There are some people in my circles who have remained convinced that tariffs won’t actually amount to anything and that it’s all bluster.
It seems we’re now entering the “find out” stage, and it’s incredibly frustrating.
As a tinkerer who loves building things, this is heartbreaking stuff. I have projects in progress that may have to be put on hold.
I tend to order things as I need them, but it’s tempting to stockpile the basics. But I don’t think it will help much in the long run if this continues, and truly hope this madness will be seen for what it is and an appropriate backlash/correction will follow.
I actually moved a bunch of money around after the recovery from April 2nd. I just sat their thinking... wow, short term bonds have a really decent interest rate, and I don't think people are taking seriously the fact that the markets can actually fall apart because business is an incredibly complex, multi-variate process, and right now where just throwing wrenches into the gears for funsies.
I'm not even completely anti-tariff. I just think the way we're going about doing these tariffs is pretty much the opposite way anyone who was trying to bring manufacturing back to the US would do them. Low, clear ratcheting up tariffs are tariffs that allow businesses time to change their strategy without disrupting their income streams. Instead, we're going to bankrupt basically anyone who isn't already a multi-national.
Maybe I'm an idiot and I'm missing something clear, but to me, the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years. Other countries' markets have not fared so "efficiently."
Again, maybe I'm missing something, but I'm looking at this much more defensively than I did under the first administration. The one thing I can't figure out is the dollar. My brother is obsessed with the "dollar milkshake" theory, whereas it seems clear that we are messing with reserve status and are trying to intentionally weaken the dollar... I just don't know. It doesn't really make much sense what we're doing, and I haven't found anyone who can make an argument that makes sense to me.
The vibe on /r/wallstreetbets seems to be "this all makes sense as a massive pump and dump". Very useful source of info if you view them as essentially black boxing the stock market.
> the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years
Yes and, to your point, with an independent federal reserve. If that gets messed with, things could get much worse for the U.S..
Same as you I'm in defense mode. I exited the market in early February since something was not right. All I have (not much) sits in money market fund now at 5%.
As a Latin American, I can't help but buy the American Exceptionalism thesis, and seeing you guys in this situation humanizes you so much. The US has such a strong bureaucracy and high bar for competence that you generally lack the immune system required for detecting con artists and social climbers - at least in politics. Ask a random Argentinian or Brazilian what politicians Trump reminds them of, and you'll get a seemingly endless lists of genuinely stupid, borderline sociopath populists. Follow up with a question on what are the consequences of having arbitrary, ever-changing tariffs on most goods for the purpose of industrialization, and you'll get a laugh, then a sad face.
Import-substitution is bad for econ 101 reasons that most people who have an axe to grind against Dems would've been absolutely capable of grasping only a few years ago. Now, it seems so many are willing to turn off a part of their brains for this short-sighted wishful thinking. "Well, the official narrative is that we're doing this to get manufacturing back, so let's wait and see" is something most people would immediately perceive as bs if a Dem was sitting in the Oval Office. Seeing a politician campaign on a stupid platform, and then getting surprised he actually shoots himself in the foot spending political capital pursuing is also very Latin American.
The good part is that the soon-to-be-coming recession the federal government just fabricated out of thin air is fully self-inflicted, and therefore somewhat easy to fix. The bad part is you have (at least) 4 more years of this lunacy, so it might take a while.
I think the burden of proof is entirely on the admin in the White House who seem completely incapable of keeping their story straight and providing anything of value to sooth anyones fears other than "trust me, bro!"
> I haven't found anyone who can make an argument that makes sense to me.
The goal is to eliminate income taxes and replace it with tariffs. An added bonus (for the administration), is that tariffs can be changed if the party in question pays for access to make their case.
The stated reasoning of supporting domestic industry is a smoke screen for the above.
I don't think the metric of success is how much mfg comes back to America, it's just a simple slogan that plays well. The real movement is the mfg flocking out of China and into our allies countries.
> Tinkers are inventors, which are future entrepreneurs. This administration can't think as far ahead as its nose.
I don't see any evidence that they can't or don't think far ahead. These are people who think that "Competition is for losers". Past that, they're smart cookies.
That’s a really good point that makes this so much worse.
It’s not just that I may not be able to continue some projects, but that I may not be able to continue pushing the boundaries of my knowledge and experience as I learn more.
Thinking about this in terms of younger aspiring builders, this will stagnate the technical growth of a generation.
This getting-ahead-of-the-tax-hikes/inflation thing was probably why the segment of households with meaningful disposable income (top quintile or so) increased spending in Q1 even as everyone else was pulling back.
We did it with air conditioner upgrades, among other things. Now? Five figures of previously-probable, but optional, spending for the rest of the year is on hold indefinitely. Prices on lots of things (construction materials, holy shit) are already way up, so we'll be sitting on as much cash as we can until that eases up. We don't need that much, really....
I've been "stockpiling" car parts for years for various maintenance I need to do... I guess I should get to doing that actual maintenance but those strut springs still scare me.
When covid hit, I def sold a lot of junk that I had sitting around for years
I think hobby areas involving anything produced overseas will get utterly annihilated. Board game companies are already shutting down. That whole industry went from a multi-year boom to a bust this year due to tariffs.
