Not to challenge the notion of tax but to seek an answer: what would be a better solution to the deindustrialization of the US then? China has 350X of the shipping building capacity than the US. We couldn't even produce masks fast enough so we had to buy BYD's during the Covid. GM's factory looked like a WII-era run-down workshop compared to BYD's fully-automated factory. DJI took more than 99% of the drone market. Another question how we deal with imbalanced tariffs, like China and Europe could place higher tariff on some products than we do to them.
Another worry is losing talent. Industry know-how is a living being. It is symbolic with the people who actively work in an industry. On the other hand, real demand produces real talent in mass. Again and again in history, a small town or a small area could produce enough generals and politicians to rule an empire. A few city states could lay the foundation of modern science and civilization. Americans in the midwestern invented so many things and built so many great companies during the industrial age as well, even though they've been suffering greatly in the past few decades.
> what would be a better solution to the deindustrialization of the US then?
Unfortunately, given the geopolitical necessity, the question is moot. The people of the United States, regardless of what they might claim, do not actually want reindustrialization. It's easy enough to prove: are Americans willing to either accept wage decreases in line with non-Americans, or accept price increases that would cover the cost of paying American wages? The answer is definitively "no", and thus reindustrialization cannot happen. (But machines, you say. Those machines work just as well in China as in America, staffed by Chinese techs who will work for less. This solves nothing.) Americans want to eat their cake and have it too, and unfortunately this is not how reality works.
But no politician ever got elected by telling the electorate that what they want is incompatible with reality. No, if the electorate wants a pony, you promise them a pony, and then when the pony fails to show up you blame it on... let me check today's notes... woke DEI communist pony salesmen.
> are Americans willing to either accept wage decreases in line with non-Americans, or accept price increases that would cover the cost of paying American wages? The answer is definitively "no", and thus reindustrialization cannot happen.
The answer is not "definitively" no. Trump ran on tariffs and definitively won. And I know many people (myself included) who would happily "accept price increases that would cover the cost of paying American wages". Most of these people are low/middle income Trump voters. Trump won the $30k-100k voters a year. Harris won all other income brackets.
The prominence of the inflation narrative and outrage over egg prices indicates otherwise. Nobody would be happier than me to see my country, my state, and my city all have healthy manufacturing sectors for locally-sourced essentials, but import taxes won't do that unless you're also willing to strategically subsidize industries for 20 years or more, and nothing about the current admin shows they have any grasp of long-term strategy.
There is no strong evidence to suggest tariffs were a major cause of the recent (starting in 2021) inflation, just read the wiki on it [1]
Trump started his first bout of tariffs in 2018, long before any surge in inflation.
The TLDR cause was the pandemic. Basically supply chain broke down and didn't recover as fast as demand did.
The surge in egg prices is due to bird flu. Again, nothing to do with protectionism.
> but import taxes won't do that unless you're also willing to strategically subsidize industries for 20 years or more
Again, if you just open your mind and read the actual history in America on this topic, you can see that tariffs did indeed bolster American industry, again just read the wiki on it [2]
It’s just the latest memo that went out to neo-“liberals.” Obviously the rich favor free trade. That’s why American liberals consistently opposed free trade until Clinton’s third way approach.
> Not to challenge the notion of tax but to seek an answer: what would be a better solution to the deindustrialization of the US then?
You can simply nationalize manufacturing in critical industries. If you're not willing to go that far then throw incentives at failing industries to compensate for the higher cost of labor, so they can still compete on US soil.
This was Biden's philosophy with, say, Intel.
The benefit of nationalization (or at least subsidies) is that it doesn't need to pass the tax on to the consumers, and you can pay for it with a tax on oher things (e.g. billionaires) instead.
> You can simply nationalize manufacturing in critical industries
I'm not sure if this works. If anything, I'm strongly against it. Below are my data points:
- Chinese dynasties never managed to breed those amazing horses as European did. Since the Song Dynasty, despite government-run horse breeding programs that imported Ferghana horses, these amazing steeds degenerated into those typical Asian stunt horses within just a few generations.
- Look at China before 1980s. Everything was stated owned, and all the sectors were miserably corrupted, inefficient, and there was no innovation whatsoever. In fact, Soviet Unions managed to do the same. Yes, they had amazing researchers to make engineering and scientific breakthroughs, but ultimately they could manufacture efficiently. I hate to say this, but the reality was that nobody took China seriously at that time.
- Look at Britain. They ran their industries into ground, especially their auto industry, with a semi-state-owned approach.
- Look at how the US ran its defense industry. And look at Boeing. Or how expensive it is to build a battleship. It is not even state-owned, but just state-paid with cost-plus pricing.
In the end, state-owned industries will fail to incentivize its workers.
