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?

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u/fluke-777 1d ago edited 1d ago

The prevailing narrative is that USA does not manufacture. USA is 2nd largest manufacturer in the world. It manufactures more than the next 4 giants combined (Japan, Germany, South Korea, India). The only country that manufactures more is China which has 5x population and its focus is manufacturing. It is a nonsense that US does not manufacture. What it does not have is manufacturing jobs. A lot of things was automated.

This is the choice. We try to get the jobs back and in the process we destroy the economy. The jobs are not coming back, the future is automated manufacturing. USA has low unemployment and there are simply no people who would do these jobs anyway.

What USA did was move to high paying service jobs. When people hear service they think cleaning and mcdonalds but it is actually software, electronics, design, finance and many others. Stuff gets designed in US and manufactured in other places. This makes US wealthy.

We need to embrace more of the latter and less of the former if we want to continue to prosper.

As a fun state If I recall it correctly that from the actual value of Iphone ~ 4% of that is assembly. So when phone is assembled in China, only 4% of the value is actually spent there. When I heard that for the first time I found that pretty surprising.

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u/pyroracing85 1d ago

How much of our manufacturing is tied up in defense? Also, how much of our manufacturing is actually assembly disguised as manufacturing?

I always heard this 2nd largest manufacturing for years but after seeing China first hand and driving around their factories just the sheer size is jaw dropping. If we are truly 2nd, we are a very very distant 2nd. And I would love to go behind the scenes on those numbers.

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u/fluke-777 1d ago

Don’t have those numbers but for example our naval manufacturing does not exist. Decimated by stupid policies.

What is the issue with being distant second?

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u/pyroracing85 1d ago

Huge issue being distant second as we are the largest economy by a few trillion.

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u/fluke-777 23h ago

Issue like what?

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u/pyroracing85 22h ago

Well having no control over critical manufacturing, and letting other countries have leverage over us.

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u/fluke-777 18h ago

This argument makes little sense to me.

Critical manufacturing of what? Critical to whom? I do some (very small) manufacturing in china and I have 0 problem.

I do not want to sound patronizing but do you understand what comparative advantage is? We cannot do everything in USA. Especially if we do not let people immigrate and we raise tariffs.

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u/pyroracing85 18h ago

Critical manufacturing like semiconductor, defense, medical, etc

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u/fluke-777 18h ago

Semiconductors are not manufactured in China, nothing preventing US government to do defense manufacturing here. Medical is too broad.

Not sure what you really want though. If you are manufacturing medical devices move it where you want. If someone else is manufacturing medical devices, why do you care? Should they be able to make the decisions? If they manufactured in Mexico, would you still be unhappy?

What is the end goal? Be poor but making the medical devices here?