. We could do a better job of training more people for trades jobs (e.g. plumbers, electricians etc), and removing college requirements from some professions (e.g. med school and law school could probably be college level education rather than post college) but anyone saying that we're going back is just lying.
> But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.
> How do we get that level of prosperity back?
The issue is that this is a false premise. The house sucked. Only 1/3rd of American families had a single car at the time, and the cars sucked. We can go on and on about everything else. Not to mention the social environment at the time sucked.
That doesn't mean we shouldn't try to do something about the issues Americans face. But tariffs with a shifting set of sanewashed justifications are just Not It.
Why will a factory job will pay enough for one person to raise a family and buy a house on a single income?
Like what is unique about factory work that allows for this? I’ve heard stuff like this so much and I just do not believe it. Is anyone working in a factory in the USA today able to buy a home and have a stay at home spouse on a single income?
When I was studying economics, my macro professor used to belabor the point that post-WW2 US socioeconomics was a highly unique (and special) time-and-place; and, it is a mistake to generalize economic theory from that time-and-place.
So... here goes: rather than proclaiming a "housing crisis", maybe we're seeing the end of an exceptional period of "housing affordability". (A similar analysis of Europe and Asia applies, piecemeal.)
As such, if we want to re-enter into a new period of housing affordability, we need to ask ourselves what we plan to give up and/or trade for that?
For WW2, it was millions of lives and worldwide devastation. It seems like we'd need a complete re-evaluation of the way wealth, family structures, and social safety nets work in order to vastly expand housing. (In the US.)
Maybe if we stopped viewing housing as an investment vehicle, with the expectation that house prices are going to rise forever then you would see affordable housing.
https://www.cbsnews.com/news/how-much-will-home-equity-level...
The last time that I know of housing losing values was 2008 before that, it was 1991
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I think it's a complicated equation and there may be room for some strategic tariffs, de-regulation, anti-dumping, competing more on manufacturing etc. But the time you're talking about? Almost the entire world's industrial capacity was decimated other than the US.
>How we get that level of prosperity back?
By making everyone poorer. Seriously.
You are competing with your fellow citizens for those things. This was true even back then.
Right now, today, it has never been easier to make a lot of money working. So you need to compete with people in that environment. You need to be able to outbid those people for that beautiful home you want. In an environment of lots of educated and skilled workers getting skilled salaries for doing vary valuable work. That's where the bar is.
We can lower the bar back to blue-collar-high-school-diploma, but then we need to also sacrifice all those high earning college degree jobs.
Not going to happen.
> How we get that level of prosperity back? That's the people really want.
And something they're not going to get. Manufacturing is going to be heavily automated. The money is going to continue to funnel into a small portion of the population.
> used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.
When was that last really true? 1971?
People literally do just that today in the midwest. The coastal housing imbalance is just that a housing imbalance and not reflective of a lack of buying power today. Also consider that americans back then outside of the car and home had no other large purchases. No computer, no $1k phone on a $1k/yr plan, no big tv. People weren’t even eating out or flying back then when they could afford a family vacation.
> americans back then outside of the car and home had no other large purchases. No computer, no $1k phone on a $1k/yr plan, no big tv. People weren’t even eating out or flying back then when they could afford a family vacation.
Back then cars and homes and essentials were relatively cheap and TVs and flying were expensive. Today it's flipped. TVs are cheap, phones are cheap. Essentials, like housing, are expensive.
https://www.youtube.com/shorts/en_VpZtUFcE
How much do you think a house costs, vs how much do you think a TV costs?
And perhaps more importantly, do you have any idea what rent currently is costing? As a fraction of median income?
This is an avocado toast argument.
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America is not a country, it's a continent. I know, Canada will be a province, and soon Panama of course, but in the meanwhile, it's a continent, not a country.
If you search a dictionary for "America", the first result will likely be "The United States of America".
https://dictionary.cambridge.org/dictionary/english/america
It doesn't make you wrong, but you're also not right.
But famous American themselves call their country "America".
We offshored manufacturing for profit. We are now offshoring brainpower. Manufacturing will only come back in the form of intelligent robots .
It really is starting to bother me when people attribute a deceptive narrative crafted by one individual to "American thinking" as if there was even a lone individual in this country who was earnestly believing a global trade war would solve a non existent trade problem before the narrative became convenient to our dictator
I loved his writing style. Everything is simple, understandable, and to the point for the people like me who don;t know much about this topic.
> It may seem trivial to make that glass that separates your finger from the electronic engineering that powers your ability to access the internet, but it’s difficult.
Out of all examples one could pick, this is the worst, as Corning Gorilla glass is actually made in the USA (Kentucky), and used by all other manufacturers.
I had to stop reading at the Michael Jordan baseball part. Everything after that wasn't believable anymore. He wasn't that bad at baseball[1].
1. https://vendettasportsmedia.com/michael-jordan-wasnt-that-ba...
He wasn't that bad at baseball compared to a random person or a minor league player.
He was that bad at baseball compared how good he was a basketball.
The article seemed correct IMHO,
> What happened when he switched from basketball to baseball? He went from being an MVP champion to being a middling player in the minor leagues. 2 years later, he was back to playing basketball.
He was a mediocre AA player... compared to his basketball skill, he did absolutely suck at baseball.
This is an interesting read though I’m not an economist but even pick up that the author is wrong about some of these points. Still, I don’t think the author is an economist either. And a little harsh on US workers - but I know there are people really struggling in the US who need work and bring their problems with them.
