Manufacturing jobs bring the entire supply chain of the manufacturer with them.
The area where I live, Greenville, SC used to be the textile capital of the world and then became essentially destitute when the entire industry offshored.
BMW and Michelin locating their US HQ here essentially rebuilt this entire corner of the state with jobs and associated supply chains. Now, Greenville is booming with a more diverse economy but all that manufacturing is the root system of prosperity here.
> Manufacturing jobs bring the entire supply chain of the manufacturer with them.
Not really... Manufacturing today is a global process and the entire supply chain is usually spread around the world.
One example for a cotton shirt (https://apps.npr.org/tshirt/): the cotton is grown in Mississippi. It's then shipped to Indonesia to spin the cotton into yarn. The yarn is shipped to Bangladesh for rough cut and sewing. The shirt is shipped to Colombia for final assembly. And finally it's shipped to the USA for purchase. Move any one of those steps to the USA, and the other steps may still be located elsewhere.
Same is true of other items, like cars. Ford may "manufacture" in the US, but the parts and tooling are sourced from elsewhere. It can't manufacture the chips here, because the tooling and process are exclusive to Taiwan. Even if you bought the plant and moved it here, the making of the tools and the processes are still specific to Taiwan. And some steps may be impossible to "bring home", either because some other country has all the raw materials, or all the expertise, or local laws prohibit some part of the process being done here.
For return to happen you need to have a creative economy, not an extractive economy.
Offshoring happened for the simple, dumb reason that it's cheaper and more profitable.
For all the rarara about "America", shareholder patriotism extends exactly as far as quarterly returns. If that means selling out ordinary US workers - do it. Give me the bag.
What offshoring revealed is that the US is not a culturally integrated country. The culture of the top 5% or so considers itself completely separate to the rest.
It's a political fault line that was always latent, was somewhat suppressed from the New Deal to Carter, and then came roaring back with Reagan.
Now it's operating at pathological, self-harming levels. The marrow of the country has been chewed out, and a few dysfunctional shell oligopolies, propped up by a bubble, are keeping the lie spinning.
There won't be any significant reshoring until there's a cultural change. Reshoring is just too expensive for the owner class to do more than tinker with it. Without a cultural change the owner class doesn't care enough to change that.
Offshoring happened because people dont want to buy goods that cost 3x as much just because they were made in the US. If a clothing company tries manufacturing domestically no one will buy their clothes unless theyre already an expensive brand.
Partially true, but it also happened because companies wanted to reduce cost and logistics are cheap. Sometimes this was a necessity to stay competitive. You either prohibit some trade with taxes or it is a race to the bottom to concentrate all production into countries with the lowest possible wages.
Ecological factors from logistics are missed technological development opportunity from not having local production are not factored in here as well.
I think if the wealth class wants to avoid communism and heads on pikes in the longer run, they should absolutely start to be more concerned with community and move beyond the tunnel blinders of the next quarter over long term stability.
This goes for govt doing anything but working to ensure domestic production and dual/multi sourcing of essential infrastructure.
Unfortunately that's a wall street problem. I don't think wall street can be fixed, at least I don't have any clue on how it's possible to fix it outside of destroying it.
As long as the ownership class can continue tricking half the population into directing their lust for violence towards scapegoats like illegal immigrants, there's very little reason for them to change course. The remaining half of the population then gets most of their energy used up defending against "culture war" bullshit, with many even going on the aggressive there because it's one of the few types of allowable wins in the very narrow Overton window.
Illegal immigration isn't just a scapegoat... it's a large impact on social welfare spending, infrastructure costs and housing availability. Especially when considering an increase of over 5% of the population in under 5 years without an accompanying growth in production and wealth generation in general relative to inflation.
There are limits on migration for a reason... that doesn't even consider the impacts on the larger society by weakening social cohesion.
Even then, there's plenty of indication of movement from those who want a Communist society... you only need to look at the NYC election, and the Venezuela protests to see that. Without a longer term consideration for society as part of where business/corporations operate, you will only see more drift in that direction.
Sure, it's not just a scapegoat. I'm actually pretty ambivalent about the immigration issue itself [0]. But it is still a scapegoat - the people who were violently angry about economic disenfranchisement (due to overfinancialization and massively monetary inflation) are currently all-in on cheering for the New York financial con artist for performatively going after those scapegoats while making the real problems worse, right? That right there is the pressure valve popping off, and even if the tribal buntings change and those people go back to seeing the system as their enemy in ten years, history shows they will just get hoodwinked again.
