Tariffs are great. They protect the struggling domestic IT industry and gives it time to ramp up its production of vintage computer parts.
replies(14):
Of course he considered making chips and other components in the US, but he was few billions short to start the fab.
Do you remember what it is?
if that happened, the business already had seriously bad margins, bad cash flow, over-leverage, or maybe he was just doing it out of love getting paid maybe back for his time or not.
tariffs might’ve hurt, but they don’t collapse a healthy niche hardware company where buyers are presumably also into the niche.
seems weird i dont get it. can you explain further?
(But seriously I do not know how good US Customs is but in my country every day millions of packages from Asia arrive and they are checking not even a percent).
Zoom out; recent levels are actually quite impressive in the USA. Yes, they've climbed since 2023, but they're only just reaching the pre-GFC minimum (https://www.bls.gov/charts/employment-situation/civilian-une...).
Zoom out further: https://fred.stlouisfed.org/series/UNRATE/
Had it not been for COVID you'd be at more than 16 years without a(n NBER-determined) recession, long enough to suggest a fundamental shift vs. how things worked in the several decades before that.
https://www.youtube.com/watch?v=1W_mSOS1Qts
tariffs have chopped and changed so much since this video that the specific tariff amounts mentioned are likely not accurate.
But, tariffs on used cameras or vintage electronics does not help bring manufacturing back. Let's just bring back the de minimis exemption for things like this. More industry targeted tariffs, fewer blanket tariffs.
First, overall, the US has increased manufacturing output over the last couple decades. 2019 was the highest year ever, covid interupted a bit, but levels are back there again.
However the number of people involved has dropped a lot. US manufacturing prefers automation and prefers to manufacture things which are high-volume, low labor.
A good parallel is agriculture. Foods produced in the US (and the US produces a lot of food) tend towards low-labor. Think fields of wheat or corn, not vegetables. Most fresh produce comes from cheap-labor regions like Mexico (or is grown locally with foreign labor.)
So really your point is not about American manufacturing, but rather American labor.
Secondly, this free market you refer to is the American consumer. They are very price sensitive, and deeply favor cheap over good. This contrasts to a lot of the rest of the developed world which strikes more of a balance in this regard.
Since labor is cheaper elsewhere, it follows that cheap imports are favored (by the consumer) over the locally produced items. Unfortunately the imported good is often of a higher quality now (because foreign manufacturers can afford quality and still be cheap.)
So, the politicians you speak of (regardless of party) are reluctant to medel, partly because of unintended consequences, and mostly because the only real lever they have is to increase the cost of imported goods (ie tarrif them) which in turn gets consumers upset. (Witness the fury of the voter in 2020 because of more expensive goods.)
Thus while it's helpful to blame politicians, politicians are elected by consumers. Consumers who could by local, but choose not to. Consumers who vote against politicians that cause price hikes. (Even when those same politicians incentivise local production with things like CHIPS act.)
You can blame politicians, and indeed corporations all day long, but the consumers are voting with their wallets, and "cheap" is the only metric they care about.
Let's say a companies margin was 40%. The cost of their constituent parts doubles due to tariffs, they are no longer making money as a result.
I hope this helps explain it for you.
Targeted tariffs on specific goods leads to the development of local production of that good. Lots and lots of countries have these in place.
Blanket tariffs are, of course, useless. The US doesn't have the climate to grown coffee, so tarifing Brazil serves no purpose other than taxing coffee consumption.
A surgeon uses a scalpel, not an axe. Used well, tariffs are a very powerful tool. Used badly they create more harm, and don't achieve the goal of promoting local production.
Tariffs which are here today, but gone tomorrow, don't created the stable environment which long-term investment in local production requires.
Well, Hawaii does, but your point is good, thank you.
