Beging manufacturing back

3,410 Views | 38 Replies | Last: 8 mo ago by Pinochet
jamey
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Bah, typo in the title, Bring Manufacturing Back


I'm not a Tucker fan but here's a recent lengthy interview with Bessent, too long to summarize but I'd like to talk about this idea of bringing manufacturing back.

Bessent did agree that tarrifs will cause prices to increase, something Trump has said won't happen. In his example, he said a 10% tariff would give rise to a 1 time ~2% price increase

Back to bringing manufacturing back. I have aerious questions.

1. Wheres the labor force suppose to come from, particularly considering it's to replace cheap labor over seas? We don't have Chinas slave labor

2. Why would a company invest the massive amounts of capital expenditure required to bring manufacturing back to the US based on 1 POTUS executive orders and less than 1 term remaining?

3. Apparently the DOGE team savings won't be savings, but rather a partial offset to reducing taxes per Bessent.

4. Everything from not losing seats to get all this passed, plus the tax bill it all seems like a high impossibility under a single 4 year term. It takes years to move manufacturing bases. Doesn't Trump need the democrats?

amercer
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Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.
jamey
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amercer said:

Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.


Another good point. There's also a point that some chunk of manufacturing is going more and more towards robotics. I assume AI will accelerate this

That said, I do agree certain things we need here for national security, or we at least need the capability that can be ramped up.

This is very much how a lot of our defense capabilities work. It's much like government subsidized weapons engineering with standard annual production capability
Mr.Milkshake
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amercer said:

Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.


Try this without deficit spend over the last 16 years
Sims
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amercer said:


There is a reason that we are the richest country in the world


Says the country $35,000,000,000,000 in debt.
BucketofBalls99
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I don't think we will end up with as many factories as people think. I think these tariff negotiations will keep a lot still overseas but we will get a few new factories here and they will be on the news and big wins for Trump. After a handful of these big wins, the news of it all will fade off and everyone will forget about it. It's all about the tariffs to negotiate and ultimately get the lopsided trading more back to as even as possible…imo
Senator Blutarski
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themissinglink
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BucketofBalls99 said:

I don't think we will end up with as many factories as people think. I think these tariff negotiations will keep a lot still overseas but we will get a few new factories here and they will be on the news and big wins for Trump. After a handful of these big wins, the news of it all will fade off and everyone will forget about it. It's all about the tariffs to negotiate and ultimately get the lopsided trading more back to as even as possible…imo
I think this will have a minimal impact on US manufacturing investment. Nobody is expecting tariffs to be a long term thing. If Trump keeps tariffs near the proposed levels, he'll drag the US deep into a recession, and whatever Democrat wins the White House in 2028 will promise to repeal the tariffs Day 1. If you build a manufacturing facility now because of tariffs, your business will get trounced in 4 years when markets open back up. Very few investments make sense under those circumstances.
jamey
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themissinglink said:

BucketofBalls99 said:

I don't think we will end up with as many factories as people think. I think these tariff negotiations will keep a lot still overseas but we will get a few new factories here and they will be on the news and big wins for Trump. After a handful of these big wins, the news of it all will fade off and everyone will forget about it. It's all about the tariffs to negotiate and ultimately get the lopsided trading more back to as even as possible…imo
I think this will have a minimal impact on US manufacturing investment. Nobody is expecting tariffs to be a long term thing. If Trump keeps tariffs near the proposed levels, he'll drag the US deep into a recession, and whatever Democrat wins the White House in 2028 will promise to repeal the tariffs Day 1. If you build a manufacturing facility now because of tariffs, your business will get trounced in 4 years when markets open back up. Very few investments make sense under those circumstances.


That's how I think most
companies will take it. I don't see much moving here unless the Ds and Rs all get on the same page together.....lol

MRB10
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Sims said:

amercer said:


There is a reason that we are the richest country in the world


Says the country $35,000,000,000,000 in debt.


