How much do you think it costs to make a pair of Nike shoes in Asia?

From a $100 shoe that sells for $76:

- $24 goes overseas (22 cost, 2 freight)

- $8 goes to the US gov't (3 import, 2 Nike tax, 3 Footlocker tax)

- $33 goes to US employees or businesses (5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses)

- $5 goes to Nike (11% return)

- $6 goes to Footlocker (8% return)

But now with 100% tariffs, it's a $100 shoe that sells for $100 (or a $132 shoe that sells for $100) and:

- $24 goes overseas (22 cost, 2 freight)

- $29 goes to the US gov't (22 import, 3 Nike tax, 4 Footlocker tax)

- $33 goes to US employees or businesses (5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses)

- $7 goes to Nike (11% return, 7.15 exactly)

- $7 goes to Footlocker (8% return, 7.45 exactly)

And if a US shoemaker wanted to undercut the import, a Made in USA shoe that sells for $100:

- $7+ goes to the US gov't (? shoemaker tax, 3 Nike tax, 4 Footlocker tax)

- $79 goes to US employees or businesses (46 to shoemaker, 5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses)

- $7 goes to Nike (11% return, 7.15 exactly)

- $7 goes to Footlocker (8% return, 7.45 exactly)

* Domestic consumers and companies are incentivized to potentially go for the 2nd best product. This over time can impact productivity as the tooling will decline over time as inferior solutions are bought.

* Reduced competition. We've seen this with the 25% "chicken tax" on pickup trucks. Arguably one culprit in US automakers falling behind is that they had a protected market around pickup trucks where it was hard to impossible for foreign competition to keep them on their toes. So US automakers retreated more and more into this safe haven.

* Destruction of economies of scale: If everyone wants the entire supply chain to be replicated in their country, we obviously loose economies of scale and thus efficiency. This sounds like it would be small but having multiple Shenzhen's is just not viable and we'll have to deal with higher prices and less product choice.

* Galapagos island syndrome: Over time separation of markets can lead to incompatible technologies which amplifies all other points.

There are still stupid edge cases. The cake-versus-biscuit saga in the UK comes to mind.

https://en.m.wikipedia.org/wiki/Jaffa_Cakes