Often with older electronics designs, the parts the engineers originally picked are no longer made. It's not the end of the world, there are solutions. Sometimes the vendor changes the part number due to a process change or the part design is sold to another company and goes under a new number. You can also sometimes find drop in compatible parts (common for the 7400/5400 series chips), these may be in a different package so you might have to design an interposer or deadbug it. The worst option is finding old stock using a broker. There are legit brokers that will source old stock and "refurbish" them for you (called re-lifeing). But there are also shady brokers that will buy counterfeits (or get tricked into buying them) that may or may not actually work. Sometimes the counterfeits are relabeled parts that are compatible but the new label gets a higher price because they aren't being made any more. Sometimes the counterfeit is actually a totally different design that is shoehorned into its desired purpose (like a new microcontroller masquerading as an old processor or ASIC). Other times it's just some random junk pulled from e-waste that's been relabelled. Other times you'll get a counterfeit that comes from a stolen design. Even when the counterfeit functions, it may not perform to the same spec as the original part (very important for military spec parts) or will have other characteristics that make it incompatible with the rest of the design (like drawing too much or too little current). When it comes to engineering in ISO9001, traceability is a huge thing and brokers just can't provide that.
At my job, we have an "absolutely no brokers" rule. They simply cannot guarantee that what they provide is genuine. If a legitimate distributor doesn't have stock of a discontinued part, they'll never have stock of it. Brokers will tell you what you want to hear while they go out and try to make it happen. I'm not saying all brokers are shady but if you are considering buying from a broker, you should be instead considering how you can replace that part.
On the other hand, perhaps that's a burden the US should be excited about tossing off. It's expensive to be the World Police, and it's left them with a lot of strained reputation and burnt-through leverage. It also requires them to do a lot of "lead by example" stuff that they seem completely disinterested in (industrial policy, forming consensus, trying to present as a magnanimous moral model).
There’s always things being supplied for at lower prices. That is what product or service improvements do.
Your car is vastly safer than a Ford Model T. Air bags, better brakes, power steering, AC - all of which make it a vastly superior vehicle. If inflation worked the way you implied, the price of it would have constantly gone up, and never would it have managed to be affordable.
Firms reduce the cost of production and get to sell more to larger numbers of consumers. Total revenue = $ value * N customers.
You expand further on your position in the second part of your para, but that is fundamentally about how wages have not gone up over time. Which has nothing to do with inflation. It has MUCH more to do with the labor markets, and the pay people are getting for their labor.
For example, the company can raise its prices. How well that works depends on whether there is competition for the company's product. If the competition is also hit by the tariffs, then they're on an even playing field. If the competition is using native parts, then the competitor gets the business.
The reason services are such a big part of your economy is because you can sit in an air conditioned office, send some emails, push some numbers around on a spreadsheet, and call it work.
You're talking about something different than what I was - improvements that make a product better without the price going up (because the cost is small enough to become the new baseline, either by market stickiness or regulation). Those don't affect CPI, and therefore make life better at the same price. So I agree with where you're coming from there.
My point is about the manufacturing/product innovations that make prices go down (regardless of whether quality gets better or worse). Take for example offshoring, which was sold as maybe your local factory will have to lay off some people but we will have less expensive items at the store so we will all win on average. But it's a trick because the Fed creates a feedback loop that makes it so prices cannot go down on average.
Wages haven't risen as fast as consumer price inflation because that new money is injected into the financial industry (the fake "fiscal responsibility" of the Republican party). And when too much newly created money finally leads to too much demand for labor and wages start rising, the Fed then tamps down on the monetary creation.
There are often no "native" alternatives.
Even the machines that make the chips are nearly all made in one country and then shipped around the world.
The amazing, modern nature of our modern world is built on the collective effort and knowledge of humankind globally.
Globally.
Overall there is a lot of manufacturing in the US. What the US doesn't have are manufacturing jobs because labor is more expensive than automation.
Maybe you meant the US should make sure to have some certain types of manufacturing like chips. In that case, targeted programs are a better approach than any sort of tariffs. See the CHIPS act for example.
But I was talking more about a mindset. And of course speaking generally- lots of people (everywhere) have budget constraints.
Having traveled in the US and Europe I'd suggest that in the US "volume" is rewarded as "good". For the same amount of money, "more" is preferred to "good". In contrast in Europe it's less "look how big the plate is" and more about "better quality."
So, to rather over-simply things, I'd describe US food as "bland, loaded with sugar, lots of it", whereas Europe is more "smaller quantities, less processing, more farmer's market".
Not just food. But across the board. Cheap = good.