I've been trying to put a TCG together, I might just get a printer and print my own cards until volume demands otherwise. At least there are still high-quality options in the US, like USPCC, but you'll pay for it.
The madness is the total reliance on cheap Chinese products, with very few or zero US alternatives. But building knowhow and sourcing rare metals will be a very tough challenge.
It seems that China has the upper hand for now, so it will be interesting to see how it plays out.
China has the upper hand and the US is being run by morons. With the US cutting itself off from the largest supplier of electronics while simultaneously destroying the basic research infrastructure that keeps America on the bleeding edge you can expect a brain drain towards Europe and Asia. The damage from this administration will last generations.
Not sure why people keep insisting that goods from China are “cheap,” which always seems to carry a negative connotation when in reality, “cheap” is exactly what we seem to want as consumers in wealthier western countries.
And in many cases, these products are neither cheap nor expensive, they’re simply the only option, because no one else in the world manufactures them. So, what exactly are we comparing them to? And if the assumption is that producing the same goods in Europe or the US would be more expensive then that’s likely true but only because we still expect to earn a living wage, even in factory jobs
The USA could bring manufacturing back, but not with tariffs.
They can't tell businesses "Look, we've dramatically increased your cost of doing business, made your products more expensive (which will likely lead to lower sales) and we're forcing you to spend extra capital by paying tariffs on your products... Now all you need to do is come up with billions of dollars to build the factories that build your product and eat the high costs for the 5 - 10 years it will take to build the factories. We don't care if you're a small business that only sells $1M of product a year, if you want to reduce your costs, you need to build the factories."
Of course, the question is whether Americans really want those factory jobs -- do parents aspire to have their children work in a factory assembling iPhones? There's only so many Robot Technician jobs to go around (despite the promise of unlimited high paid technician jobs, for the forseable future there will be plenty of menial factory jobs)
The only way for China to lose influence in this fight is by playing ball. They can simply continue to trade with the rest of the world and be totally fine when it is US consumers paying the bill.
I get what you are saying, but the U.S. BUYS goods, because we are "too rich" to make them. We SELL services, because other countries are "too poor" to offer them.
When this administration focuses solely on one side of that (Goods vs Services), they miss the forest for the trees. I'm not saying we shouldn't bring back manufacturing, because we should, but we can't pretend that we get the short end of the stick in this trade partnership.
China makes the cheap shit that isn't economical here, and the only way to make it economical here is to pay a tax on the cheap shit we want if it isn't made here, but the crazy thing is we could do a 400% tariff on Chinese imports, and it is still too expensive to buy American for most goods. Not even getting to the point that we don't have the infrastructure here because that also costs money, which would rise the price for American goods even higher.
Does Bill Gates mow his own lawn? No!
Does Donald Trump grill his own Big Mac? No!
Because when you hit a certain "wealth bracket" you stop doing things that are below that and hire them out. We hired China because we were too rich.
"Cheap foreign products are a necessity when so-called American companies don't love Americans enough to pay them what they're worth. It's the whole reason things went overseas in the first place. It's gonna be nice if we can finally get American companies to actually support America and pay citizens what they're worth."
The above sounds nice, but it's oversimplified, like a lot of political rhetoric recently. Now, if this does end up making real living wages for the American worker a commonplace thing, that's awesome, but I'm pessimistic given the history of things, how money can influence politics, and how corporate lawyers can find loopholes.
Wait till this person finds out he can't have his mandarin orange segments in his nightly Jello salad anymore and then I expect they'll have a different opinion.
I agree, and I am in favor of protectionist tariffs. But it does seem to be poor strategy to rush into high tariffs without the pieces put in the place for American industry to grow and benefit. That said, I don't believe Trump is that stupid (despite the trendy opinion to the contrary), and I think he knows this is doomed to fail if the goal is immediate American industry bloom. Which is why I don't believe these are intended to be long term. Based on how the other tariffs have gone, it seems to be more of a negotiation tactic to reduce tariffs on both sides, not protectionism. China has just put up more of a resistance to it than other nations have, so now it's turned into a game of chicken.
I just got an email this morning from ARACE, one of the main suppliers of Radxa boards for global shipping.
I ordered their Orion O6 Mini ITX board back in December, for $430.49 total ($85 shipping).
The email this morning said they had to cancel all un-shipped orders, and I could re-order and prepay the tariff through 4XL (they dropped DHL and FedEx due to tariff complications).
I put the board in my cart, and now the total is $1500.90 ($1,150 in shipping).
I'm happy to pay for the actual cost of shipping a single item across an entire ocean, but maybe that increase is a bit much...
> I'm happy to pay for the actual cost of shipping a single item across an entire ocean, but maybe that increase is a bit much...
The Import-ant thing (heh) is that the additional money you must pay is not going to the manufacturer or the shipper. It won't be improving working-conditions of foreign sweatshop laborers, or upgrading cargo ships to reduce pollution, etc.
Instead, it's going to a US government official that basically seizes goods crossing the border who won't give them back without a payment.,
Worse: These higher import-taxes all US companies and consumers are being made to pay will probably go towards the benefit of... lowering what rich Americans pay on their personal income taxes.
This made me wonder what the tariffs will do to private jets and if the 100% write off for them just includes everything or if there is more nuance there.