What a mess this country is in.
Extremely well written!
I agree with just about everything in the blog post, except, the underlying Michael Jordan baseball analogy example. Does the analogy hold if we swap Michael Jordan for let's say... Bo Jackson? He really was very good at a number of sports before his hip injury.
meta observation; It is amusing to me that the comments on this site are majority "No, we are not smart enough to run a drill press. That takes years of training!" but back in 2020, every commenter was pretending they were doctors.
"America Underestimates the Difficulty of Bringing Manufacturing Back"
"America" doesn't underestimate or overestimate things. People do. So which American people underestimate the difficulty of bringing manufacturing back? Name names, or it didn't happen.
Basically [Inside Business China](https://www.youtube.com/@Inside_China_Business) in a blog post.
Even if you guys did rebuild e.g. textile factories down there in crazy land you're not going to pay workers $300/month to be able to compete globally. Nobody wants to pay $1,000 for a pair of underwear.
Tariffs don't help you compete globally -- they're about disadvantaging the global in favor of the local.
Someone may be able to pay workers $300/month and make them work the "996 working hour system"[1], but if they then have to mark up the end product by 100%, the disparity between local and global price to consumers narrows.
[1] https://en.wikipedia.org/wiki/996_working_hour_system
This is a case of taking away existing artificial barriers and let what people do their thing in the market. 5 and 10 year plans are only for economies run into the ground by an elite intelligentsia.
It is just a point of pragmatism. Countries that wish to bring manufacturing back to their country just have to use people to do that just like they used people to put the production outside. Which by the way will produce lot of business :)
Setting geopolitics aside, Russia was able to revive and ramp up domestic manufacturing after the sanctions. So this should be possible in the US.
I think it's a little early to hail Russia's war economy as a success story worth emulating.
The most fundamental problem in the U.S. is this: Infinite Growth Capitalism
The VAST majority of what is wrong with our society (political and obviously economic) can be traced to this. It's the expectation that every economic endeavor must show a return on investment - forever. That every entity must strive to optimize the bottom line every day of its existence. Optimizing for growth above all else crushes and consumes everything.
Increasing local manufacturing will only create more opportunities for people to be indentured to a company that literally hates their existence.
A company is forced to build here in the U.S. and people are supposed to rejoice they now have another option for their lives to simply be tolerated and disposable?
Pol Pot wanted his people to go back to agriculture society. Mao wanted his people to build steel smelters in their backyards…
Given what’s likely to happen with with AI and robotics over the next 10 years, all this debate about bringing back manufacturing jobs is pretty silly
There is no technological path to AGI, much less intelligent robots, in the next 10 years. Everyone underestimates the massive amount of parallel processing going on in a single human brain. That doesn't even consider how massive the sensor array is. The doublings required for our artificial technology to catch up is about 25-35 years, maybe more depending on how much Moore's Law slows down.
> The doublings required for our artificial technology to catch up is about 25-35 years, maybe more depending on how much Moore's Law slows down.
"A technology that is '20 years away' will be 20 years away indefinitely."
https://m.xkcd.com/678/
Our economy was designed to NOT have citizens work at factories. We pay thousands of dollars a year in our public schools to teach each of our citizens calculus, literature, world history, and physics, so that they DON'T have to work at a factory, or perform manual labor like picking strawberries or driving trucks or cleaning toilets.
Why would anyone want to go back to an economy that can be run by a third worlders? What is our competitive advantage then?
Economics works when the people do the things they are most efficient at. If a person in China can make iPhones for cheaper than an American, LET THEM. Our citizens should be designing them instead, because that's what we train our citizens to do.
Trump and the Republicans really do think of our citizens as third worlders performing manual labor like we were oxen.
Americans fantasize about factory work because, at that time in America, you could afford a home without a two-income family. Life was "easier" for many people.
Personally, I think we need to focus on making things like homes more affordable. This would go a long way toward alleviating people's feeling of being trapped.
> Life was "easier" for many people.
It's definitely less of a factor compared to money, but I can't help wonder if in addition to being able to afford stuff, it's the idea that there used to be a "default" path that carried some sort of dignity. Dirty jobs have never been outright glamorous, but there's still a kind of respect that American society confers upon "traditional" industrial work - think the classic image of the humble American coal miner, factory worker, or farmer. "It ain't much, but it's honest work." I think the thought is that however you did in school and in the upper-class-employment rat race, anyone could find a stable, respectable, long-term job - probably even get trained on the job - in an industry that really matters, that does useful stuff for the country.
Now? If you fail to jump through all the office-job hoops of picking a fancy field, getting a degree, finding internships, dressing up nice, keeping a clean record, acing job interviews, etc. Or if those fancy jobs just aren't hiring near you. What are the "default" job options most people are left with? Working retail at Walmart? Putting fries in the bag at McDonalds? Janitorial? Driving a truck? Doordashing burritos?
Obviously the main thing the lack of stability and decent pay in these jobs, but when it comes to public perception and fantasizing, like you said, I wonder if a part of it is just that these service sector jobs feel... shittier. Less important for society.
Because you cannot hide the imbalance of disconnecting yourself from the material reality that's involved with making your lifestyle possible by outsourcing to other human beings, over multiple decades, without it coming back to bite you in one form or another.
See the hundreds of thousands of people in US that have died from opioid overdoses. 50% of the US population, specifically those living outside major metro areas, experienced a slow collapse (over decades) that was not unlike the fall of the Soviet Union.