And yes, I'm talking generally big-picture here - it's a culture thing - there are lots of counter examples if you look hard.
It's also done to protect local industries, hence the term "protectionism". For example, Canada's large tariffs on American milk are there to protect the local Canadian milk producers.
AFAIK, Trump's tariffs are meant to serve the following purposes:
1. so critical supplies, like chips, will be produced domestically
2. to raise money for the treasury
3. to convince countries that have high tariffs to lower them in exchange for the US to reciprocate in lowering ours
4. to incentivize foreign manufacturers to invest in factories in the US
5. to use them as a negotiating tool for other terms favorable to US interests
These are not crazy things. We'll see how things play out.
Unions often even make this worse because they'll latch on to a monopolistic employer and then lobby with them to retain the monopoly at the expense of all the workers who are their customers rather than their employees.
That assumes the customers are price insensitive. If you're making vintage parts for hobbyists and archivists, maybe they're not; maybe they don't get a raise just because the price went up and your thing is the thing they cut out of the budget when it all won't fit anymore.
That's fine and indeed about the only way it even can be done in a country with higher wages. The question is, why can't we do more of that? Basic simple components like capacitors should be possible to automate, so what's preventing it? Why don't we have policies tuned towards causing more domestic automation?
The number of jobs won't be what it was when it was done by hand, but that's never coming back either way, and some is better than none. Meanwhile you reduce dependency on adversarial countries.
> the only real lever they have is to increase the cost of imported goods (ie tarrif them) which in turn gets consumers upset.
There is another alternative: Lower the cost of domestic goods, i.e. lower taxes or provide credits to domestic manufacturers. For example, allow capital investments in domestic manufacturing to be deducted immediately rather than over time.
This is actually one of the longstanding major problems with the US tax code right now. It creates a preference for international supply chains because that allows profits to be shifted into countries with lower tax rates and penalizes purely domestic supply chains.
In 1924 a Ford Model T cost $260. Adjusted for inflation to 2025 this is <$5000. The average new car price in 2025 is ~$50,000.
3 and 5 are undermined by the fact that even nations with positive trade surpluses with the US, and countries like Japan with Trump first term negotiated trade treaties (which for Japan included major concessions already) are being hit with these tariffs.
1 and 4 are a problem because many of the inputs into building out US manufacturing capacity come from abroad and are hit by tariffs. Secondly many of the manufacturing inputs into making products in these factories would come from abroad and be tariffed, unless those supplies are bootstrapped domestically first but there is no policy to ensure this. Thirdly as soon as the tariffs go away, these factories would become uneconomical, so they are a gamble on that not happening in the lifetime of the factories.
Finally, who’s going to build and operate this huge new manufacturing sector? Infrastructure construction relies heavily on immigrant labour that’s being driven out, so does actual manufacturing, and there are no hordes of unemployed Americans lining up for manufacturing jobs. It’s addressing a problem that largely doesn’t exist, to build out less efficient more expensive ways to make stuff, in a way that can’t work anyway.
Manufacturing investment surged in the last few years with the introduction of the CHIPS and Inflation Reduction acts. It’s going to be hard to disentangle the continuing effects of that from the effects of the Tariffs, but it’s hard to see how the Tariffs can have a positive effect.
No, supposed quality adjustments hide lower production volumes: https://www.palladiummag.com/2025/10/03/how-gdp-hides-indust...
> Motor vehicles, bodies and trailers, and parts: actual light vehicles produced down 11%, real gross output of vehicles up 39%, real value-added up 125%. Inputs as a percent of gross output rose from 74% to 77%.
> Steel mills & manufacturing from purchased steel: in raw tonnage, steel shipped is down 18%, real gross output is up 5%, real value-added is up 125%. Inputs as a percentage of gross output rose from 73% to 74%.
> If the quality adjustment is 32%, the value-added increase becomes 652%!
> Another “quirk” of real value-added is that inflation adjustments and quality adjustments get applied retroactively, which creates wild inflections from small changes. In simplified terms, let’s say that, in 1997, car sales were $100 billion, and were still $100 billion twenty years later in 2017, with no changes due to inflation or input costs. Input costs in both years were $75 billion, meaning $25 billion in value-added in both years. The only thing that changed, let’s say, was that the “quality” of cars got 10% higher thanks to software innovations like Apple CarPlay and design improvements like crumple zones for safety—neither of which add to recurring production input costs. So, let’s say, our economists would adjust the 2017 figure to be $110 billion in “real” terms and show a small 10% increase, right?