If this tiny movement towards "communism" amounts to anything of note in 20 years, I will be surprised. The pattern I've seen is that even if the current push is headed by idealistic leaders who don't give in to self-interested expedience (ie corruption), the next crop won't be. And the corporatist structure has been very good at neutralizing any real reforms, especially in the US.
[0] given equity with things like people who have been here for quite some time - those are undocumented Americans. For comparison, adverse possession, by which you can gain exclusive title to a piece of real estate by breaking the law usually only requires a few decades
You’re cherry-picking examples. Manufacturers can and do relocate the entire chain (or a super majority of it). I live outside of Greenville, SC also (previously Charleston) and when Boeing or BMW or Mercedes or Volvo bring a product out here they also bring hundreds of small time suppliers with them. Maybe the cotton for the cloth seats still come from Egypt but this is immaterial to the overall operation and the jobs it brings to a community.
They didn't have those steps outside the USA in 1960, yet people wore shirts. Those steps can come back.
For cars I found it interesting that my water pump on my Dodge Ram is stamped with Made in Italy. Yet the part is fairly small that even if Italy continues to make it, they can ship 50k water pumps in one shipping container to Detroit, and the truck can still be assembled here. That's not an issue. The issue is when the truck is made in Mexico entirely (which I think they still are). I know that's not "the entire supply chain" but it certainly becomes a center of gravity.
Last year many people were talking about dev shops changing their "center of gravity" from the US to other places like Poland. In other words, CEO here, EVERYTHING else is in Poland. Wherever that center of gravity is, that's the country that will benefit the most. They may even hire a remote worker in the US that is up all night - but it will be the exception, not the rule to hire US people.
Clothes are much cheaper than they were in 1960. You could bring the garment industry back to the US but you wouldnt be able to sell your products because they wouldnt be price competitive with sweatshop products.
Protectionism has been proven time and again to fail. Over time inflation rises, trade gets worse, prices get higher, fewer choices, then the economy fails; it's a shitshow.
Even if we wanted to buy domestic-only, wealth inequality is so fucked that our people couldn't afford it. The way to solve that is higher wages, smaller corporate profits, cheaper healthcare and cost of living. But you know that ain't happening. Our economy is built around corporate profits. We're basically one large hedge fund with a lot of uber drivers.
So while you can get away with protectionism during the reign of an insane person for 4 years, you eventually need to move stuff back overseas, because nobody here can afford the stuff you make here. (You could export all your goods, but then what's the point of the protectionism?)
>> Manufacturing jobs bring the entire supply chain of the manufacturer with them. > Not really... Manufacturing today is a global process and the entire supply chain is usually spread around the world.
You're both right but you appear to differ on particularities, like if it's good to bring all manufacturing onshore.
I'd rather address Jensen's could-be-apology which pretty much mimics Grok's "Oops, I made some pedo images, sorry... but move on, nothing to see here."
Yes, Nvidia, Apple and AMD are the companies that drove the US chip manufacturing overseas. The problem is, thanks to that, they are now forcing us to pay for their enormous margins and for bringing chip production back here, all the while they swim in money.
On top of that, we are now supposed to appreciate their newly acquired wisdom and be thankful when they lecture us about what's good for America.
I'm not sure what you're arguing against, isn't that the point of the GP? That we can bring all that stuff back? Tesla makes things predominantly in-house and didn't use a supply chain all over the world. There are still garments grown and made entirely in the US, eg Duckworth. They're just expensive because there's not a lot of it left.
For manufacturing in the US to be economically competitive on the global stage (or even on the domestic stage), the actual work will mostly be performed by robots, not by humans. This will bring back profits, but not a lot of jobs.
In the specific case of these chips, the offshoring was to Taiwan, a democracy, and one of our geopolitically closest allies. This business went to TSMC because they did a better job producing these chips than either Intel or AMD (or AMD's successor, Global Foundries). The Twinscan machines that fab the chips are from ASML in the Netherlands, another democracy and geopolitical ally. The parts for those machines come from a truly global supply chain. Modern chip manufacturing is an absolute marvel of global integration.
American consumers and businesses benefited from this arrangement in the form of very competitively priced hardware. Most of the manufacturing was in Asia, but most of the profits were to American companies. This is why America is today the richest country on Earth. It simply would not have happened like it did without free trade.
China's low wages and integrated supply chain can beat American manufacturing. China cannot beat the combined talent of the free world. Along with immigration, from the likes of Taiwanese-American Jensen Huang, free trade and an open economy was what once made America great.
> In the specific case of these chips, the offshoring was to Taiwan
In the context of Jensen's would-be-apology, it doesn't matter where the offshoring went. Nvidia, Apple and AMD drove the US chip manufacturing overseas, and thanks to that, they are now a virtual cartel which commands enormous margins, so they can "mercifully" argue about bringing chip production back here... at our expense of course.
