hawkeyetraveler
HB Heisman
Fair points. The issues with China are deep and tough to work through. I faced the tech/IP side of this in a joint venture I had responsibility for. I’m generally anti-tariff, even in the case of China, but I could at least understand if you tariffed China heavily while allowing American businesses the flexibility to continue to manufacture in Mexico (or Vietnam, etc). But instead you are trying to get all of them to reshore all at once. What will that do to the supply chain of the materials necessary to build back that mfg base? What about employees? Machines for the factories, etc?
The blanket tariffs are an awful way to achieve your goal. It would be far better to simply subsidize a nationally important business that wants to reshore products via low cost/low interest loans or outright grants where necessary for national security. Yes this would either increase our deficit or require higher taxes somewhere, but at least you are getting the direct outcome you want and it is predictable by a business. If Nvidia knows it is getting a $100M in interest free financing they are almost certainly more likely to open a factory than if they have to ascertain how long Trump’s tariffs will stay in effect. Trump’s own unpredictability is going to backfire.
As to how to pay for the subsidy? You would have to tax something to raise the revenue for whatever subsidies were given. But taxing consumers via tariff is highly regressive and will lead to the nightmare of stagflation. An inheritance tax would do the trick nicely.