>
> Instead, the way it works is that a recent “base year” is taken, in this case 2017, and the base year is never adjusted. So rather than adjusting from $100 billion to $110 billion, the “real” output of 1997 is retroactively adjusted to be lower, in this case $91 billion, to get the same 10% increase. But then, our value-added in 1997 has fallen to $16 billion, and the increase in “real value-added manufacturing” has jumped from 10% to around 50%! We have created a 50% increase in car manufacturing not by actually producing 50% more cars or “objectively” making cars 50% better, but just by playing around with statistics and definitions.
https://www.batimes.com.ar/news/argentina/milei-is-scrapping...
Of course they encounter their own political hurdles. Think Solar, Electric Cars, CHIPS act etc. But they become political footballs, even to the detriment of local interests. (Witness Florida reps voting to repeal CHIPS even though Florida got a lot of CHIPS money.)
So yes, companies want consistency in the supply chain, and current US politics doesn't offer that.
1) People replace coffee with hot cider, infusion tea or some other local substitute good.
2) Tariff on coffee as set up by Trump incentivize coffee producing countries to buy US goods whether it’s oil or cars to make trade balance more equal.
The only question is the scale of above but tariff on coffee is unquestionably help US producers.
It seems that you're operating under the normally reasonable assumption that these policies were implemented after careful consideration with specific goals in mind. I don't think it's reasonable to assume that the people involved in this are doing what they're doing for well-thought out reasons or ones that are meant to benefit America.
>> Tariff on coffee as set up by Trump incentivize coffee producing countries to buy US goods whether it’s oil or cars to make trade balance more equal.
Countries don't buy goods, people do. Apparently insulting Canada didn't make them decide to consume more made-in-America goods. I'm not sure that random acts of insulting leads yo the effects you are proposing.
Sure there are a number of Democratic Socialists and other progressives winning elections and driving changes but everything I’ve seen policy-wise has been directly targeted areas where unchecked capitalism has clearly failed their constituents. Even in those cases, there’s no dramatic shift towards government ownership.
What was so special about 1997?
1) Stopped buying USA wine totally
2) Canceled our plans for vacations in the USA
3) Stopped buying USA orange (or any citrus) juice
4) Carefully check the provenance of any fruit or vegetable in the supermarket and actively avoid anything that comes from the USA
... and the list goes on.
I am not alone!
How do those immediate and tangible consequences serve the interests of the USA producers and companies affected, exactly?
If even if there are such ideas in new government, they quickly disappear over wine and steak dinners with the lobbyists.
Unfortunately this is not seen as bypass of democratic process. Nobody voted for having less rights and any bargaining power stripped and yet here we are.
That's where security services should come in (in many countries protection of democracy is their main statutory duty) - but they are not doing their job tax payers pay them to do.
I thought that with time Brazil would modernize and get closer to the US in that regard. It's really sad to see the opposite happening.
It's not like every single Chinese consumer decided they didn't want American soybeans. More authoritarian countries have strong import controls; helps with both having high (inefficient) employment but also your citizens aren't going to wonder why all these cool stuff (fridges, etc) are always imported and the local stuff sucks.
Nevermind that the bounds of what consumers have to buy/consume are entirely drawn and selected by investor prospectus, and business collusion, in an environment shaped by regulatory capture or selective compliance!
I'm open to accepting some blame on consumers, but trying to scapegoat them as the root of the problem is horseshit of the highest order.
MBA's and investors of the past 50 years drank deep of the draught of economic growth through regulatory arbitrage by off shoring, labor replacement above all else, and trying to chase shareholder returns over stakeholder returns. Fuck you, got mine in the socioeconomic sense.
The new NY city mayor wants to convert parks into low income housing.
https://abc7ny.com/post/mayor-adams-makes-elizabeth-street-g...