While paying through the nose, we're also supposed to appreciate their crocodile tears and listen to their drivel about what's good for America.
Yep. I live here, too, and it's a great place. My primary concern is that we're pretty reliant on just those two companies. If they decide to leave or make major changes, the impact on me (even though I work remotely as a software engineer) would be huge. I hope we manage to diversify.
To answer the GP, you'll have to take a look at why the entire industry offshored at the same time.
What makes you think the problem that caused the industry to go won't also cause it to fail if somebody forces them to stay or tries to bring them back? Also, why one industry leaving made people there destitute?
Those things are always more complicated than they seem.
Yep, it's definitely complicated from an economic standpoint.
There was a strong dollar making imports cheaper and exports more expensive. At the same time there were reductions in tariffs (Tokyo Round of GATT) as well as increased quota allowances from other countries, particularly China, than were previously allowed (the Multi-Fiber Arrangement).
At the time, this particular area of the country had turned into a global textile hub and it was devastated as a byproduct (over-saturation of a single industry). Now if you come to the area, you will see all of the old mills converted into apartment complexes, coworking spaces, wedding venues, etc just to preserve the architecture.
The whole area is beautiful now and has been one of the fastest growing parts of the country for almost a decade. I moved here 25 years ago when the changes were just starting but the natives will tell you the whole story. I think a PBS documentary was being made about it too.
We should still differentiate between low value and high value add manufacturing though. Building automobiles and automobile parts, great. Relatively high skill, high value add jobs. Spinning cotton, not so much.
If we have an infinite supply of labor with no better place to allocate them then sure, any additional job is good. But that's not the case. We have a constrained labor supply, so is it better overall to focus on high value, high pay jobs, even in manufacturing instead of aiming for the entire supply chain for everything?
So European companies brought new jobs and prosperity to Greenville, SC, and the local Americans thanked Europe by voting 60% for Trump in the last election.
How do you explain that? Why do the locals vote against the countries that provide them the jobs? Are you also pro-Trump because you live in that town?
To be fair -- there are a lot of people in the southern US who do the same thing to various demographics that HN users are likely to belong to. You can actually see serving politicians do that on TV, and have been able to see that for a long time. Not everyone does it, but not everyone on HN does it either. Indiscriminately doing the same thing back isn't good, but that kind of ugly seems to just be human nature.
I'm a liberal and I've lived in Texas (Austin) for 20 years. It is infuriating when I am on some liberal-oriented forum, someone says we should force Texas out of the union or whatever, and everyone cheers. ~40% of Texans didn't vote for Trump, and in absolute numbers are a greater number of liberals than most other states in their entirety ... yet my supposed fellows want to write us off. Ugly indeed.
Am I saying they should be disenfranchised from the country? Have I said they I have no empathy for their concerns and hope the worst for them? No.
What I said was it was infuriating when they are doing those things to the ~40% of Texans who are liberal. I didn't say it happens on all liberal forums, I'm complaining about the cases where it does happen. And please don't shift things because I said "everyone cheers" because it should be obvious it is a common phrase and doesn't literally mean I checked and every person on the forum commented.
Would you even call HN a liberal forum? It is full to the brim with profiteers who have no ethical framework except making money for US-based VCs.
The past years have shown that many have no problem to change affiliation with the zeitgeist. I feel many Americans are secretly pro-Trump as long as they make money. If there would be more liberals in US tech we would see much more leaks coming from companies such as Apple, Facebook, Reddit, Google, about how the senior leadership is supporting the government policies.
For example with Facebook it needed a woman to get sexually harrassed out of her job and write a book called "careless people" so that it is reported that Facebook engineers were actively embedded with the Trump campaign while at the same time democrat voters (black people) were shown literal fake news ads to keep them away from voting.
I have not seen one Facebook senior engineer being ostracized on HN for working on the trump campaign. Everbody made their millions and joined the next big thing, with us worshipping their amazing FAANG credentials.
If the people who worked on DOGE do a "SHOW HN:" nobody would call it out.
I just look at the patterns of things that are downvoted to death. Comments that would come out of Peter Thiel or Elon Musk's mouth any day of the week are regularly downvoted to hell here.
It's not a matter of 'liberal' vs whatever anymore, it's a matter of expertise and basic ethics versus corruption riding upon anti-intellectualism, cloaked in naked bigotry. Say what you will about the prevailing value system among HN commenters, this place isn't that bad.
My observation over the last 10-15 years here has been this is partially true. But what's more true is the Overton window has shifted. To use your example, the things that would come out of their mouths, especially Elon, has taken a decidedly right wing turn over time. So keep in mind you're also seeing people who have largely stayed the same discussing a culture that largely has not.