My point is less about where the money goes and more about not subsidizing cheap Chinese shipping.
I don't think I should be able to order a little plastic trinket for $10 shipped direct from China, when just shipping the same thing inside the US costs $10+!
In a lot of developing countries with high tariffs people end up going abroad to buy stuff and bring it back in their luggage as used of not much value. Like in Vietnam a lot of people would visit Singapore. It's funny seeing the US in that position. Maybe you'll have to visit a friend in Canada or Mexico?
De-minimis changes may make that hard, but recently I learned that there is actually an official Volvo program to create such a tariff-dodge on cars: https://www.volvocars.com/us/l/osd-tourist/ Fly you in, have you drive the car just enough that is your 'used' property, import.
I think the pay up front thing makes sense. Nobody knows who is going to actually pay / what the volume will be at the new tariff/tax point and the businesses need to find out fast / up front.
I won't defend these tariffs, or their rollout. But I will say that our dependence on Chinese manufacturing (and engineering, these days) is not good for our nation.
Free trade combined with cheap labor led to a massive loss of national capability. We outsourced 75% of the supply chain for electronics, and provided decades of free training to foreign companies. Then we pulled a surprised mug when those same companies decided that they don't need us any more.
As a parent of young kids, I'm also keenly aware of how much random plastic garbage we import - just to throw it away after maybe one use. Party favors are a big one. Families are drowning in low-cost, low-quality products that wind up in a landfill. Free trade created this situation, and I don't think it's good for anybody except importers and factory owners.
I don't know what the solution is, and the current tariffs clearly aren't it. But free trade with China hasn't exactly been great for the US in a longterm sense, and we shouldn't pretend otherwise just because we're getting cheap consumer goods.
Had tariffs been applied early when American corporations stated offshoring manufacturing to increase their profits the industry base might have been saved. But now these tariffs are just going to introduce pain to people in substantial price hikes and no company in this chaotic environment is going to put the collective trillions of dollars to building capability back in the USA. This requires a better plan.
I wonder whether you realize that the US is currently second in manufacturing capacity and far ahead of the country (Japan) in third place. (I'm not defending Trump's tariffs.)
The situation in electronics manufacturing specifically I will concede is concerning.
If your goal is to prevent cheap throw-away items from ending up in landfills, there's a straight-forward policy the Govt could adopt - just make it very expensive to send stuff to landfills (and stop the practice of sending our garbage to poor countries where it just ends polluting rivers and oceans).
This would encourage people to buy only high-quality items that are longer-lasting and are not just discarded very quickly. If it costs $200 to discard your dishwasher, maybe you will buy a high-quality product that might have a higher sticker price upfront but it has better reliability and won't break down quickly requiring you to replace it and therefore pay the hefty landfill price. This in turn would encourage manufacturers to build products with better reliability.
But how do you even know if it's actually higher quality. I find that expensive stuff breaks just as readily as cheap stuff in many cases. Speaking to dishwashers specifically in my rentals I've found that pretty much they all have similar flaws. The $1500 Bosch doesn't last longer or clean better than the $300 Frigidaire. What I've learned is that the best is to get the cheapest, but popular model with the decibel rating you want. Samsung Stormwash has been the best for me because the replacement parts are readily available. The cheaper models they keep changing parts every 6 months so it's more difficult to replace them.
>I won't defend these tariffs, or their rollout. But I will say that our dependence on Chinese manufacturing (and engineering, these days) is not good for our nation.
Not OP, but it's clear that slow, low, scheduled tariffs are how you move manufacturing. When a business say, hmm... in 5 years, we're going to be unprofitable, we should probably invest in an American fab.
This is also why you pass the tariffs through the legislature and not via some literal "emergency" order, which means that the tariffs could disappear at literally any point, and probably will if things get bad. So what's the point of investment if you have a better than 50-50 chance and you're going to feel the pain either way?
It's just exactly the opposite way anyone who is seriously trying to shift manufacturing would go about doing it. There is also some strong dollar issues, but that's really complicated.
With what we know now, or going back in time and making different decisions than what were made? offshoring isn't necessarily the wrong decision, but sending it all to one country with hostile form of government to your own does seem like a bad move. China just happened to be smart enough to develop in this way where Mexico or other Latin American countries did not, nor did other Asian countries. They are all now trying to play catch up, but only after China became THE place for all of this manufacturing.
There is no overnight solve at this point. But a solution would be working to help countries with more friendly government to your own to build up their manufacturing with the promise of guaranteed business to help prop it up by moving away from the hostile government.
Here's a different argument: there's nothing to solve in relation to Chinese manufacturing.
The US "dependence" on Chinese manufacturing is not a problem at all. It's mostly just a wedge/scapegoat/distraction issue to placate constituents who have faced decades of declining general welfare due mostly to domestic policy and not trade issues.
For example, trade policy with China didn't force the government to lower taxes on the wealthy to cut public college funding (college used to be free in California, where do y'all think Silicon Valley's innovations came from?), refuse to implement single-payer universal healthcare, or refuse to address the housing affordability crisis.
Have a diverse economy and tell corporations "no" when they want to move manufacturing to other nations. Or tell them to delist off American markets and move the actual company to the cheaper nation. They want the protections and freedom of the US economy but they don't want to pay for any of it. That's called a parasite and they aren't needed here.