But economics shapes culture, too. There are certainly no shortage of subcultures trying to swim against the grain - buy American, local/organic food, German tool enthusiasts, even the tech community's libre software and anti-cloud. It feels like they remain subcultures because they're fundamentally fighting an uphill battle against top-down prices/advertising/etc set by large market makers. Which is why I initially took issue with your comment, framing it solely in terms of individual choice.
But the dynamic extends other places too, say the housing market with everything "move in ready" being beige, spec grade fixtures, and "fancy" appliances bought from a market for lemons. Trying to chew on that it still feels like not exactly what people prefer, but rather what people don't disprefer - the least offensive option to enable economies of scale (which once again comes down to monetary policy supporting the housing bubble, but I'm certainly not trying to ram the whole topic back into that)
Even if we pretend the policies are well-intentioned, it takes decades of investment to make the infrastructure and workforce ready to produce things locally at scale. With policies like the dismantling of department of education, I do not see any initiative being taken to prepare the workforce for the future.
Let's face it, tariffs are a disaster. The increased prices, hurt American businesses, caused job loss, and increased waste and bloat. The administration created a problem (tariff induced inflation), now they are selling the solution by rolling back tariffs to bring prices down. Anybody older than 8 years know this was the same playbook in previous administration. And they know their base is gullible eough to fall for it. It's just unfortunate that hacker news audience in included in there as well.
Interesting that you mention this. It's not exactly the same thing, but someone in another thread here on HN pointed out that the feds have been acquiring non-trivial stakes in a number of companies. More than just the one or two that I had seen in headlines.
It's funny, because it's a bigger overt push in the direction of actual socialism than the dems have ever tried, by the group of people who most love to use socialism as a boogeyman.
But the argument in favor of it seemed compelling on it's face, at least worthy of debate.
And admitting that is why SCOTUS will kill them. Raising money for the treasury is Congress' job, not the executive's.
That's what the administration has stated as the goals of them.
For example, many foreign companies have announced plans to invest in creating factories in the US. How that will eventually work out will take some time to see.
> I don't think it's reasonable to assume that the people involved in this are doing what they're doing for well-thought out reasons or ones that are meant to benefit America.
That's a pretty fantastic assumption. I cannot think of a single instance of any President imposing a policy meant to hurt America. Of course, in my opinion, a lot of Presidents have pushed policies that I regard as destructive, but they didn't mean it to be.
The DOE was created by Carter, and there is no evidence in the last 45 years of it having any positive effect on education in the US.
Any change in policy will make things worse before they get better. For example, if you have surgery to remove a tumor, you'll endure a fair amount of pain and misery before getting better.
It's probably helped in some aspects too, but the student debt crisis was created by the DOE. And most everyone can agree that college costs have ballooned in the US while the value of the degrees have decreased.
It's a perfect example of the worst of both worlds of government guarantees in a capitalist society, like Amtrak and US health care. It eliminates many aspects of competition and blurs incentives while remaining in a economy where decisions are profit-driven.
Making and shipping chips all over the world is what keeps Taiwan safe. They would never jeopardize that.
Yes, the DoE has been planting decade-scale workforce seeds since the Carter years—mostly via STEM/CTE programs that outlive administrations. Core idea: build adaptable skills (problem-solving, digital literacy, work-based learning) so kids & adults can pivot when AI/climate/whatever nukes today’s jobs.
*Carter-era kickoff* - 1979: Science and Engineering Education Act (Carter signs) → first federal push for pre-college STEM pipelines. NSF/DoE joint grants still fund teacher training 45 yrs later.
*Reagan/Bush I* - 1983 A Nation at Risk → DoE launches magnet schools & AP incentives. Many still running.
*Clinton* - 1994 School-to-Work Opportunities Act → seed money for apprenticeships. morphed into Perkins.
*Bush II* - 2006 Perkins IV → “programs of study” with stackable credentials. Still the backbone of high-school CTE.
*Obama* - 2010 Race to the Top → $4B for state STEM/CTE alignment. - 2014 Computer Science for All → CS now in 70% of HS nationwide.
*Biden* - 2022 YOU Belong in STEM + 2025 DOL/DoE joint admin of WIOA/Perkins → less red tape, more training $.