Stop playing the victim. When you have time to hang out on HN you're obviously part of the privileged class. The area is hugely profiting from "stolen" EU jobs, which according to Trumpistan logic is something that is not good. I don't see any uprising of all the "folks in the Southern US" against the lawlessness of your government. And if you're called out for it the victim reflex sets in.
The subsides were during Clinton and Bush 2. BMW and Mercedes were here long before Biden and Obama. It makes good sense to manufacture your product in the area it is sold - that's the real reason for their mfg base establishment.
Not only the direct jobs, but also the other support ones - automation, suppliers, maintenance, facilities work, etc.
Absolutely, especially with larger/heavier items like cars... I'm frankly somewhat surprised there aren't more assembly plants across the US just to reduce the shipping costs of the final product. Even with a more globalized supply chain of the component parts.
I'm talking of the Biden-era IRA here. BMW had to invest 1.7 billions in 2022 to manufacture most of its EV directly from there as you can compete in the US market without the IRA subsidies and the conditions severely limit even which parts you can import.
That's a significant shift moving from final assembly to forcing most of the supply chain to be relocated.
What countries, beyond the US, are you speaking to? I mean, I'm interested in what countries you're talking about that don't leverage tariffs and other restrictions to favor domestic industries in those countries.
There is EU / Schengen which immensely boosted local economies. We had TTIP but unfortunately it was killed by opposing forces, and there is still MERCOSUR. However, Germany with it's brilliantly corrupt leadership, changed that strategy to "trade facilitates change" ("wandel durch handel") and went all in to removing trade barriers w/ russia and china because the idea was to convince them if we trade they won't try to kill us. Obviously this approach failed.
Strategically, it does not make sense for democratic countries to have higher trade barriers with each other than with autocrat states. But over time the hybrid warfare by autocrat states leveraged social media to convice people to vote against their own interest e.g. brexit.
Tax revenue. The nation is tens of trillions in debt with a multi-trillion per year deficit. Tariffs are proportional to spending, and encourage domestic production and security.
There have been several favorable trade deals as well as several announcements for new production facilities in the US... this may cost more than imports, but there's something to be said for domestic security in terms of access, especially in the likes of a global pandemic or war.
I'm not suggesting it's a perfect solution, or situation, only in that it isn't exactly an idea completely without merit and just blindly applied at random.
You're description matches a well planned and communicated slow increase of tariffs targeting specific products or industries so companies have time to adjust (newsflash, US was already doing this). Trump used blanket tariffs as a hammer to extort other countries, but its not like we want to buy your shitty cars anyway. Most of these facilities already existed or were planned. hint: most foreign brands were building their cars in US already.
If the economy is doing so well because of these tariffs why are they hiding numbers?
Its not even the first time US tried tariffs like these, it didn't go well then but Trump talks about like it was a golden age.
I think that humanity hasn't changed as much as maybe you give it credit for as a whole and that most human behaviors are somewhat consistent. I do think that taxes on actions as part of trade is better than taxes on income. I also think that taxes that are somewhat protectionist are better than "free trade" against nations that don't have similar quality of life, laws regarding labor, or free trade themselves.
The portions regarding trade are borne out by the VAT systems in place throughout EU and UK. The fact that tariffs exist in pretty much every nation of the world bears out their utility. The reason that most people are even arguing against it is that its being championed by Trump, who is admittedly a bombastic personality.
My opinions on tariffs long predates Trump. I have similar opinions against property taxes against individual ownership as well. I don't think that you should be at risk of losing personal property for the simple fact that you survived another year.
I said "extended" not "opened". That's indeed intentional. Please don't use a strawman to avoid addressing the point I'm actually making.
Michelin invested significantly in the site recently and BMW added a ton of EV manufacturing capacities, we are talking of a 1.7 billions dollars investment.
All of this is linked to subsidies they got through the IRA on top of local South Carolina subsidies. They had to do these investments to remain competitive in the US market as the subsidies are tied to local manufacturing and the conditions significantly limit what parts they can import. It was a direct attack on European manufacturing masquerading as green investments.
Downvoted for a factual comment, I see the usual denial on the basis of party lines is still as strong as ever in the US. Here is a bunch of sources for the few who might be interested:
The area where I live, Greenville, SC used to be the textile capital of the world and then became essentially destitute when the entire industry offshored.
BMW and Michelin locating their US HQ here essentially rebuilt this entire corner of the state with jobs and associated supply chains. Now, Greenville is booming with a more diverse economy but all that manufacturing is the root system of prosperity here.