A country should have _some_ semblance of what it is to truly source, manufacture, and produce the lifestyle that's made possible in the country. When the top 15-20% become completely disconnected from the other 80% working menial service jobs because the core manufacturing has been outsourced to outside the country, it will come back to bite you.
"Man must feel the sweat on his own brow" or at least have an appreciation for what makes this possible. Your comment essentially implies that you feel that you are above or should be disconnected from this reality, which is dangerous.
You didn't explain exactly why we need that physical connection. You just broadly complained. Every one of your statements could be refuted by globalists saying its perfectly fine for foreigners to perform our manual labor for us instead.
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I think its more complicated than this. People don't want to work in factories per se, but what a world where labor has actual power. The big thing that offshoring did was strip the power of local labor to enforce certain reasonable conditions on employers and this allowed normal people to live stable, even comfortable lives.
Offshoring has produced a world where we can buy cheap trinkets but where many, many, americans live precariously, have little to no stability, and work more than one job to make ends meet. What Americans really want is more control over their lives and "bringing back manufacturing" is a sort of short-hand for that ideal.
I think bringing back some manufacturing may help, but in the end Americans need to learn that what they really want is more power to shape their lives and that they will need to wrest that power back from a system which has leaned ever more towards market control of the allocation of time, energy, and labor.
But how many citizens know calculus, literature and physics? Certainly not enough know history - or US democracy wouldn't be facing the threat it does now.
The poorly educated need a livelihood too. If the economy is healthier for global trade (I think it is), then some way must be found of destributing its benefits to the demographics who got hit. Otherwise you get revolution or populism.
Telling an unemployed factory worker to send their kids to college doesn't help. Doesn't help the factory worker, and doesn't help kids who see education and middle class jobs as about as unreal as the idea of becoming a famous influencer or kingpin drug dealer.
But aren't China's learning outcomes higher in calculus, physics, etc?
Also the US is already the 2nd largest manufacturer in the world.
There's a lot more to our education than that. Additionally, our REAL competitive advantage are our universities. We have the best universities in the world, by far, and that's what drives our economy over all others as we create the most valuable intellectual property.
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At its root I think this is driven by anxiety over how America would perform in a hot war, rose colored glasses culturally regarding the post WW2 era, and acknowledging that there's no real economic growth opportunity in America for unskilled labor, it's merely a way to tread water now.
going to have to give you kudos and steal that last part of "unskilled factory labour being a way to just tread water"
i didn't understand it myself until I developed a hardware system and computed the margins, hassle, etc - manual labor/assembly/mfg is not what a developed economy relies on and its asinine to pretend it is.
I don't know how the current American dynamism movement has picked up the steam it has
The problem with an exclusively intellectual economy is that it easily loses touch with reality entirely. You end up with generations of people who have no idea how anything works or how to actually make anything or do things in the real world.
Why does it cost us 10X more to build half as much? It's not all wage differences. It's that we don't have a large talent pool of builders. When you make things -- physical things in the real world -- you learn things about the nature of reality that cannot be learned from books or computers.
this is what i've been saying - critical manufacturing should of course be brought on shore but I don't understand the idea of bringing back "the assembly of hyper niche part that country Y can produce extremely cheaply but America can't even reasonably produce in quality" to American shores.
It literally harms industry because anyone relying on that hyper niche part now has to pay more (because American mfg, let's face it - is not efficient) and deal with subpar quality as opposed to higher quality foreign parts.
I hate it say it, but come on man - people aren't buying American cars globally because the Japanese and even Germans can do it better. That's free market economics, either get better at making cars or focus on making things that we can do better like iPhones and Macbooks - not try to artificially defend an industry we suck at by forcing people to deal with shittier subpar products.
Maybe I'm being unreasonable, I don't know.
The idea that everyone can just do knowledge work is pretty unrealistic, to put it mildly.
Yet, 40% of our students can't read at a basic level.
Manufacturing doesn't have to involve large amounts of low-skill manual labor. It can be highly automated and serve as a source of jobs for engineers.
To the contrary, they think of manual and “low-skill” labor as an essential undertaking that no person or society is above.
You are the one who thinks of the work as below you, that it should be moved out of sight so we can stop caring and make it someone else’s problem.
Everyone wants to think they're the most valuable thing in the world, but economics doesn't care about how much people value themselves. It only cares about when both buyer and seller agrees to the value of their work.
You may think a farm worker deserves $500,000,000 a year, but that won't matter until someone else decides to pay them that.
Ultimately, it's OK to say some things are more valuable than others, including the value of your labor.
>Economics works when the people do the things they are most efficient at.
If you believe this statement, then you must be supportive of open borders.
People in China might be more efficient at doing local US service jobs. Whose to say we dont let them do it?
Yes. Now people understand why open borders are a good thing.
Imagine how bad the US economy would be if we had tariffs and border controls between states.
> our citizens as third worlders performing manual labor like we were oxen.
Lord man... there's a whole mass of humanity who don't want to fart in an office chair all day, or lay around collecting the dole.
Typical coastalist ivory tower thinking. No wonder we're in a pickle...
And that is not working out…
What we have instead is a nation straddled with debt and useless degrees. While the counties like China do “theirs world” work produce smarter and more capable workforce all while doing the mundane work too.