Best horse in the glue factory. LFG.
pocketrockets06
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I think the other piece that goes missing is there is no magic switch for large factories. The large petrochemical I work for decided in 2020 to greenlight a new cracker. It will come on line in 2027. So if we decided now to build in the US instead, that cracker wouldn't be here until 2032. 7 years of tariffs at this level would bankrupt the company before it got built.
jamey
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pocketrockets06 said:

I think the other piece that goes missing is there is no magic switch for large factories. The large petrochemical I work for decided in 2020 to greenlight a new cracker. It will come on line in 2027. So if we decided now to build in the US instead, that cracker wouldn't be here until 2032. 7 years of tariffs at this level would bankrupt the company before it got built.


Yep, even less technical manufacturing that relies on a lot of low wage manual labor can take a year or so to get ramped up
YouBet
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I'll beat this dead horse but you aren't going to bring back manufacturing of non-critical staple goods without large price increases to consumers. You either get to have cheap stuff made overseas with cheap labor or you get to have much higher price stuff made here with expensive labor.
FRESH CLEMENTINES
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n/a
Sapper Redux
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Even if you completely shut down international trade, our manufacturing employment might go from 10% to 13%. And the factories would all be automated. If the concern was for critical manufacturing, then you'd support the CHIPS Act and expand it without shutting down trade.
Dr. Doctor
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I'll add another line from design and operations on chemical plants.

The plants from the 70's and 80's are DWARFED by new plants. Ammonia world scale plants used to be 600 tonnes/day and have about 300 people working there. Newest plant just built is ~150 or less. Making 3000 tonnes/day. And i could probably drop like 20 or so people if i wanted to. Blue collar, operator work. Making good money.

Other plants are like that. Polymer plants from the 90's vs. today are similar trends. Refinery size in the US gulf Coast vs other plants. Take denver vs. railing or trucking in fuel. Which is cheaper and easier?

So productivity is up, but 5 small plants with 1,500 people vs. 1 big plant and 150ish people (Ammonia example). Who's going to invest in smaller plants to employ lots of people for no reason?

~egon
YouBet
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Sapper Redux said:

Even if you completely shut down international trade, our manufacturing employment might go from 10% to 13%. And the factories would all be automated. If the concern was for critical manufacturing, then you'd support the CHIPS Act and expand it without shutting down trade.


I'm 100% in on bringing critical manufacturing back to these shores - chips, pharma, food, steel, etc. The CHIPS Act was the one piece of legislation I supported in the last admin because of this (even with all of its warts).

The problem is that we can't even do that well because the bureaucracy and stupidity of our government screws everything up. Realizing that standing up a new chip facility takes years, my last check in on those efforts out of this bill still have made little progress. The announced plants we heard out of that are already over budget and behind on timelines.

Now go look at the Infrastructure Bill which by its name would suggest that we are addressing critical, foundational projects that would bolster us in this bold new world of de-globalization. What do we have to show from that? Nothing so far that anyone can point to. Maybe someone can prove me wrong here.
ag94whoop
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Certain types of manufacturing may come back like technology.
There is already a lot of it here with GlobalWafers building in Sherman, TSMC building in Arizona, all the TI and Intel stuff etc.
So I see that sector growing again.

I can also see bringing back steel and aluminum manufacturing.

I DONT see soft goods and textiles coming back.

To me the best way to use the tariffs would be to structure them to promote the growth of our US farmers, especially private farms and ranches.
Also O&G needs to be promoted if he follows up on his drill drill drill promise. Tariff management could help there.

Blanket tariffs long term are a mistake imo. But very targeted
QBCade
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As others have said, I don't see it in any meaningful way. Takes a lot of capital and time to start anew and why do that when likely things change in 4yrs or less.

IMO, Trump either needs to negotiate better reciprocal trade deals and call it a day or, keep the Tariffs and eliminate income taxes. Can't do both unless you want to destroy the economy.
Sapper Redux
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YouBet said:

Sapper Redux said:

Even if you completely shut down international trade, our manufacturing employment might go from 10% to 13%. And the factories would all be automated. If the concern was for critical manufacturing, then you'd support the CHIPS Act and expand it without shutting down trade.


