The belief that tariffs will cause the reshoring of American jobs is a fallacy. As for those companies that do bring their manufacturing back to America?
Well, there are significant costs in doing so, but worse, their products would have to increase in price substantively.
If you look at simple manufacturing for goods for example. First, the salaries for American workers is substantively higher, in the range of 22%. If those workers are unionized with benefits and pensions, then it’s more like 38%.
Add to that, the cost for the company to either move its plant and rebuild in the U.S. Depending on the manufacturing facility, construction could run into the hundreds of millions, and if it were a complex manufacturing process, such as automobiles or aircraft for example, billions.
Then consider the costs associated with training, retooling of personnel. Add to that the costs associated with setting up completely new supply chains, and buying those supplies in the United States where the costs may well exceed another 20%.
Finally, add to that the cost of finances due to the difference in the dollar, combined with taxation, and you can add another 35%, for example, just considering the value of currency between Canada, for example, and the U.S.
Then consider the market itself.
If America goes in recession due to trump’s tariffs against the world. No one will be buying American products.
I mean, why would we?
Add to that fact that America is in the process of deporting its cheap workforce, and the aging of the population, and taxes will have to go up, just to keep the economy stable.
The world is diversifying as Trump attempts to extort the world.
What will result are new trading alliances, institutions, agreements and organizations excluding America.
Canada has already signed six such agreements with China, Japan, Korea, the E.U., the U.K. and Australia.
Ultimately, America is about to find itself with no friends, no allies, no trade partners, and no military industrial sales.
The final nail in the coffin of America is going to be stagflation, unemployment and social unrest, combined with no influence.
Worse, America’s debt is growing exponentially, both nationally and individually.
But the ultimate nailing of the coffin will be the worst case scenario for America.
The dedollarization of the world from the U.S. Dollar.
When that happens, the national debt will have to paid, and whoa Nellie, when that happens?
Depression.
All of this could have been avoided, but Americans are ignorant and arrogant.
So, good on yah America.
You’ve earned what’s coming.
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