I think your view also vastly underestimates the number of not so smart people that exist in America. This is no knock on them, but people in tech bubbles get to walk around in a society where the average person they interact with has a far above average IQ. So for those who don’t balance red/black trees and find shortest paths with dijkstra's algorithm need jobs too.
On top of that you forgot something I am sure you have yelled many times, diversity. Remember when it was a strength? It’s not good for any nation to be completely void of entire industries. Having factories next to the tech will germinate the thinking minds with new problems to solve.
But even more to the point. China is doing amazing things, and they were we let do the manufacturing. So we always have a strong evidence that letting others might not be the best idea.
And yet A&W campaign for 1/3 pounder failed against MacDonald quarter pounder because Americans believed 1/4 > 1/3.
The Quarter Pounder plus
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"In other words, unlike many who have voiced an opinion on this topic, I know what I am talking about."
"I'm a first generation American..."
yea its difficult lets not do it
False dichotomy. An alternate position is to do it in a measured, planned way, not under duress as the economy tanks and international relations are soured.
Let's approach it from the other direction: why should we? What are we getting by trying to "bring it back"?
High paying factory jobs that will allow an individual to purchase a home and start a family!
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It depends what you mean by "America" and it depends what you mean by "bringing manufacturing back."
Difficult sure, but the economic incentives and national security implications will make the difficult task possible
I think there are many people in the United States that would rather have manufacturing jobs than to have fast food or retail jobs.
Kirk
I don't think it's realistic to bring manufacturing back, so to speak. Are the words being taken literally here? Does this truly mean Orange Man wants to bring all manufacturing back to the United States, or do we want to weaken our largest competitor and buy those cheap products in other countries who are less of a threat, speaking in terms of their technological advancement and economical trajectory?
China has been moving cheap product production to SEA for awhile now, what the USA wants is countries like Vietnam to make cheap products without Chinese involvement in the manufacturing tech and supply chains…which is pretty much impossible.
> China has been moving cheap product production to SEA for awhile now, what the USA wants is countries like Vietnam to make cheap products without Chinese involvement in the manufacturing tech and supply chains…which is pretty much impossible.
Not too long ago it was "common knowledge" that the Chinese couldn't do advanced stuff, now it's "common knowledge" you can't do advanced stuff without the Chinese.
Nothing is impossible (at least in this area). If someone says it's impossible, they're really saying "I don't wanna do it."
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And for those who want a video, watch Scott Galloway on Anderson Cooper https://youtu.be/qg3JOR44r6M?si=Ggwfuuy-_lXjFUxq. Galloway notes that the US is only second to China in manufacturing and the Cato survey that found 80% of Americans want more manufacturing but 1-in-4 or 1-in-5 have any interest in going to work in manufacturing. And he quotes Dave Chappelle, "we want to wear Nikes, not make Nikes." (https://youtu.be/LAg1bDvuarc?si=-aLApcSdAk75d7Vr)
Back to the article, I'm no expert on tariffs, but explaining things to people and trying to understand where they "are" (I'm a social worker, so this is SW-speak) are two things I've spent my policy career doing. If I hear one more quilter (I make and sell one-of-a-kind quilts) say that the solution to the high price of quilting fabric (because of tariffs) is returning manufacturing to the US and Trump is our savior for recognizing this, well, I don't know what I'm going to do other than share the link to this blog.
One American did the underestimating.
I understand his economic arguments.
Let me make a national security argument: China will move against Taiwan. Chinese ambitions do not stop there. They want Japan, South Korea, the Philippines, and many more nations as their new territories.
We saw international trade cut off in WW1 and again in WW2. It will happen again, and soon.
We are better off with an incremental step-down in trade from tariffs than a sudden cut-off. That is what Donald Trump's tariffs are doing.
Building a new factory needs a few years from idea to start of planning to production. 2 years if you are really really quick maybe, 4 to 6 years might be more realistic. The term for the current administration ends in 3.5 years and the next one probably won't be lead by Trump, so things will change.
This means that nobody will even start moving production back yet, they will pay lip-service, do the minimum to get along for this term, and hope for the best for the next one.
Politicians have been running on platforms of about undoing the damage of offshoring since Obama's first term at least, now here we are in 2025 and someone just won an election and it played a key role so clearly it's a big important thing and it's reasonable to expect it to stick around as an issue on the official party platforms. There is a non-negligible chance that in 2029 there will be someone in the white house who continues to push in that direction, even if the specific policy is very different from the current tariff policy.
The wise thing to do is to at least make steps in the direction of on-shoring or at least make your plans and investments compatible with it.
This article was a really interesting take on this too: https://semianalysis.com/2025/03/11/america-is-missing-the-n...
The tldr of that post is: - To be really good at making robots, you need to iterate fast
- To iterate fast, you need all component manufacturers nearby (or you’ll be wasting weeks shipping parts from somewhere else)
- To be really competitive at manufacturing, you need to be good at robotics.
- If you’re missing all of these pieces, it will be hard to catch up with (say) China, which has been exponentially growing in every possible aspect of manufacturing for decades. Not only do we not have strong manufacturing, but we don’t have strong robotics companies, don’t have many of our own robotics components companies, and don’t even have much in terms of raw materials. Whereas China has been investing heavily in every single one of these areas.
Bringing manufacturing back means investing in all aspects of the supply chains which lead to technical innovation in manufacturing, which is really hard to do when the supply chain is set up to pull from our current competitor.