I'm 100% in on bringing critical manufacturing back to these shores - chips, pharma, food, steel, etc. The CHIPS Act was the one piece of legislation I supported in the last admin because of this (even with all of its warts).

The problem is that we can't even do that well because the bureaucracy and stupidity of our government screws everything up. Realizing that standing up a new chip facility takes years, my last check in on those efforts out of this bill still have made little progress. The announced plants we heard out of that are already over budget and behind on timelines.

Now go look at the Infrastructure Bill which by its name would suggest that we are addressing critical, foundational projects that would bolster us in this bold new world of de-globalization. What do we have to show from that? Nothing so far that anyone can point to. Maybe someone can prove me wrong here.


I think there's genuine change that needs to happen around zoning and environmental review. Europe is able to address environmental degradation and climate challenges while still getting critical infrastructure built. It can be done. We've created new layers at every level that need to be overhauled. I don't trust Trump to do it in an intelligent manner, but maybe I can be pleasantly surprised.
Sapper Redux
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QBCade said:

As others have said, I don't see it in any meaningful way. Takes a lot of capital and time to start anew and why do that when likely things change in 4yrs or less.

IMO, Trump either needs to negotiate better reciprocal trade deals and call it a day or, keep the Tariffs and eliminate income taxes. Can't do both unless you want to destroy the economy.


How can income taxes be eliminated? Tariffs aren't going to come close to covering that. And Trump negotiated an updated NAFTA in his first term and immediately threw that out to attack Mexico and Canada, so which countries and businesses are going to trust the results of any negotiation with him?
jamey
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I remember getting my low wage labor type manufacturing plant shut down because this large machine did not have what amounted to a toaster oven seal of approval

So I had to send 80 people home for a few days while we convinced the government this 2 million dollar machine wasn't a toaster oven

I forget the name of this seal of approval they were looking for but my IE said it's something more appropriate for a toster or perhaps a kitchen blender
QBCade
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Sapper Redux said:

QBCade said:

As others have said, I don't see it in any meaningful way. Takes a lot of capital and time to start anew and why do that when likely things change in 4yrs or less.

IMO, Trump either needs to negotiate better reciprocal trade deals and call it a day or, keep the Tariffs and eliminate income taxes. Can't do both unless you want to destroy the economy.


How can income taxes be eliminated? Tariffs aren't going to come close to covering that. And Trump negotiated an updated NAFTA in his first term and immediately threw that out to attack Mexico and Canada, so which countries and businesses are going to trust the results of any negotiation with him?


I'm not disagreeing. I'm just saying that Tariffs are a tax essentially and we need a huge tax break or elimination of income tax. Also, Trump has thrown out this idea.

Do I expect that to happen (elim of income tax)? No
stallion6
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amercer said:

Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.
You do know that the US is only second to China in manufacturing right? It is not like we are starting from ground zero.
jamey
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stallion6 said:

amercer said:

Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.
You do know that the US is only second to China in manufacturing right? It is not like we are starting from ground zero.


China produces much of the cheap / slave labor rate products


We don't have cheap / slave labor

I was GM of a manufacturing plant in Arizona that used low wage labor, lowest in Maricopa County. The only reason China did not take our peoduct line was because shipping was problematic


I was as strict as I could be within the law to avoid illegals in the plant even though they're the far, far better employees than their legal counter part willing to work for a low wage.

We don't have the labor force to bring low wage labor products back. I've seen the bottom of that barrell
amercer
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stallion6 said:

amercer said:

Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.
You do know that the US is only second to China in manufacturing right? It is not like we are starting from ground zero.


Right, we already do the manufacturing that makes sense to do here. My company manufactures in the US. The company we use probably has 400 employees, and about 40 of them do the actual on the floor manufacturing work. Of those 40, all have bachelor's degrees, and the supervisors have masters or PhDs .
Jeeper79
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amercer said:

stallion6 said:

amercer said:

Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.
You do know that the US is only second to China in manufacturing right? It is not like we are starting from ground zero.