The bulk of US wealth and economic strength is is high value, highly profitable services. I worked in sales support for Engineering and a 60% profit on labor was the norm. There’s a tremendous gap in low value services (restaurants) which distort the efficiency of the US economy as best reflected in a lack of social safety nets on morality grounds rather than economics. COVID stimulus proved that the nation would not collapse if the most vulnerable were subsidized, and it’s against the political machine’s interests to confront this reality.
> Families are drowning in low-cost, low-quality products that wind up in a landfill. Free trade created this situation, and I don't think it's good for anybody except importers and factory owners.
No, free trade did not create this situation. People like you did. I'm not over here drowning in useless plastic and we've lived in the same globalised world together.
especially with the recent military changes. everything I'm seeing just reeks of foreign operatives initiating plans that benefit the foreign government.
We all know this, and most people I know are all for onshoring more stuff back here as well as with friendly nations around the world. What Trump is doing is insanity, zero business acumen, zero chances of success. To bring some (certainly will never be all) manufacturing back, we could have real business incentives, ending h1b visa program, tax relief for industries that "disappeared", target tariffs and trade agreements. Instead we get some kind of shitty AI math conjured up by DOGE boys that claims "trade deficits" are the same thing as "tariffs" and whispering it into Trump's ear.
I truly believe Q2 numbers are going to be ugly and these temporary pumps in the market are very irrational. We're going to see the effects on earnings and employment from costs skyrocketing overnight. Many small businesses can't front the money for tariffs.
Market has been divorced from fundamentals since COVID IMO. Too much money with nowhere else to go and too many index fund investors really inhibit price discovery. If folks start having to cash out their 401ks, we might start seeing a decline, but even then that's a tiny % ownership of the market.
What do market models say about what happens as more and more of the "pie" shifts toward people and entities whose only demand is investments, not (a meaningful amount, proportionately, of) consumer goods or non-financial services for ordinary human wants and needs?
It's gotta be... bad, right? It seems like it'd be bad.
IMO the 2008 financial crisis was the beginning. Stock market has been following the monetary pump since then. The crisis was never solved. Now we are going to suffer a much larger one.
Since Covid? Since the 1990s when P/E ratios in tech started to hit the high 20s and 30s. What was “crazy” back then is de rigeur now, and even paltry.
Markets have been divorced from fundamentals for years before COVID. Wealth is just too concentrated in a few hands and people don't seem to understand the affect this is having on the market.
I hear this from MAGAs and I don't buy it. It seems to be their go to reason for the coming collapse of the economy from instead of the real reason of self induced stagflation caused by unhinged economic policy from a clown. I just don't buy it. Trump is deliberately attempting to bring on the 2nd Great Depression and he doesn't care because he has cash stored away enough to last several life times. He just likes playing God with the economy because cowardly republican congress members quiver in fear he might give them a thumb's down.
Time and time again we see when the investors want to see a bump, they lay people off. We have execs that openly talk about maximizing head winds by running leaner than necessary so that when the next tail wind comes the gains from the shift are as big as possible... for investors.
I'm not excited to see how an administration that seems to enjoy manipulating market swings pairs with investors that treat the labor force as a stock price lever.
The market should discount all future cash flows so as long as we end up in a more normal place the results of any one quarter don’t really matter. But yeah, the market is assuming this all resolves itself in relatively short order, which may not be the case. Whether or not the response is rational… depends how quickly it resolves.
The model is likely based on fundamental economic factors and rational decision making. The latter is why Q1 ended up with -0.3% growth. You could call this the Trump effect.
and as the article says it's going to cause prices to shoot up so even if they have the cash, some dongle that would sell at $10 might not sell as well at $30, so they aren't even going to be able to e.g. borrow money to float until they can sell the goods.
> products we couldn’t manufacture ourselves even if we wanted to, since the vendor has well-deserved IP protections
That's something I hadn't though about in the context of tariffs with interesting implications.
Does following IP rules mean that any products and technologies that wont manufacturer in the US but holds IP protections become subject to a permanent tariff? Giving countries a permanent 125% advantage over US businesses when using that IP?
Other countries wouldn't get a permanent 125% advantage over the U.S. They have zero involvement with the tariff because it's the importer who pays it to the U.S. Treasury when the cargo arrives in the U.S. In the case where it's a single-source, IP-protected item, the tariff is largely irrelevant to the country that produces it. People will buy it if it's a necessary item. The tariff doesn't give them a reason to adjust the price up or down or do anything different at all. They sell to their U.S. wholesale customer at the same price, that wholesale customer pays the tariff, and then the wholesale customer either passes the tariff through to the retail customer or charges multiples to maintain the same profit margin percentage.
In the absence of IP protections, it would hurt the countries with the highest tariffs on their products because there would be an incentive to produce an equivalent product domestically or source it from another country whose products are taxed at a lower rate. In practice, it still doesn't work out to impose broad tariffs because no one has a fully domestic supply chain. It really only makes sense to tariff very specific items in new-ish markets where you have a foreign player whose government is subsidizing production, e.g. Chinese EV's, Chinese EV batteries, solar panels, etc.