A personal anecdote from someone close to me. A food plant in Canada (so not heavy/high tech manufacturing), was importing raw materials from US, processing it and exporting it to US. After Trump tariffs, they bought some small plant in the middle of nowhere USA. Moving most of the equipment to that US plant, increased the salaries of Americans that worked there before (very low salaries compared to Canada). So yes, it's unskilled labour but an example of production moving quickly back to US.
This article seems to be full of propaganda and downright lies. For instance, there are plenty of tool and die makers left in the USA, plenty of injection molding machines. I have personally seen them and met the tool and die makers as well as the machines making the molds.
It's difficult to address the giant article full of misrepresentations point by point. It's tough to see it up at the top of HN. Wish that I could do something to correct the misinformation that is being disseminated.
This person has a vested interest. They manufacture cheap crap in China (or Vietnam, I don't care) for American kids to suck on. What more do you need to know?
If you feel there are misrepresentations, then just pick one point and discuss that. I've worked in manufacturing-dependent companies and industries, and lived in China for years. His observations don't feel entirely off-base to me and fit much of what I've observed. So if there is something wrong here, help us clarify one part of it.
"To make Brain Flakes, you melt plastic and force it into shaped metal molds. Were we to import the machines and molds needed to do this, it would work for a little while, but as soon as one of those molds broke, we’d be in trouble, because there are almost no moldmakers left in the United States. The people who knew how to build and repair molds have either passed away or are long retired. In the event of a problem, we’d have to order a new mold from China or send ours back, shutting down production for months."
This is what I have the most problem with. As I said above:
"For instance, there are plenty of tool and die makers left in the USA, plenty of injection molding machines. I have personally seen them and met the tool and die makers as well as the machines making the molds.".
The reality is that there are many injection molding machines in the USA making weapons, medical devices, electronics enclosures and connectors, car and airplane parts, and other high margin products, not kids toys. And it's a lie to say that tooling, molds, and tool and die makers and shops aren't widely available in the States. They just don't want to pay more for them, and are therefore disseminating propaganda to the contrary.
And, I have also spent time in China, I have toured the factories there, I know what I am talking about as well.
Nonsense. Bringing manufacturing back to the US will be easy. Economists will probably call it "Miracle on the hudson river".
Economists are full of bs. They keep framing everything as impossible and when something good happens later, going against all their predictions, they call it a miracle... Maybe these economists are just projecting by assuming everyone else is just as incompetent as they are.
Of course if society was made up only of economists, we'd still be living in caves, worrying about the difficulty of bringing firewood back to the cave.
Written when the tariff on Chinese phones was only 54% and later 10%.
Ah, those were the days.
if manufacturing were brought back, the skies would be filled with coal soot. better that the u.s innovates in other ways, but the u.s seems to largely reject renewable energy to power those plants.
Regardless of what is believed about how well implemented or necessary these reforms are I believe there is an ironclad law of reality that real wealth can only be expressed in terms of material things - houses, phones, computers.
The era of making up tall tales about the supposed value of money via all sorts of futures and stocks and financial instruments the feeble mind can scarely understand cannot be over soon enough.
The value of money manifests when its exchange for physical goods.
If the Communist fairy waved her magic wand about and distributedall the wealth of the rich to every american equally, half of the people would decide to buy a new car with their newfound wealth next day, only to find out the supply of cars hasn't increased.
There'd be like 10% more cars sold, with people bidding over each other to actually get access to that supply, which would trigger massive inflation in practical terms, revealing the emperor had no clothes all along.
America is the wealthiest nation in the world. You just need more equality! Not MORE wealth! Where is that supposed wealth going to go to? Look where it has gone!
There are some interesting things in this but there are also some deeply cynical anti-working class stereotypes:
>You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.
>Chinese workers much less likely to physically attack each other and their manager. They don’t take 30 minute bathroom breaks on company time. They don’t often quit because their out-of-state mother of their children discovered their new job and now receives 60% of their wages as child support. They don’t disappear because they’ve gone on meth benders. And they don’t fall asleep on a box midshift because their pay from yesterday got converted into pills.
>Sadly, what I describe above are not theoretical situations. These are things that I have experienced or seen with my own eyes.
Really? How does he know if someone is on disability? How he know many of these are not seen in China? If they aren't then why aren't they? I don't think it is as simple as work ethic.
earth doesn’t need more factories, consumer shit needs to be printed out of some sort of organic material that is able to decompose quickly.
or change the consumer habit to consume less, and/or change how things are produce in order to them last longer (reduce planned obsolescence) or even better we rebuild the system to serve human needs instead of feeding capitalism's endless growth.
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The mainstream assessment is deindustrialization is inevitable in the western world because all kinds of legitimate reasons: the cost is too high. The talent pool is too small. We are left behind and lack critical IPs and infrastructures. People are too lazy/stupid/uneducated/self righteous/<your favorite derogatory phrases>. We can hang on to our high-value service industry.
What I don't understand is, why would people even want the US dollar and its service industry if we can't produce sufficiently any more? And what about future conflicts in the world? The US can't even produce enough saline solution or disinfectant wipes, let along active pharmaceutical ingredients? Did people see what China goods we tariff on? We tariff China for advanced materials, electronics, machineries, and etc, yet China tariffs on our raw materials and agricultural goods. And we think the US can maintain its wealth by behaving like a colony of China? When there's a conflict between us and China, what do we do? Beg them for the life essentials? And we keep yelling to punish Russia and help Ukraine to win the war and we should, but with what? We can't even out produce artillery shells faster and cheaper than Russia, or drones faster and cheaper than China. Admiral Yamamoto used to say that he saw so many factories and chimneys in Philadelphia that he knew that those industries could turn into efficient war machines if Japan ever declared war on the US. Would he be able to say the same today?
