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Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

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Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#41

Post by GeekyBear »

standardUser wrote: post #14

Everyone hates tariffs because everyone hates taxes. If a government uses protectionism for a specific policy goal, like developing a domestic auto industry, that can be very effective and we've seen that work lots of times in lots of countries. The US may have recently managed to achieve this with microchip production. But when tariffs are applied broadly we all pay more in taxes. And it's worse than a more familiar…

Brazil and India have both successfully forced Apple to move production onto their soil using tarrifs in the past.

If the object is to bring in local manufacturing jobs, it's hard to claim that tarrifs can not be successful.

However, you can naturally expect vocal opposition from companies that want to avoid higher labor costs.

In the case of India, it's worked out very well as a proof of concept after Apple decided to reduce their reliance on China.

> Apple Aims to Make a Quarter of the World’s iPhones in India

https://www.wsj.com/tech/apple-aims-to-make-a-quarter-of-the...

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#42

Post by unavoidable »

oceanplexian wrote: post #38
Terr_ wrote: post #25

Earlier quoted context omitted.

Also, they shouldn't be part of 4-front trade war against the country's biggest partners comprising >50% of all trade. "Do something or we'll trade with somebody else" is not a credible threat if they know you've already pissed off everybody else.

The US is the world's largest domestic economy. Trade with all nations around the world is 24% of the USA's GDP. You could shut it all down and the country would probably enter a mild recession while the rest of the world would face complete economic collapse. For example, 67% of Canada's GDP is reliant on the United States in some way. The US has an insane amount of leverage. Leaders in Canada, Europe, etc talk a bi…

Removing 24% of GDP is not just a "mild recession", leaving aside all the interconnected parts of the economy that would immediately be destroyed.

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#43

Post by hamilyon2 »

CPLX wrote: post #39
unavoidable wrote: post #16

Earlier quoted context omitted.

If tariffs work at all (which is doubtful), they're supposed to be part of an overarching plan with a long-term strategy in coordination with industry so that they can actually invest in creating new manufacturing. It certainly isn't going to work when tariffs are going on-off-on-off-25%-200%-10%-off-on-sometimes-off-on again. How in the world is _anyone_, American or otherwise, supposed to plan around this?

> If tariffs work at all (which is doubtful) Of course they work. China has used them to go from people living in huts to the high tech manufacturing center of the world.

Protectionism only works in combination with other measures. If you indiscriminately shield domestic enterprise from competition, you just get less competition and nothing else. Which is usually not enough.

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#44

Post by hollerith »

oceanplexian wrote: post #38
Terr_ wrote: post #25

Earlier quoted context omitted.

Also, they shouldn't be part of 4-front trade war against the country's biggest partners comprising >50% of all trade. "Do something or we'll trade with somebody else" is not a credible threat if they know you've already pissed off everybody else.

The US is the world's largest domestic economy. Trade with all nations around the world is 24% of the USA's GDP. You could shut it all down and the country would probably enter a mild recession while the rest of the world would face complete economic collapse. For example, 67% of Canada's GDP is reliant on the United States in some way. The US has an insane amount of leverage. Leaders in Canada, Europe, etc talk a bi…

Also, according to Peter Zeihan (I know) a significant part of that trade consists of the US's exporting the light sweet crude oil produced by fracking, which is easy to refine, and importing heavy sour crude oil, which the US has a comparative advantage in refining. Clearly, the US could switch to refining the crude oil produced in the US with very little disruption.

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#45

Post by WinstonSmith84 »

andrewmcwatters wrote: post #22
jonplackett wrote: post #18

Earlier quoted context omitted.

They don’t really want to collect tariff $. They want to force production in the US, which the article says is what they are going to do. That’s not a window being jumped through, that’s the intent. Or am I missing something here?

No, you're not missing anything. That's the intent.

That's the intent ... of the sales pitch, you're meant to believe in, yes.

The reality is however quite different. Frankly for tariffs to work, you need a clear battle plan. There isn't any. Chaos has never been good for business and cherry picking one (positive) example isn't statistically relevant either

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#46

Post by jiggawatts »

BLKNSLVR wrote: post #27
skylurk wrote: post #11

Offshoring to stable countries is looking really smart now.

Exactly. The US has revealed itself to be prone to wild swings of policy, which will not be a lesson soon forgotten by prior trade allies. Even if sanity and democracy are brought back by a future adminstration, the US public have proven they can't be trusted not to vote in another clone of their current dictator. DJT Jnr and Barron will probably have a shot at the title in the not too distant future to maintain some…

> Disney wouldn't be happy with

... and something like half of the companies comprising the US GDP.