What do you call necessary? What about non-necessary items? What about IP that improves manufacturing efficiency by 5% in some process? Better battery tech? Better UI? Better chips? Better sensors? In some cases the answer is yes, in some cases the answer is no. If the answer is yes then the US pays 125% more for that item, if the answer is no then the US has worse efficiency, worse prices, worse technologies.
You talk in absolute which makes me feel like you're missing all the nuances at play.
It's the buyers in the other countries who get the "125%" permanent advantage, not the sellers. Sure, it doesn't affect you if you're TCL making flat-panel displays. It affects you if you're buying flat-panel displays to incorporate into your product, by making your product a lot more expensive.
I wouldn't call it logical for the US to lose all the IP protections they benefit from. But I doubt the international community would mind if suddenly American IP became free after the US withdrew itself from international trade.
Based on what? They’re going up and down every day. And the Trump administration is clearly desperate enough for a deal with China to be caught lying about engaging in talks.
As far as the Trump administration goes, there doesn't seem to be a coherent plan. Among themselves they can't even decide if they were or were not already negotiating with China.
I've yet to see someone who is a part of the administration who is clearly educated about trade making an coherent argument about the tariffs.
I watched the UK/US press conference this morning. Lutnick is infuriating. Anything remotely resembling an explanation or justification for 'tariffs' devolves in to obsequeous praise of how great Trump is. It's as if they can't function for an hour or two without overtly proclaiming the wonder of Trump.
"Jamison and I working together couldn't have put this deal together in 3 years, but President Trump was able to pull this off in less than 45 days!" (paraphrasing but IIRC it was pretty close).
I feel like a broken record, but it makes perfect sense if you ask yourself, what would Putin want?
Putin would love the US government destroying large portions of its economy for no discernible gain. I think Putin probably encouraged Trump by telling him all the idiotic things he keeps repeating like how the trade deficit shows the US is getting ripped off. Or that huge tariffs will bring manufacturing back to the US. Or that countries would be lining up to make a deal.
But no actual sane person can explain the end game because anyone with even a basic understanding of economics and trade knows that none of those things are or were ever true.
I think the plan is to consolidate power at any cost. If people are too broke and scared to resist, it's a win for them. The claims that tariffs will help the economy or kidnapping citizens and judges will protect national security, is just a nonsense excuse.
I think this because the right wing think tanks published that Project 2025 plan and it's clearly being followed even though Trump lied and said he wasn't aware of it
If a business in France uses tech X imported from China, and a competing US business uses the same tech X imported from China but has to pay 145% more than the French company, is that not an advantage they have over the US company?
If you're a business used to selling at a certain price point, and the value proposition is established with your customers .... do you bother risking shattering that expectation if the future is unknown?
Do you risk customers saying "Oh crap my hobby that I did with Adafruit is now untenable ... well I'm out." vs "Well they're low on stock, I'll check back when this is all over."
I don't know if it is all or nothing but it seems like there's a lot of risk either way.
I worked with a lot of ecomm and especially crowdfunded companies that shipped to 100+ countries. Outside of the US, most consumers expect to have to pay import fees as a separate line item.
But this is new for US consumers. My hope is that US companies will add temporary price increases if they can't eat the tariffs in their existing margins and then reduce when tariffs are reduced. But my guess is that most companies will increase prices, blame the tariffs (rightfully so), but then not fully reduce prices if/when the tariffs decrease.
It's similar to what happened with tipping for takeout food during Covid. It's now a permanent tax.
> Outside of the US, most consumers expect to have to pay import fees as a separate line item.
Only if you buy from a foreign store directly which is relatively niche. It's much more common for an importer to pay the duties and then put the product in local stores.
On a podcast I listened to yesterday (Marketplace, from American Public Media), they mentioned that many businesses seem to be approaching this with an "We're in this together" type of attitude. They played some audio clips of business owners on their social media channels saying things like, "Don't worry [company name] is going to do absolutely everything to fight this. We'll do everything we can to avoid raising prices on you!"
The reality, of course, which they reveal when interviewed, is that they know they're completely powerless. In the best case, all they can do is delay the inevitable and they know it. This approach exists purely to keep themselves from being made into the enemy. As you noted, some business owners admitted to considering if they should just shutter their business too.
A company can do that on a few SKUs, but not their entire catalog. Pausing your entire revenue stream for more than a very short period means laying off staff, breaking leases, ending dividends (if you give them), taking a stock price hit (if you are public) etc. It's potentially a fatal move. Better to lose some customers than fold completely.
Part of what I'm referencing is that you don't know how much "lose some customers" even is. And if you buy stock and pay the tariffs, you might have stock that almost nobody wants...
When freight rates skyrocketed due to fuel prices, freight companies added a fuel surcharge, which reflects the additional cost of moving your product. Retailers need to do the same thing with the Republican Tariffs.
And if you're big enough and you do that, you get bullied into submission by the White House. It's really hard to look at this administration's economic policies and not wonder whether there is deliberate sabotage going on. The best case scenario is these people are woefully uninformed and incompetent. These tariffs will hurt consumers, destroy small businesses, and simultaneously have the potential to enrich the largest players in the market. This never would have happened if our population was better educated and particularly more financially literate.