*Impact numbers* - Perkins V: 8M HS students/yr in CTE; 1.3M postsecondary. - WIOA adult ed: 1.5M/yr gain credentials. - Meta-analyses show STEM exposure → +0.2σ critical thinking, +15% lifetime earnings.
*Caveats* - Funding is ~$16B/yr total—peanuts vs GDP. - 2025 DoE staff cuts (≈50%) threaten oversight. - Europe still laps us on apprenticeships (3-yr paid tracks vs US 6-month internships).
Bottom line: DoE’s been playing the long game since disco. The programs work, but they’re chronically underpowered and politically fragile.
So subsidies, by their nature, are govt putting their finger on the scales, picking winners and losers.
And of course companies competing with those industries (coal versus solar) will lobby, and provide votes.
Bearing in mind of course that ultimately subsidies are just a tax on all citizens for the benefit of some.
So the question then is, what are you going to tax and how much? The problem right now is that we're so bad at it. To begin with the government burns money like there is no consequence to it. Huge payouts to affluent retirees who don't need the money, defense contracts for things the military doesn't even want, etc. And yes, that means you need to stick your foot up the rear end of some lobbyists. Stop being the people who say it can't be done and start being the people doing it.
> You can't (shouldn't?) subsidize all industries.
If you stop wasting preposterous amounts of money then you could lower taxes across the board and remove the anti-subsidy. But taxes are also by category anyway.
So for example, don't lower the tax rate on dividends but create new credits and deductions and faster depreciation for capital investments, or make R&D fully deductible in the first year. In other words, if you make money and use it to buy a Ferrari, you're paying tax. If you use the same money to build a factory, you get to deduct it right away. Then you're effectively subsidizing all kinds of new factories or new construction, but not subsidizing purchases of imported products. Which is like a tariff in the sense that it makes domestic products relatively more attractive, except that it does it by making things less expensive rather than more expensive.
And the rest of the world as well, as collateral damage.
There are times when it’s politically infeasible to defend the currency, even if they technically could. See the response in France to trying to raise the retirement age a bit, because their budget is in trouble.
A point. Economists like people to believe that hyper inflation lead to Hitler. When it was austerity policies at the start of the great depression 10 years later that lead to the Nazi's winning in 33. Same austerity policies in the US lead to FDR and the Democrats winning.
The presence of a few nationalistic morons doesn't wholly negate the goals mentioned by GP, and in fact, may be more important than ever.
So yes, pretty they didn’t have any money to spend on anything else. Of course bonds became worthless well before the peak in inflation.
1. That stated goals reflect real motivations
2. That every president and their administration operates with a coherent, disciplined strategy
3. That competence can be assumed by default.
Unfortunately these assumptions simply don't match anything we've seen from this administration.
There's a difference between good intentions, stated intentions, and effective execution of policy and there's nothing to indicate that these things are aligned here.
There's also nothing to indicate that the American democratic process guarantees a President who always has Americas best interests in mind and there's nothing to indicate that every person who has filled that roll has had that as their primary motivation.
Terms like "highest ever" conceal that US industrial production only grew by about 13% in the last 25 years [1]. However, in that same time, the US population increased from 281 to 340 million [2]. Meaning that per capita industrial production decreased by 6.6%.
> So really your point is not about American manufacturing, but rather American labor.
No, my point is about treating markets and the economy as if they have no effect on sovereignty or independence, and about only looking at the consumer, not the worker or the citizen.
> the only real lever they have is to increase the cost of imported goods
That's sure not the only lever that Chinese politicians have, and they took full advantage of that, first to industrialize, and now to take over industries left out to dry by their home governments who think the Free Market can do no wrong. Learned helplessness at its worst.
[1] https://fred.stlouisfed.org/series/INDPRO/
[2] https://en.wikipedia.org/wiki/Demographics_of_the_United_Sta...
HS graduation: ~75 % → 87 % (94 % including GEDs)
BA or higher, age 25+: 17 % → 38 %
Some college or associate’s: ~30 % → >60 %
Immediate college enrollment: 49 % → ~70 %
Black BA attainment roughly 3×, Hispanic 4–5×
AP/IB exams: 400 k → 5 M+