Posted by JumpCrisscross 8/30/2025
The effect will probably be similar to Covid / Remote Work - marginal idea until an externality made it essential. Does mean sh1t tons more unemployment though, so like I said, straws being clutched
Neither of which is true in the real world.
The assumptions are only bad if they prevent the simple models from being useful, and the existence of a scenario where a model's simplifying assumptions prevent it from being useful does not prove that the model is worthless.
It's like doing physics where you assume perfectly uniform spherical objects in a vacuum. It isn't worthless just because that isn't how the real world works, but depending on the circumstance it can also give you incorrect results, and sometimes even be way off.
This is incorrect. Lack of information is priced in as "risk".
This…is not true. What theory are you referring to?
Its a long time known flaw in economics. Im sure there are better models but i still agree with GP, the scientific field of economics is still a joke on par with psychology.
Classical economic theory predicts literally the opposite. It predicts the prices will go up exactly as if the base materials became more expensive. Classical economic theory predicts that free market produces lowest possible prices and thus any tarif means price up.
Insurance companies totally operate on evaluating and quantifying risk.
In real world markets economics considers elasticity, arbitrage, and distribution of market information between producers, wholesalers, retailers, buyers etc. But very little of that finds its way into op-eds or blogs aimed at a non-academic audience.
... Wait, why on earth would businesses do that? "Yeah, we're in the business of buying X for a dollar and selling it for 90 cents". What economic theory are you referring to that makes that in any way plausible?
When input prices go up, output prices go up, and usually consumption falls.
The only businesses that are derailing with tariffs issues are those that import goods to sell. The argument against tariffs is that they make goods more expensive.
Of course, this argument is true. But that’s not the end of the story.
Because prices are higher for imported goods, demand for domestically produced goods increases. This increase in demand leads to increased demand for labor, which can increase wages. Additionally, the money multiplier effect is higher when money is kept domestically vs paid to offshore parties.
Finally, I think it’s ridiculous to expect that this nation can maintain its wealth without producing anything. We act as if the producers of food are fungible cogs that businesses can swap out. But I think we’ll find that management is the fungible part. Anyone can sell a quality good. Knowing how to make it is what’s important. I’m surprised that mindset doesn’t resonate more with software engineers.
Because of this, Boeing gets to make thousands of jetliners and sell them all across the world and America gets to be one of very few places that can do this.
I think you'll find that steel and aluminum are a lot more fungible than jetliner factories. Why are we kneecapping what we're good at for the sake of things that China will ALWAYS be better than us at?
> Finally, I think it’s ridiculous to expect that this nation can maintain its wealth without producing anything.
The total value of US exports has only ever gone up (see above).
I do get the argument for moving manufacturing expertise back onshore, I really do. But tariffs are not gonna lower the minimum wage and if manufacturing is gonna come back to the US, it'll come back in a highly automated form with a boatload of government support.
Comparative advantage is not innate. China was a rural country and didn't have a comparative advantage in manufacturing, they developed it and are now a powerhouse.
Nothing worth doing is easy. I don't know why Americans think that if its not easy, it's not worth doing. Americans 80 years ago would hate us for what we have become today.
Plenty of Americans want factory jobs to exist - almost no Americans want to work them. Sure, nothing worth doing is easy, but not everything hard is a good use of time and resources.
This is a well-known problem with factory jobs: https://fortune.com/2025/04/15/americans-want-factory-jobs-r...
It's not possible because you simply cannot afford to pay manual factory workers a competitive wage AND sell the goods from the factory for competitive prices.
Factory work coming back to America would have to look like car factories do right now: highly automated, highly skilled work that takes full advantage of cheap inputs and advanced technology. It will not be helped by raising the price of inputs, deporting engineers, and defunding research.
Now, its true that there have, within that, been a few decades of regression in tax and other policy effecting a worsening of the distributional situation, such that labor gets a smaller share of the returns that are returned. But even with that, basically every segment of society is better off in absolute terms than when manufacturing was more dominant: working against comparative advantage and regressing on the US’s industrial mix would only reduce aggrgeate output and do nothing to improve distribution. And that's the point, because its a policy proposed by those who don't want to deal with distribution, and in fact want to take further steps to worsen it, because they expect the benefit their narrow group will receive from that will outweigh, for them, the impact of shrinking the total output.
Imagine you invest $1000 in the stock market and the market is growing at 10%. But when you open your brokerage account, you see only 5% growth, and it turns out someone has been pocketing the difference. When you confront this person, they say: don’t be angry, you’re still better off than you were before. You would be right to be angry and you would be right to demand policies that force this person to give you your fair share.
That's literally what I said, and why the solution is to undo the things that produced that instead of undoing the things that fueled the aggregated growth while doubling down on the sources of inequality.
It's not 1910 anymore. The US is integrated into the global economy and many if not most jobs export to a global audience. Do you want to hurt the labor arbitrage that allows us to support advanced manufacturing?
Honestly, I’m surprised by this, especially here on HN. This is/was a place where builders congregate. Building new things is never easy. Sometimes all you have is a belief that you can do it. It’s sad to see that go.
The govt of India has already put one small order on hold and the word in aviation circles is to switch to Airbus as far as possible.
Military purchases now also won’t happen.
