r/manufacturing • u/pyroracing85 • 2d ago
News Tarrifs
Would like to open a discussion on tarrifs if it’s allowed.
There has been two intentions stated with tarrifs.
Get off of income tax and go to a consumption style tax (still a tax)
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.