As for what we can, wasn't the US a manufacturing powerhouse until early 2000s? BTW, the US is still a manufacturing powerhouse in some sectors, but we just can't make things cheap enough with good quality because we pretty much destroyed our light industry. Didn't China have nothing and it was heavy investment from the western world that helped China grow so fast and so rapidly? Then, why can't we shift investment back to the US and bring our key industries back? We kept talking about technical difficulties, yet we ignore the necessity of the matter.
It's really only one guy that underestimates it
> And to sew, we must first repair the social fabric.
This.
https://www.tiktok.com/t/ZTj8VBsTQ/
All of these points are overstated or just flat out wrong. For example the price of cheap manufacturing labor in America isn't higher than it looks, it's much lower, because there are an extremely large number of NEET men.
The iphone, while impressive, is not the end all be all of American manufacturing. The major goal is to bring back tool makers and increase industrial density.
>Chinese manufacturing labor isn’t just cheaper. It’s better.
>In China, there are no people who are too fat to work.
This is obviously just dumb anti-american propaganda. Since this article isn't written in good faith it's not worth my time to debunk point by point.
The part that blows my mind is timing. It's going to take years to get anything up and running. Yet tariffs are cutting supply immediately.
wtf is the plan for the 5-10 years in between?
oligarch buy up of failed industries. Then we all live as renters.
Yeah sorry but the Apple math is so weird that it cmake me doubt the rest of the article. An increase of 54$ in taxes doesn't explain the 216$ increase in price. Of course to keep the same profit, the price would increase more than 54$ to handle some externalities and the decrease of sales, but it would be paid only once and do not need to increase at each step
The world is an interdependent eco- system these days. The idea that a country can isolate itself an reproduce expertise that has flourished elsewhere is a bit silly and tilting at windmills.
Globalization is a fact of the world today and the best path to better lives for everyone is through mutual cooperation and policies that lift all boats.
Trump's goals and attempts to change this are foolhardy.
> Let’s focus on America’s strengths in high end manufacturing, agriculture, and innovation instead of applying tariffs to all countries and products blindly. We should be taxing automated drones for agriculture at 300% to encourage their manufacture here, instead of applying the same blanket tariff of 54% to that that we apply to t-shirts.
Everything wrong and right with the author's thesis. Our present day high-end manufacturing, agriculture, and innovation are already facing the steepest tariffs from a broad range of countries. The uneven playing field extends to IP theft, heavily subsidised and protected industries abroad and other forms of unfair competition like port traffic manipulation or burdensome legislation.
The author think that "targeted tariffs" would have a different effect from what we see now with trade war and retaliatory threats, market instability and uncertainty. This is false, but also ultimately harmful to our "agricultural drone industry". It's hard to have a niche industry without the larger picture, and it's hard to have "drones" without knowing how to manufacture constituent parts and having a reliable domestic supply chain for such. A domestically sourced supply chain encourages innovation and adaptation to immediate customer demands and goods can arrive in days or hours instead of weeks or months. Innovative requests to parts makers aren't immediately harvested by Chinese industrial spies and knowledge and technological advantage can remain local for longer, allowing for time to progress again before others can catch up.
Encouraging lazy and unoriginal drone manufacture in moated "made in USA" assembly lines is precisely the low-end type of job that "no one wants to do" and will inevitably produce the least capable drones the least efficiently or profitably. Our manufacturing and industrial capacity needs to be the world's best and most cost competitive because nothing else will do.
Only automation can save American industry. There will be "fewer" jobs but they will require skill and training. Robot management and supervision and repair and update and retooling will all require a large labor force. Creating robots and the software they run on will continue to be an important and large sector of the software industry. But manufacturing is only about jobs in the way that having a healthy agriculture industry is "about jobs", hardly at all.
Manufacturing real goods is the difference between servility and freedom given that modern war in the nuclear age also entails producing billions of tonnes of metal and blowing it up in distant countries, and could require replacing percentages of the global shipping tonnage that would be destroyed in a major conflict. It requires manufacturing thousands of substation transformers and the aa systems to defend them.
If we had invested strategically into a variety of heavy and light industries over the past 30 years, we almost certainly would have invented better processes and formulae for making things than we currently possess. We could have more globally competitive steel, even more advanced finished products and the knowledge and experience to "make anything better and more profitably than anyone". Industrial production and manufacturing make up roughly 15% of US GDP today. "Bringing back manufacturing" might increase that number significantly but it's hard to see how or why it would need to be more than 30% outside of wartime. That wouldn't even require a doubling of the jobs involved because much of this would have to be automated.
I agree with the author's emphasis on education and "fixing" things being critical in the execution of any kind of industrial renaissance. If the tariff fight lowers tariffs globally, that is a small move in the right direction of leveling the playing field and rewarding domestic producers who are globally competitive.
Robot drones probably are something the US should do. Access to US farms is useful for anyone making agriculture products. Remembers these drones are part of the supply chain for food, and so doing them in the US makes the supply chain closer. You want the ag drones made in small city, not Silicone valley. However your might write the software in Silicone valley - that is where you will find a supply of people who can do that - some of those people will then be making regular trips to the factory though to learn how it works.
