Well, the executive summary for this one is that we're probably facing VERY significant price hikes across the board that are likely to seriously impact consumers, businesses, Internet firms that build those massive data centers, basically everybody. These technologies are of course now fundamental to our everyday lives.
The administration has now announced what would be a total tariff on China of over 100%. The fact is tariffs ARE effectively taxes and they're paid by us in the importing country not by the exporting country. And part of what likely is driving a lot of confusion is that we're often getting conflicting statements and conflicting ideas about what the goals of these tariffs are.
Are they to raise money? To punish countries for their own tariff regimes? To punish countries for trade imbalances? Some combination? Tariffs WILL raise money for the government, but again that tariff money is coming from us not from those other countries. And not all trade imbalances are necessarily horrible things, they can represent the fact that the U.S. is a relatively wealthy country that can choose how and where to obtain products the most economically, especially when making them locally isn't really practical.
There are conflicting signals from the administration regarding whether the tariffs are negotiation tactics and/or if they're intended to try drive manufacturing back to the U.S., and those goals also can easily be in conflict with each other.
It's understandable why there's nostalgia toward the period many years ago when the U.S. was a manufacturing powerhouse before it moved more into the services sector over the decades. But realistically that's being somewhat viewed through rose-tinted 20/20 hindsight. Right now we're a quarter of the way into the 21st century. Not just the U.S. but the entire global trade, manufacturing, and supply chains have utterly changed since way back then, in many ways significantly to the advantage of the U.S economy overall in the long run.
Now maybe in theory, if you were willing to spend enough on factories and had workers willing to work at wages similar to those paid in countries like China for example, and you were willing to wait the years necessary to build up those factories and infrastructures -- maybe theoretically you could get some significant portion of that high tech manufacturing back, assuming stable economic signals from the government.
But is this practical? Well, there's the rub. The infrastructure, the resources (some of which like rare earths are almost completely controlled by countries like China), engineering expertise, worker structures, and all the rest do not seem as if they're likely to ever significantly return here anything like they once were.
Take the iPhone as just one example, because as I said, this affects these industries across the board. Something like 90% of iPhones are reportedly manufactured in China. It's estimated that it would take three very disruptive years, and 30 billion dollars for Apple to move just 10% of their supply chain from Asia to the U.S.
And since you can't reasonably expect U.S. workers to work for Chinese wages, plus so many other costs that are much higher here, you'd probably be looking at iPhones that could cost three times as much as they do currently.
Now the billionaires would still have those silly grins on their faces and couldn't care less about much higher prices whether from tariffs or anything else. But for ordinary consumers and even firms of pretty much every size, the effects from the kinds of price increases we're likely see from these tariffs on a vast array of tech products can't help but have major negative impacts. The additional costs to consumers and businesses will likely be dramatic and could trigger many additional negative ripple effects.
In a short report like this I can't really do more than address the tip of this giant iceberg, but the bottom line is that at least as far as the tech segment is concerned, it's very difficult to find realistically optimistic aspects to any of this. We should keep our eyes open for any positive developments of course, but this is yet another one of those situations where it's probably not a great idea to hold your breath.
Apparently a right-wing group has established a site to report professors who do not adhere to the MAGA philosophy. Please be sure that the URL is used ONLY for such reports.
It's important to note that Congress has the power to stop these tariffs. They could do so today. Right now. Of course the Republican-controlled congress is grinning all the way to the bank.
Using free generative AI is like volunteering for a lobotomy. Paying for generative AI is like paying a crackpot to wield the hook and push it into your brain.
Sen. Cory Booker's passionate speech is about 10 minutes away from breaking Strom Thurmond's record for the longest Senate floor speech, 24 hours, 18 minutes, set in 1957.
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