I think it is a good choice to be transparent. I 100% agree with that. But I don't know that it really changes the "I'm out" dynamic or risk that they won't just show up again.
Also if there's a lot of "I'm out" you just bought a lot of stuff nobody wants to pay anything near the cost of.
Yeah, I don't know why any business with the capacity wouldn't be being explicit about this. If you're going to get hate, might as well try to point the hate in the right direction. It makes absolutely no sense to fall on that particular sword.
Yeah I would've expected that like other companies they'd buy sparingly and see what happens. That said, 42 units seems low for them, so maybe they nominally ship hundreds/thousands of that device and are doing a "magic number" trial run.
I switched to Aisler who are in Germany. They're certainly more expensive than China but still way less than quick turn options in the US. There will still be tariffs but they won't be nearly as high. There are also smaller PCB vendors in China other than the "big two" of JLCPCB and PCBWay that are willing to be a bit more flexible and not charge the max possible duty upfront via DDP incoterms.
I tried to order a few small parts off aliexpress from a seller I've used before. I knew I'd be paying a tariff but I was prepared to eat the cost. Turns out the seller just doesn't sell to the US anymore. Can't say I blame them.
Oshpark is still decent for small PCBs, since they are made in the US.
From what I’ve seen the biggest impact is just the carriers requiring a huge fee (relative to my $40 worth of PCBs) just to deal with the tariffs at all. I almost wonder if there’s a profitable side gig for someone couriering PCBs from Canada -> US, mailing them, and then flying back. A single suitcase can carry a LOT of PCBs. Obviously declaring it all still but just structured as a single import so the fees as a percentage would go down.
Readit News
It seems we’re now entering the “find out” stage, and it’s incredibly frustrating.
As a tinkerer who loves building things, this is heartbreaking stuff. I have projects in progress that may have to be put on hold.
I tend to order things as I need them, but it’s tempting to stockpile the basics. But I don’t think it will help much in the long run if this continues, and truly hope this madness will be seen for what it is and an appropriate backlash/correction will follow.
I'm not even completely anti-tariff. I just think the way we're going about doing these tariffs is pretty much the opposite way anyone who was trying to bring manufacturing back to the US would do them. Low, clear ratcheting up tariffs are tariffs that allow businesses time to change their strategy without disrupting their income streams. Instead, we're going to bankrupt basically anyone who isn't already a multi-national.
Maybe I'm an idiot and I'm missing something clear, but to me, the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years. Other countries' markets have not fared so "efficiently."
Again, maybe I'm missing something, but I'm looking at this much more defensively than I did under the first administration. The one thing I can't figure out is the dollar. My brother is obsessed with the "dollar milkshake" theory, whereas it seems clear that we are messing with reserve status and are trying to intentionally weaken the dollar... I just don't know. It doesn't really make much sense what we're doing, and I haven't found anyone who can make an argument that makes sense to me.
Yes and, to your point, with an independent federal reserve. If that gets messed with, things could get much worse for the U.S..
Import-substitution is bad for econ 101 reasons that most people who have an axe to grind against Dems would've been absolutely capable of grasping only a few years ago. Now, it seems so many are willing to turn off a part of their brains for this short-sighted wishful thinking. "Well, the official narrative is that we're doing this to get manufacturing back, so let's wait and see" is something most people would immediately perceive as bs if a Dem was sitting in the Oval Office. Seeing a politician campaign on a stupid platform, and then getting surprised he actually shoots himself in the foot spending political capital pursuing is also very Latin American.
The good part is that the soon-to-be-coming recession the federal government just fabricated out of thin air is fully self-inflicted, and therefore somewhat easy to fix. The bad part is you have (at least) 4 more years of this lunacy, so it might take a while.
The goal is to eliminate income taxes and replace it with tariffs. An added bonus (for the administration), is that tariffs can be changed if the party in question pays for access to make their case.
The stated reasoning of supporting domestic industry is a smoke screen for the above.
Tinkers are inventors, which are future entrepreneurs. This administration can't think as far ahead as its nose.
I don't see any evidence that they can't or don't think far ahead. These are people who think that "Competition is for losers". Past that, they're smart cookies.
It’s not just that I may not be able to continue some projects, but that I may not be able to continue pushing the boundaries of my knowledge and experience as I learn more.
Thinking about this in terms of younger aspiring builders, this will stagnate the technical growth of a generation.
We did it with air conditioner upgrades, among other things. Now? Five figures of previously-probable, but optional, spending for the rest of the year is on hold indefinitely. Prices on lots of things (construction materials, holy shit) are already way up, so we'll be sitting on as much cash as we can until that eases up. We don't need that much, really....
When covid hit, I def sold a lot of junk that I had sitting around for years
It seems that China has the upper hand for now, so it will be interesting to see how it plays out.
And in many cases, these products are neither cheap nor expensive, they’re simply the only option, because no one else in the world manufactures them. So, what exactly are we comparing them to? And if the assumption is that producing the same goods in Europe or the US would be more expensive then that’s likely true but only because we still expect to earn a living wage, even in factory jobs
They can't tell businesses "Look, we've dramatically increased your cost of doing business, made your products more expensive (which will likely lead to lower sales) and we're forcing you to spend extra capital by paying tariffs on your products... Now all you need to do is come up with billions of dollars to build the factories that build your product and eat the high costs for the 5 - 10 years it will take to build the factories. We don't care if you're a small business that only sells $1M of product a year, if you want to reduce your costs, you need to build the factories."