America does not underestimate that difficulty. Donald Trump does.
The US should look into other countries efforts to replicate Silicon Valley, you just can't. You will get some niche good, you will waste some money there, but you won't get the same level. '
This, without even considering for a moment that China is 4+ times the US.
to return production to the United States, it is necessary to reduce the level of wages and consumption to Chinese level
This article is very goofy. America manufactures very complicated things. Building an iPhone at scale is not complicated in the grand scheme. Building it as low cost per unit is a complicated socioeconomic question- ive seen and read enough about working conditions at Foxconn to know that the complexity rests with the government control of the laborers' lives, and the laborers' lack of relief from what Americans would decidedly call slavery.
1- Tariffs will bring some manufacturing back to the US. The before/after tariff pricing presented in the article is fiction- price points cannot simply be doubled, consumers will reject it, pricing is extremely complicated and sensitive, Apple would have already had the iPhone set at $616 if they believed that was an attainable price for the volume. Apple is among the most profitable companies in the world, in part thanks to their mastery of labor exploitation.
2- Weak industrial supply chain- we have an incredible supply chain and industry can hop right on. Trains, planes, and automobiles galore. Extremely adaptive and we have plenty of room to expand. Auto manufacturers dont seem to mind building in the US, slightly more complicated than the toys that Molson sells.
3- We dont know how to make it: some things sure, most things: yes we do. We do have some additional capacity building required but this is not some crazy challenge. The beautiful thing about it is that, for the stuff we cant make easily, we can just pay the tax and keep in motion. It becomes a simple optimization calculation.
4- effective cost of labor- this is a challenge for sure but it has significant upside implications for American labor and the American lower and middle class. Again, this is a simple optimization. He points to all the fraud in the American system and the slave-like conditions of the Chinese system as if those are things things that shouldn't be addressed / barriers to entry for US? US needs lots of improvements that should be addressed not matter what.
5- Infrastructure- I seriously doubt the electricity stats but accepting it at face value, we have endless gas and sunlight in the west, US can adapt here as well. China notably does NOT have endless gas supplies.
6- Made in America will take time- OK? I am here for it!
7- Uncertainty- I would love to see them permanent. But locking in some wins from 4 years of America-first, modernized manufacturing base will go a long way.
8- Most Americans are going to hate manufacturing- why is that something you get to declare and presume? I think Americans will love job opportunities.
9- The labor does exist, we are just paying them to not work. it's an epidemic and circular problem. A bigger current issue is that we also dont have enough jobs to put low skilled workers to work. We need more low-ish complexity but reliable jobs.
And so on...
The true and sad truth is that manufacturing can be moved anywhere but the people that keep parroting about it's importance are in complete denial about the primary issue: costs. These costs have very little to do with infrastructure and building factories or logistics. Those are a contributor, sure, but that only scratches the surface. While China has seen insane growth in the last 20 years, that growth is at the expense of workers. No doubt they have a lot of value in terms of skills(which take a long time to acquire) but you also need to remember that there is a difference between the significance of working in Asia and Europe/north America. To us Europeans (and North Americans) work brings stability and security. In Asia, work is the difference between life and death, regardless of how skilled you are-you are legally expandable. Does anyone seriously believe that iPhones will be made in the US? The basic salary at foxconn is just under 320$/month or $1.81/hour. That is around 10x less than the US. This is ignoring the atrocious working conditions and far above the 40 hour work week. If we do factor in that as well, the difference is likely in the 25-30x range. I come from a country with a minimum hourly wage of around $3.6, let me tell you, as soon as the clock hits 18:00, people will drop everything where they stand and go home. The only way to compete with China is to automate everything and let machines do all the work, which is not a terrible idea but also nearly impossible to achieve. And even if you spend two decades doing all that, there are costs to all the R&D to get there. No one is going to buy a $15k iPhone, nor will they buy a $20K laptop. A logo that says "Made in X" won't justify the price. This comes from someone that uses a dual-xeon workstation as a personal computer.
Here's another example: a market that has been completely dominated by China: consumer drones. Believe me when I say this, I hate DJI and while I have one, I refuse to use it because of all the security implications. How many European and US companies are competing with them? Quite a few actually but the big names off the top of my head are Parrot and Skydio. I own both a Parrot and a Skydio and the quality of both is amazing. Yet they are still barely keeping up with DJI and at 5x the cost despite the demand - DJI still holds 90% of the market share. I can justify the price because of my privacy concerns but that's 1/1000 people. For most people it's always going to be a trade-off between price and quality+privacy.
If you want to enforce all that through tariffs, just put 5000% tariffs so that the local manufacturing cost will be the same as the cheap import and you solved the problem. How many people will be willing to spend 100 bucks for a pair of socks? That's a different story. The soviet union attempted something similar for several decades while trying to copy western technology. Anyone that knows a bit of history can tell you how that ended. Spoilers: not a success story.
Fine, we underestimate the difficulty. But we can make a detailed plan like other countries do. The US has massive advantages. Just no longer so massive that we can expect to win on sheer awesomeness.
I feel like we in the US have a horrible split evaluation of ourselves: either we're supreme or we're doomed. Both sides of that split are emotional states, not useful facts.
> But we can make a detailed plan like other countries do
The problem isn’t that we don’t know this: it’s that the person making the decisions rejects the idea of needing to make a detailed plan, or even understand the situation well enough to recognize the problems a plan would need to address.
Administrations come and go. Voters need to calm down and ask for something rational.
