Remix clone Hacker News

When Trump ups everything from China by 100% I guess US would be able to make something with profit?

▲ 8note 17 hours ago | parent | next [-]

I doubt it. It's much easier to either launder or manufacture the goods in a third country, that benefits from most of the same incentives that made Chinese manufacturing go through the roof.

Americans will be buying Chinese goods with "made in Vietnam" or "made in Mexico" stamped on it. The American profit will be in setting up those laundering schemes

▲

seanmcdirmid 15 hours ago | parent [-]

If the Trump tariffs are based on country of final assembly, then yes, final assembly will just occur somewhere else, but it will take a couple of years to setup, and the inflation shock by that time will have done a lot of damage to the economy (recession likely, depression possible). It makes sense that it took Trump forever to find a treasury secretary willing to go along with this.

▲

csomar 14 hours ago | parent | next [-]

You can bribe officials in Vietnam/Mexico. So they'll be your country of "final assembly".

▲

seanmcdirmid 13 hours ago | parent [-]

I doubt the Americans will let them do that so easily.

▲

tzs 24 minutes ago | parent | next [-]

So they will have to bribe officials in Vietnam or Mexico and bribe officials in the US.

▲

phil21 9 hours ago | parent | prev | next [-]

They already are. Just one tiny well-explained example, although it's utterly rampant:

https://www.npr.org/2024/08/23/1197961495/the-trade-fraud-de...

No bribery required though, at least in most cases.

	▲	seanmcdirmid 9 hours ago \| parent [-]
		They tried stockpiling aluminum in Mexico during the Trump ban and that was shutdown quickly. I guess they just have to be more convoluted about it. I wonder if Trump will do something like “tariff China and any country that doesn’t tariff China itself (transitive)”, but it feels like it might be futile to do that.

▲

torginus 3 hours ago | parent | prev [-]

The alternative is having empty shelves in stores.

▲

Yeul 7 hours ago | parent | prev | next [-]

The Trump tariffs will turn the entire world to China. America may no longer be interested in free trade and go full isolationism but many smaller countries can not. A painful truth is that for Europe the millions of containers with goods from Asia are a lifeline.

▲

omeid2 14 hours ago | parent | prev [-]

Couple of years for a western enterprise maybe, but in the east, things move fast. Really fast.

	▲	seanmcdirmid 13 hours ago \| parent [-]
		It depends if Trump tariffs just China or everyone. He promised high tariffs for China, but tariffs on all imports besides.

▲ csomar 14 hours ago | parent | prev | next [-]

Vietnam and Mexico will massively profit.

▲ greenthrow 17 hours ago | parent | prev [-]

That is not remotely how tariffs work.

▲ hnthrowaway0328 17 hours ago | parent [-]

Doesn't a tariff drive up prices? (or at least intended for that)

▲ Dalewyn 15 hours ago | parent [-]

Tariffs are a surcharge on imports added and demanded by the government, paid by the people or entities importing.

As an example, if an American buys a Chinese coffee maker priced at $100 and there is a 50% tariff, there is a $50 tariff that is paid by the importing American to the American government.

The total cost to the importing American is $150. Now, if this price is equal to or higher than an American coffee maker then the importing American is incentivized to purchase the American coffee maker instead.

As another example, if Tesla sells Model 3s for $50,000 and BYD comes in with a similar spec car priced at $25,000, then putting a 100% tariff on it will drive BYD's effective price up to $50,000 allowing Tesla to compete without undercutting or outright selling at a loss.

Essentially, tariffs are a way to ensure that the pricing floor of the domestic market is not driven down unreasonably by international markets at the cost of the importers.

EDIT: Fixed some math. :V

▲ codedokode 2 hours ago | parent | next [-]

> As another example, if Tesla sells Model 3s for $50,000 and BYD comes in with a similar spec car priced at $25,000, then putting a 100% tariff on it will drive BYD's effective price up to $50,000 allowing Tesla to compete without undercutting or outright selling at a loss.

Doesn't that mean that American will have to pay $50 000 for a car that is worth $25 000? While people in other countries will be able to buy cars cheaper, buy more of them and maybe it somehow improves their life quality.

▲ zie 11 hours ago | parent | prev [-]

Right, the coffee maker company in China has some options:

  * Figures out how to make it even cheaper (unlikely)
  * Figure out how to avoid the tariff legally: Maybe move the manufacture or assembly to Mexico for the US market. 
  * Claim the product is something else, just enough to avoid the tariff(i.e. claim it's a tea maker, not a coffee maker)
  * Stop selling in the US since they won't get any sales
  * etc.

The middle options are the most likely: avoiding the tariff somehow. Companies do the middle two all the time to varying degrees to get around/avoid tariffs, import fees, etc, even US companies.

▲

XorNot 10 hours ago | parent [-]

Also the other issue: the first thing the American company does is ensure it sells coffee-makers for $149 and not a penny less.

In fact depending on your tarriff regime, this can incentivize a bunch industries to actually raise prices if the new import cost is higher then they would currently sell at.

	▲	Dalewyn 10 hours ago \| parent [-]
		The incentive to raise prices is pressured down by customers' desire to not spend more money than they have to. If businesses can get away with raising prices that means the price was too low to begin with, tariffs or no tariffs.