Of course, the question is whether Americans really want those factory jobs -- do parents aspire to have their children work in a factory assembling iPhones? There's only so many Robot Technician jobs to go around (despite the promise of unlimited high paid technician jobs, for the forseable future there will be plenty of menial factory jobs)
I still think this approach to addressing that issue is complete madness.
Not only is there no coherent plan for how that reliance will be reduced, but we’ve now crippled ourselves in the meantime.
When this administration focuses solely on one side of that (Goods vs Services), they miss the forest for the trees. I'm not saying we shouldn't bring back manufacturing, because we should, but we can't pretend that we get the short end of the stick in this trade partnership.
China makes the cheap shit that isn't economical here, and the only way to make it economical here is to pay a tax on the cheap shit we want if it isn't made here, but the crazy thing is we could do a 400% tariff on Chinese imports, and it is still too expensive to buy American for most goods. Not even getting to the point that we don't have the infrastructure here because that also costs money, which would rise the price for American goods even higher.
Does Bill Gates mow his own lawn? No!
Does Donald Trump grill his own Big Mac? No!
Because when you hit a certain "wealth bracket" you stop doing things that are below that and hire them out. We hired China because we were too rich.
"Cheap foreign products are a necessity when so-called American companies don't love Americans enough to pay them what they're worth. It's the whole reason things went overseas in the first place. It's gonna be nice if we can finally get American companies to actually support America and pay citizens what they're worth."
The above sounds nice, but it's oversimplified, like a lot of political rhetoric recently. Now, if this does end up making real living wages for the American worker a commonplace thing, that's awesome, but I'm pessimistic given the history of things, how money can influence politics, and how corporate lawyers can find loopholes.
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I ordered their Orion O6 Mini ITX board back in December, for $430.49 total ($85 shipping).
The email this morning said they had to cancel all un-shipped orders, and I could re-order and prepay the tariff through 4XL (they dropped DHL and FedEx due to tariff complications).
I put the board in my cart, and now the total is $1500.90 ($1,150 in shipping).
I'm happy to pay for the actual cost of shipping a single item across an entire ocean, but maybe that increase is a bit much...
The Import-ant thing (heh) is that the additional money you must pay is not going to the manufacturer or the shipper. It won't be improving working-conditions of foreign sweatshop laborers, or upgrading cargo ships to reduce pollution, etc.
Instead, it's going to a US government official that basically seizes goods crossing the border who won't give them back without a payment.,
Worse: These higher import-taxes all US companies and consumers are being made to pay will probably go towards the benefit of... lowering what rich Americans pay on their personal income taxes.
I don't think I should be able to order a little plastic trinket for $10 shipped direct from China, when just shipping the same thing inside the US costs $10+!
Free trade combined with cheap labor led to a massive loss of national capability. We outsourced 75% of the supply chain for electronics, and provided decades of free training to foreign companies. Then we pulled a surprised mug when those same companies decided that they don't need us any more.
As a parent of young kids, I'm also keenly aware of how much random plastic garbage we import - just to throw it away after maybe one use. Party favors are a big one. Families are drowning in low-cost, low-quality products that wind up in a landfill. Free trade created this situation, and I don't think it's good for anybody except importers and factory owners.
I don't know what the solution is, and the current tariffs clearly aren't it. But free trade with China hasn't exactly been great for the US in a longterm sense, and we shouldn't pretend otherwise just because we're getting cheap consumer goods.
The situation in electronics manufacturing specifically I will concede is concerning.
Chart: https://upload.wikimedia.org/wikipedia/commons/a/ad/Average_...
This would encourage people to buy only high-quality items that are longer-lasting and are not just discarded very quickly. If it costs $200 to discard your dishwasher, maybe you will buy a high-quality product that might have a higher sticker price upfront but it has better reliability and won't break down quickly requiring you to replace it and therefore pay the hefty landfill price. This in turn would encourage manufacturers to build products with better reliability.
How would you solve it differently?
This is also why you pass the tariffs through the legislature and not via some literal "emergency" order, which means that the tariffs could disappear at literally any point, and probably will if things get bad. So what's the point of investment if you have a better than 50-50 chance and you're going to feel the pain either way?
It's just exactly the opposite way anyone who is seriously trying to shift manufacturing would go about doing it. There is also some strong dollar issues, but that's really complicated.
There is no overnight solve at this point. But a solution would be working to help countries with more friendly government to your own to build up their manufacturing with the promise of guaranteed business to help prop it up by moving away from the hostile government.
The US "dependence" on Chinese manufacturing is not a problem at all. It's mostly just a wedge/scapegoat/distraction issue to placate constituents who have faced decades of declining general welfare due mostly to domestic policy and not trade issues.
For example, trade policy with China didn't force the government to lower taxes on the wealthy to cut public college funding (college used to be free in California, where do y'all think Silicon Valley's innovations came from?), refuse to implement single-payer universal healthcare, or refuse to address the housing affordability crisis.
If we only tariffed China, this argument would hold water. Instead, we’re handing every country’s imports to China on a platter.
