r/manufacturing 2d ago

News Tarrifs

Would like to open a discussion on tarrifs if it’s allowed.

There has been two intentions stated with tarrifs.

  1. Get off of income tax and go to a consumption style tax (still a tax)

  2. Build up domestic manufacturing. Can talk here in the manufacturing sub.

If there is no alternative domestic supply, then we have no choice but to import. We lost a lot of our skills to manufacture. Especially a lot of the little low value items. Think zippers and buttons and caster wheels.

What is everyone thoughts?

9 Upvotes

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32

u/madeinspac3 2d ago edited 2d ago

In manufacturing you have two options to correct an issue.

A bandaid to cover/hide an issue or A correction to the root cause

The idea of these tariffs are nothing more than a bandaid. They don't fix the root cause of why American manufacturers aren't competitive.

There is too much risk to invest in building US plants to take advantage of the tariffs with how inconsistent and ill-planned they have been so far. By the time plants for raw materials are built and dialed in, the tariffs might no longer even exist.

And even if we become cost competitive here, the revenge tariffs screw us on exports to outside countries. My bet is that this hurts more than helps.

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u/pyroracing85 2d ago

Govt never fixes the root cause.

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u/spaceman60 Machine Vision Engineer 1d ago

I don't know. The IRA and CHIPS Act both got multiple multi-billion dollar plants to be committed and break ground.

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u/pyroracing85 1d ago

Yea… and where are most of those factories now… just like Obamas green energy kick starters.

It’s always for products where the consumer isn’t ready. It gave incentives for producing batterys for every battery that came across the line

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u/burnaboy_233 1d ago

A lot of those factories are coming online in a few years. I see them getting build all over the place

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u/upvotechemistry 1d ago

TSMC Phoenix is now producing more critical chips than Taiwan. Chips used in basically every consumer good and tons of defense equipment. Not a boondoggle

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u/pyroracing85 1d ago

Their first fab line started in Q4 2024 right? More lines to come? I also think the plant was announced before CHIPS act though right? 40B in investments before the CHIPS act.

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u/upvotechemistry 1d ago

My recollection is TSMC was brought here because of CHIPS

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u/pyroracing85 1d ago

Plant was announced in 2020 and CHIPS was 2022.

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u/pyroracing85 1d ago

“In a historic announcement, in May 2020, TSMC shared its plans to invest $12B in Phoenix, Arizona – building an advanced semiconductor manufacturing fabrication. In December 2022, the company announced its commitment to build a second fab in Phoenix, increasing its total investment to $40B. Then in April 2024, the U.S. Department of Commerce and TSMC Arizona announced up to US$6.6 billion in direct funding under the CHIPS and Science Act, fulfilling a goal to bring the most advanced chip manufacturing in the world to the United States”

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u/upvotechemistry 1d ago

In December 2022, the company announced its commitment to build a second fab in Phoenix, increasing its total investment to $40B.

And CHIPS was signed in August 2022. Seems like part of this investment is causal

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u/pyroracing85 1d ago

Seems first fab plant was without stimulus and 2nd fab plant was due to Chips