Right, we already do the manufacturing that makes sense to do here. My company manufactures in the US. The company we use probably has 400 employees, and about 40 of them do the actual on the floor manufacturing work. Of those 40, all have bachelor's degrees, and the supervisors have masters or PhDs .
Funny how that works, isn't it? I mean… there's a reason your toaster doesn't say "Made in America". We should stop pretending like it should.
clobby
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OldShadeOfBlue
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Sims said:

amercer said:


There is a reason that we are the richest country in the world


Says the country $35,000,000,000,000 in debt.
It's not really debt if you never pay it back
jh0400
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Any elimination of income taxes in favor of a consumption tax through tariffs would disproportionately impact the lower and middle classes. NFW that happens.
QBCade
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jh0400 said:

Any elimination of income taxes in favor of a consumption tax through tariffs would disproportionately impact the lower and middle classes. NFW that happens.


I agree it would be regressive, but I wouldn't be surprised if that was the plan… I also don't agree with that path
BTHOthatguy
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QBCade said:

jh0400 said:

Any elimination of income taxes in favor of a consumption tax through tariffs would disproportionately impact the lower and middle classes. NFW that happens.


I agree it would be regressive, but I wouldn't be surprised if that was the plan… I also don't agree with that path


Bottom 50% of taxpayers contribute about $160 billion of tax revenue. Could definitely raise that from tariffs and take the fed income tax for half the country to 0.
AgLA06
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Jeeper79 said:

amercer said:

stallion6 said:

amercer said:

Bringing back manufacturing would make America poorer.

There is a reason that we are the richest country in the world, and it's because we completely dominate the most profitable industries. Manufacturing isn't one of them.
You do know that the US is only second to China in manufacturing right? It is not like we are starting from ground zero.


Right, we already do the manufacturing that makes sense to do here. My company manufactures in the US. The company we use probably has 400 employees, and about 40 of them do the actual on the floor manufacturing work. Of those 40, all have bachelor's degrees, and the supervisors have masters or PhDs .
Funny how that works, isn't it? I mean… there's a reason your toaster doesn't say "Made in America". We should stop pretending like it should.
We're England mid to late 1800s. We've peaked and have a slow industrial fall of ahead of us as the labor force continues to move away from blue collar jobs to higher education and white collar jobs and industries. Most just don't see it yet, but it happens to every economic super power at some point once they become over developed and over educated.
bigtruckguy3500
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So, kind of related to this and labor force. It would be possible if we fixed immigration. Lots of countries have ways for immigrants to come to the US to provide cheap labor, but Congress has refused to fix it for decades.

That being said, I have a prediction. Sometime in the not too distant future, all western countries and a few asian countries (Japan, S. Korea, in particular), will be competing with one another to attract immigrants for jobs. Not sure when that'll be, but with declining birth rates in all these countries, and a ballooning elderly population, it'll simply be impossible do a lot of jobs without paying Americans extremely high salaries to do them. And that's even if Americans are willing to do them - think nursing home attendant, custodial staff, farm workers, etc.

1. See above
2. Many are going to say they're doing something now to appease trump, and then wait till the next president to see what actually needs to happen
3. I believe DOGE is doing 2 things. One is cutting a lot less than they're saying, because they end up having to reverse a lot of their cuts. And they're also cutting services and agencies that the government is just going to have to rehire as private contractors - in the long run spending more.
4. Probably. Adversarial politics is essentially like having two ship captains trying to go opposite directions. In the end we end up just dead in the water.
jamey
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bigtruckguy3500 said:

So, kind of related to this and labor force. It would be possible if we fixed immigration. Lots of countries have ways for immigrants to come to the US to provide cheap labor, but Congress has refused to fix it for decades.





I've long thought this is just because a simple open boarder has allowed labor to walk in when we got jobs and go back when we dont

I mentioned here or elsewhere, I can't remember but I once worked in a low wage labor industry. We had plants around the nation and while I was very strict in my plant, illegals come and go as they please going back many decades with the job flow and no bureaucracy.
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