The resulting inflation has lowered the purchasing power of the vulnerable and increased the wealth gap.
No, free trade did not create this situation. People like you did. I'm not over here drowning in useless plastic and we've lived in the same globalised world together.
What does this mean?
The clearer wording is probably:
>Then we were surprised when those same companies decided that they don't need us any more.
It's gotta be... bad, right? It seems like it'd be bad.
What?
I'm not excited to see how an administration that seems to enjoy manipulating market swings pairs with investors that treat the labor force as a stock price lever.
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This estimate was produced today (May 8), and represents increasing GDP growth vs. the previous estimate
The model is likely based on fundamental economic factors and rational decision making. The latter is why Q1 ended up with -0.3% growth. You could call this the Trump effect.
https://www.atlantafed.org/cqer/research/gdpnow/archives
This wild of a swing makes me re-assess depending on this data for anything.
This is going to smash the cash flow of so many small businesses
I wonder how much stuff is going to be completely wasted by this process.
Very exciting that we can't predict how much extra we'll pay by the time our orders hit the shores.
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That's something I hadn't though about in the context of tariffs with interesting implications.
Does following IP rules mean that any products and technologies that wont manufacturer in the US but holds IP protections become subject to a permanent tariff? Giving countries a permanent 125% advantage over US businesses when using that IP?
What's the plan here?
In the absence of IP protections, it would hurt the countries with the highest tariffs on their products because there would be an incentive to produce an equivalent product domestically or source it from another country whose products are taxed at a lower rate. In practice, it still doesn't work out to impose broad tariffs because no one has a fully domestic supply chain. It really only makes sense to tariff very specific items in new-ish markets where you have a foreign player whose government is subsidizing production, e.g. Chinese EV's, Chinese EV batteries, solar panels, etc.
What do you call necessary? What about non-necessary items? What about IP that improves manufacturing efficiency by 5% in some process? Better battery tech? Better UI? Better chips? Better sensors? In some cases the answer is yes, in some cases the answer is no. If the answer is yes then the US pays 125% more for that item, if the answer is no then the US has worse efficiency, worse prices, worse technologies.
You talk in absolute which makes me feel like you're missing all the nuances at play.
Based on what? They’re going up and down every day. And the Trump administration is clearly desperate enough for a deal with China to be caught lying about engaging in talks.
My assumption has been they're here for four years at most.
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As far as the Trump administration goes, there doesn't seem to be a coherent plan. Among themselves they can't even decide if they were or were not already negotiating with China.
I've yet to see someone who is a part of the administration who is clearly educated about trade making an coherent argument about the tariffs.
"Jamison and I working together couldn't have put this deal together in 3 years, but President Trump was able to pull this off in less than 45 days!" (paraphrasing but IIRC it was pretty close).
Putin would love the US government destroying large portions of its economy for no discernible gain. I think Putin probably encouraged Trump by telling him all the idiotic things he keeps repeating like how the trade deficit shows the US is getting ripped off. Or that huge tariffs will bring manufacturing back to the US. Or that countries would be lining up to make a deal.
But no actual sane person can explain the end game because anyone with even a basic understanding of economics and trade knows that none of those things are or were ever true.
I think this because the right wing think tanks published that Project 2025 plan and it's clearly being followed even though Trump lied and said he wasn't aware of it
…
This makes zero sense.
If you're a business used to selling at a certain price point, and the value proposition is established with your customers .... do you bother risking shattering that expectation if the future is unknown?
Do you risk customers saying "Oh crap my hobby that I did with Adafruit is now untenable ... well I'm out." vs "Well they're low on stock, I'll check back when this is all over."
I don't know if it is all or nothing but it seems like there's a lot of risk either way.
But this is new for US consumers. My hope is that US companies will add temporary price increases if they can't eat the tariffs in their existing margins and then reduce when tariffs are reduced. But my guess is that most companies will increase prices, blame the tariffs (rightfully so), but then not fully reduce prices if/when the tariffs decrease.
It's similar to what happened with tipping for takeout food during Covid. It's now a permanent tax.
Only if you buy from a foreign store directly which is relatively niche. It's much more common for an importer to pay the duties and then put the product in local stores.
The reality, of course, which they reveal when interviewed, is that they know they're completely powerless. In the best case, all they can do is delay the inevitable and they know it. This approach exists purely to keep themselves from being made into the enemy. As you noted, some business owners admitted to considering if they should just shutter their business too.
It is fair, and the consumer deserves to know.
Consumers ... going to have to learn something new.
If you're small enough I guess you might get a way with it, if you're big enough you'll be threatened into compliance.
Either way the US customers and the rest of the world lose, everyone is a little poorer because of these tariffs.
Also if there's a lot of "I'm out" you just bought a lot of stuff nobody wants to pay anything near the cost of.
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Biggest tax hike in my lifetime.
From what I’ve seen the biggest impact is just the carriers requiring a huge fee (relative to my $40 worth of PCBs) just to deal with the tariffs at all. I almost wonder if there’s a profitable side gig for someone couriering PCBs from Canada -> US, mailing them, and then flying back. A single suitcase can carry a LOT of PCBs. Obviously declaring it all still but just structured as a single import so the fees as a percentage would go down.