Hmmm Tariff on Copper and lumber, now what takes a lot of copper and lumber? I know the housing market. Geez this only gets worse. He is holding off on Pharmaceuticals but threatening 200% tariff on them. He might hold off on them for a year or so though. It looks like the uncertainty on drugs is going to cause a lot of volatility.
Make America for the Rich Again.
Tariffs are punching yourself in the face, and telling the other side you won’t stop until they punch themselves in the face.
A 200% tariff on pharmaceuticals! What will that do to the price of adrenal?
TACO.
Mickey Mouse, Donald Duck (it said I needed more characters).
With the US importing around half of it’s copper, this stick approach is gonna hurt. Housing, energy grid upgrades, data centers, oh my!
Might as well try and make some money while we’re being violated…
One would hope that US pharmaceutical companies see the merits of manufacturing in the US. Once the US had major tax incentives to make drugs in Puerto Rico. But Congress cut the incentives and they shut down. May very well still have skilled people there looking for job opportunities.
We would sure like to see generic drugs made in USA. They will be more reliable suppliers. And more likely to comply with FDA regs. Foreign inspections are always preannounced allowing much latitude they say.
Are you sure there will be FDA regs going forward? Aren’t they a “burden” on the “JCs”?
Steve
We old phartz remember the first attempts at using aluminum residential wiring. iirc, a number of fires were caused by using aluminum wire with fixtures designed for copper. There should be suitable fixtures available now. How much copper plumbing is still being used, instead of PEX tubing? Mr Google says some 80% of new home construction still using copper.
In Motown, thieves love copper plumbing. Contractors can hardly keep up with the thieves stealing the pipes as fast as they can be installed.
Steve
It would be nice if they had a clear plan rather than just a stick. I do not know how the companies can even plan with the way this is being done.
Dealbook by Andrew Ross Sorkin…my comment this is worse for the global economy than the remittance taxes.
Year, year and a half does give companies time to research and plan. When they have idle capacity that seems reasonable. Major investment might take longer.
Trump’s idea seems to be the U.S. should be self sufficient in basics of the economy like steel, aluminum, and copper. And drugs too when possible. He says for our own security/national defense. Will not be free but not a bad idea.
There are no economies of scale involved. There is no increased incentive to reinvest. Without those two things that walk hand in hand the policies are terribly destructive.
Tariff protection does offer increased profit if you can expand domestic production easily.
It does not. It means you have money to go to countries with lower tariff rates on them. Or that you pocket more of a profit.
When the taxes are higher you invest in other lines of manufacture. It is not just the one product.
When tariffs are high there is no incentive to lower prices or become more productive at home. You can not export.
It can or will cause layoffs. Meaning prices can fall for the worst of reasons: people will lack the money to buy.
They’re finding new and exciting ways to use the stick!
I agree, some sort of coherent plan that uses a stick, a carrot, maybe some jumper cables…would be better.
Sure but it isn’t an official policy, it is just an off the cuff remark. Even when we get a treaty that the President actually negotiated with Canada and Mexico, we find out later it isn’t a treaty that we can count on. Nothing can be counted on to be status quo.
Not a bad idea, from a national security perspective. But the tariffs would be phased in, to give manufacturers time to adjust.
The precipitate way tariffs are being imposed, faster than manufacturers could adjust, and in such a chaotic fashion that manufacturers don’t know what to plan for, seems more likely to simply be a money grab: take more away from the Proles, to cover another big “JC” tax cut.
Steve
There are better ways to go about this than tariffs is the real crux of the problem. Coupled with the fact this administration is constantly lying to us about who actually pays tariffs, that the media refuses to discuss this lie, and that half the country believes it… and well…
I think we might have a few members on this very forum confused about who pays tariffs.
As TIG said, there is the government subsidy way, which the previous administration was using, and the tariff way. The bottom line is it’s expensive to do anything in the US, therefore the “JCs” will not do anything unless they see a profit in it. Subsidize the daylights out of them at Prole taxpayer expense, or tariff the competition, so the Proles pay higher prices.
Steve
No. No it does not. If it did companies would have already migrated there. The only way it works is by raising import prices over domestic prices. Bad for the consumer, achievable for the business but only if they can count on continuity of policy which is obviously not true.