Not America, Trump
There's an argument that America is fundamentally broken at this point. By fundamentally, I mean value wise the country is splitting apart. Trump is the saviour for half the country and the devil for the other half. It's basically taken less than a hundred years, even after riding on the back of world war 2 and hegemony, to bring the country back to the great depression. The trade wars for me are just another desperate attempt by the country to point blame elsewhere.
House prices are at an all time high. Cost of living is becoming unbearable. So, $25 dollar menial jobs are scoffed at, because of inflation. Inflation is due to out of control printing/spending and government debt. Debt is due to big government, capitalist greed and oligarchy. Capitalist greed is due to economies of scale when offshoring. Oligarchy and big government is due to an entrenched lobby system. Lobby system is due to the cost of electioneering and bad decisions by successive governments.
It goes on and on.
Root cause: Systemic rot. Diagnosis: Failing empire Prognosis: UK (if the fall is managed)
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You're right: it's a bit racist. It's also faulty reasoning: you went to a high school in Cupertino with a markedly higher population of second-generation Asian-Americans, and went to a high school in an extraordinarily wealthy area; in fact, I think you might be attempting to generalize from the zip code with the highest density of immigrant professionals in the United States. If you want to generalize from China, that by itself is 1.4 billion people; they're as varied as any large population.
But I’m also Asian myself and all my relatives and everyone I know from China is the is way.
It’s a stereotype. Asian tiger moms. Asians are good at math. Math competitions, test scores. Quantitative metrics everywhere point to a worth ethic that is viciously high.
My conclusion of course is derived from quantitative evidence from general populations and iq scores by country. When I mentioned Cupertino I did it only to say that all the quantitative evidence happens to align with my anecdotal experience.
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The amount of pooh-poohing of this idea is even more than I would have expected from HN, despite tech’s love of belittling others ideas.
The reason we need manufacturing is because the middle class is decimated. None of us tech workers feel it because we don’t live in neighborhoods that have been decimated by it. We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that have been destroyed by it.
Too many people say it will take “years” to get factories operational. That’s why Elon is there. He knows and has done this, to point out which regulations need to be axed in order to improve the time to market for new factories. Trump will listen to him and get rid of any regulation that doesn’t make sense, or even regulations that do make sense but take too much time. For better or worse factory building will be faster over the next 3 years.
Now that we have these greenfields for new manufacturing opportunities, instead of standing there with your arms crossed, shaking your head why the idea won’t work, how can you take advantage of this new opportunity to get rich?
> We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that have been destroyed by it.
Blue collar workers were the first to push for globalization, because they suddenly could afford a lifestyle that used to require the salary corresponding to a couple of steps upper in the corporate ladder. A blue collar salary suddenly could provide for many more amenities... til the salary was no more!
Everyone wants manufacturing back, but only for the products they can produce, because everyone still wants to buy at Chinese prices.
Furthermore, the regulations that most stand in the way of cheap manufacturing are environmental regulations, and good luck with that! We have got used to breathe clean air, and I feel most people still love clean air more than they hate globalization.
Blue collar workers never pushed for globalization because they knew exactly what would happen, they would lose their jobs and they did.
The irony now about Chinese goods is that those of us that can afford it avoid them as much as possible. I check every product that I buy on Amazon to make sure they aren’t made in China because they could be sending me poisoned goods.
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Doesn't mean we shouldn't do it.
Well, sure, but perhaps some kind of plan is warranted?
IIRC correctly, the previous administration did try to do some of the slow, steady imperfect work of planning to gradually bring back key industries.
See https://en.wikipedia.org/wiki/CHIPS_and_Science_Act and https://www.theverge.com/2024/7/11/24195811/biden-ev-factory...
Of course, the voters wanted something else.
Who is going to commit the resources to make serious money losing plans vs manufacturing overseas?
Isn't the point of capitalism to not have a plan and let the market figure it out?
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Which is why things that bring back manufacturing to the US is something we were doing. It's just unfortunate that instead of continuing that, the current administration is trying undermine the effective efforts of the previous administration's actions that helped bring manufacturing back into the US.
No, it doesn't. There is a presumption that manufacturing is Better, a more ideal way of organizing the economy, based on a false nostalgia of America past.
sure, but it will take longer than 4 or 8 years and everyone in power wants their own thing, not continuity. it cannot happen without a long term plan and long term plans cannot happen if have, maybe, a year to do things and the rest is election time.
Molson has a Chinese spouse, directly benefitted from Chinese manufacturing for a long time, and often spouts direct propaganda from his X account so while he's likely to be right about a lot of things he had/has a strong incentive to not imagine alternatives to the status quo.
Try attacking the points he made in the article instead of him.
What attacks? Fwiw: "he's likely to be right about a lot of things". Perhaps I should have been more specific: I think his analyses are mostly correct, his predictions are not.
Subscribe to ground news so that you know what historically a news sources biases are.
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I don't really see what he said as an attack. It's good to have some "small print" sprinkles with the meal.
Where are those AI experts on this one? Why isn't AI commanding our manufacturing boom? Isn't manufacturing all just software and logistics?
/s He is right, we should just crawl under a rock and die instead.
Remember the JFK "We choose to go to the moon" speech?
(I wonder how many of this defeatist articles are financed by China somehow).
Trump is doing his version of the JFK vision. We choose to dismantle the country and strip it for parts.
I think Molson Hart should add a panda to their line of stuffed animals.