Peter Navarro in one of his rants inadvertently leaked this out on TV: his specific issue was a demand for mandatory tech transfer and manufacturing in India.
Plus, with the fickle and chaotic application of trumps tariffs, you’d be insane to invest in domestic production.
I think there are some categories of goods where protectionism makes sense for national security reasons, but for most goods, I don't really see the value of propping up less productive domestic production and causing increased prices for consumers. Do we need to make underwear in America? Or toys?
And of course tariffs are not one-sided, so retaliatory tariffs hurt the domestic industries where our exports are competitive, which tend to be high-value.
You can let bad be the enemy of both good and perfect.
Investment in manufacturing structures is down in ‘25 [1]. Manufacturing activity in the northeast is down, with “the new orders index dip[ping] into negative territory” [2].
Tariffs can reduce trade imbalances and incentivize domestic production. We’re not doing that. Our tariffs are too volatile. They tax manufacturing inputs. Tweets grasping for the straws of a Nobel prize cede prized export markets like India to China [3]. Cancelled licenses for nearly-complete projects add risk [4].
The policies of a degrowth leftist who wanted to reduce our industrial output and pivot to manufacturing would be virtually identical.
[1] https://fred.stlouisfed.org/series/C307RX1Q020SBEA
[2] https://www.philadelphiafed.org/surveys-and-data/regional-ec...
[3] https://www.nytimes.com/2025/08/30/us/politics/trump-modi-in...
[4] https://www.reuters.com/legal/litigation/us-orders-orsted-ha...
Also, your second link generally paints a mixed picture, not an outright negative one:
> On balance, the firms indicated an increase in employment, and the price indexes rose further above their long-run averages. The survey’s broad indicators for future activity suggest that firms continue to expect growth over the next six months.
I think it’s misguided to interpret current data as evidence either for or against the current policies. This is something that’s going to take a decade plus to play out. Trying to use data to call winners 6 months in isn’t really possible.
Sure, it’s down in ‘25 and has stalled a multi-year trend. The most-recent data show that trend spreading.
> something that’s going to take a decade plus to play out
Won’t get there. One, the policy is changing on a week-to-week basis. And two, there is no bipartisan buy-in to this policy.
The tariffs could have worked were they sensibly implemented. They weren’t. As structured, they are politically and economically infeasible for their aims. (Great if you’re an intermediary, though.)
Trump has used tariffs as leverage against India for buying Russian oil, as leverage against Brazil for domestic politics he dislikes, against Mexico to pressure actions against drug cartels, and against Canada and others for recognizing a Palestinian state.
There is no sound economic logic to these schemes. The rates change as Trump likes or dislikes the praise he hears; deals are announced without signed agreements or details; rates, justified by "returning manufacturing" are changed faster than you could dig a foundation for a new factory, let alone actually make anything; industries are targeted for political reasons (like climate change denialism) and not economic reasons; deals are reached to exchange dollars for US-based manufacturing (like the china chip buying kickbacks).
The only logical consistent aspect of the tariff scheme is as unrestrained (and likely illegal) power play for Trump to get what Trump wants.
There's more than one commenter in this post that talks about "other countries walking all over the US", or claiming that capitalist free trade allowing American consumers to purchase ridiculous amounts of stuff is somehow a scam?
It's as infuriating as it is mindboggling how people can fall for it. It's completely baseless.
Both Obama & Biden deported more illegal immigrants than Trump.
Due Process is a Democratic Party position that Republicans don't value.
Actually, considering the lack of real penalties for employers of illegal aliens, I'd say that the acceptance by both parties of white-collar crime is the real problem.
Properly prosecute rich criminals & illegal immigration will dry up real fast.
Also, the number of deportations does not tell the whole story. The number of illegal crossings under Biden was astronomical compared to both Obama and Trump.
I thought it was about keeping local law enforcement out of immigration matters. Because otherwise undocumented people would be afraid to report crimes or be witnesses, and that's worse for local crime. Which is what city governments care about.
There is no meaningful path to restoring much of the US’s lost manufacturing capacity. The rent is too damn high, and the cost of goods is rising quickly as well. Labor is expensive and becoming moreso daily. Manufacturing in the US can never compete with SE asia even with 50% tariffs due to the gigantic disparity in the cost of labor.
It’s not going to increase wages, it may even result in even more offshoring due to the increases in cost for raw materials.
But even if you could wave a magic wand and put the USA on equal footing in terms of skills and experience and capability, it would still cost several times more to make the same goods in the USA due to the labor costs (and labor-adjacent overhead costs like workplace safety).
Both would need to be solved, and I think that solving either one alone is already basically impossible on any short- or medium-term timescale. A tiny bandaid like tariffs isn’t going to move the needle.
So if the idea is to be more self sustaining: we cannot.
Also, read this: https://www.molsonhart.com/blog/america-underestimates-the-d...
Basically, there is no way we "win" this economically through tariffs. Nor can we power through it by trying to throw labor at the problem, because the labor cost is cheaper everywhere else.
Even with triple digit tarrifs Chinese goods would still be cheaper.
These thinly veiled pro-trump people are much too common the internet and I'm getting tired of it.
Bananas may not matter (to you), but coffee certainly will.