Much of the value that the US exports heavily depends on foreign nations enforcing intellectual property rights for the US.

If the world decided that the US is hostile and stopped enforcing US trademarks, patents, copyright, and trade secrets... it would be over for the US economy.

Any software could be "stolen" legally by anyone and sold under the original name and the US could do nothing about this except stomp their feet and threaten military invasion.

China and Russia already do this to an extent, but if everyone else did it too, it would be curtains for: The entire US game industry, movie industry, music industry, software industry, and more. Pharma and manufacturing would take a hit too.

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#47

Post by baby_souffle »

oceanplexian wrote: post #38
Terr_ wrote: post #25

Earlier quoted context omitted.

Also, they shouldn't be part of 4-front trade war against the country's biggest partners comprising >50% of all trade. "Do something or we'll trade with somebody else" is not a credible threat if they know you've already pissed off everybody else.

The US is the world's largest domestic economy. Trade with all nations around the world is 24% of the USA's GDP. You could shut it all down and the country would probably enter a mild recession while the rest of the world would face complete economic collapse. For example, 67% of Canada's GDP is reliant on the United States in some way. The US has an insane amount of leverage. Leaders in Canada, Europe, etc talk a bi…

How does this account for the different classes of things that go into a GDP?

The US imports a lot of goods because we can't or don't want to make them here. Meanwhile, the bulk of US GDP is services done by knowledge workers...

I am certainly not an economist but it seems like it would be a hell of a lot harder for the United States to build a bunch of factories and learn how to run them compared to the effort other countries would have to go through to import knowledge workers to build their own local services.

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#48

Post by mixermachine »

unavoidable wrote: post #16
standardUser wrote: post #14

Everyone hates tariffs because everyone hates taxes. If a government uses protectionism for a specific policy goal, like developing a domestic auto industry, that can be very effective and we've seen that work lots of times in lots of countries. The US may have recently managed to achieve this with microchip production. But when tariffs are applied broadly we all pay more in taxes. And it's worse than a more familiar…

If tariffs work at all (which is doubtful), they're supposed to be part of an overarching plan with a long-term strategy in coordination with industry so that they can actually invest in creating new manufacturing. It certainly isn't going to work when tariffs are going on-off-on-off-25%-200%-10%-off-on-sometimes-off-on again. How in the world is _anyone_, American or otherwise, supposed to plan around this?

For me (European) this is an incentive to first check if there is an non-us alternative for the product from another country.

Quite sad times. I liked the 2000s and 2010s with rather free trade a lot.

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#49

Post by rawgabbit »

whatshisface wrote: post #29
BLKNSLVR wrote: post #27

Earlier quoted context omitted.

Exactly. The US has revealed itself to be prone to wild swings of policy, which will not be a lesson soon forgotten by prior trade allies. Even if sanity and democracy are brought back by a future adminstration, the US public have proven they can't be trusted not to vote in another clone of their current dictator. DJT Jnr and Barron will probably have a shot at the title in the not too distant future to maintain some…

The US doesn't need to prove to the world that a bad president will never be elected again, which as you say is probably impossible and definitely false. What the US can do to rejoin the world in something akin to its former capacity is to walk back the extreme levels of authority granted to an individual who changes every four years (why is the executive able to change tariff levels every day?) in a way that relativ…

It will be impossible until the Supreme Court’s decision on Citizens United is reversed. Prior to this it would have been illegal for Musk to contribute $300 million to Trump. Now he is contributing another $100 million after the Tesla car show at the White House south lawn.

Re: Tariffs Are Proving 'Big Headache' for Tech Giants, Says Foxconn

#50

Post by mixermachine »

oceanplexian wrote: post #38
Terr_ wrote: post #25

Earlier quoted context omitted.

Also, they shouldn't be part of 4-front trade war against the country's biggest partners comprising >50% of all trade. "Do something or we'll trade with somebody else" is not a credible threat if they know you've already pissed off everybody else.

The US is the world's largest domestic economy. Trade with all nations around the world is 24% of the USA's GDP. You could shut it all down and the country would probably enter a mild recession while the rest of the world would face complete economic collapse. For example, 67% of Canada's GDP is reliant on the United States in some way. The US has an insane amount of leverage. Leaders in Canada, Europe, etc talk a bi…

The current situation is the result of decades of free trade and reliability. There will likely be a shift if the market forces pull in a different direction. Not today right away but in the timescale of years.
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