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I am very much on the fence on this one. I can tell you, without a shadow of a doubt, based on having been in manufacturing across various industries for over thirty years, that the US and Europe have been on a path to loose nearly all manufacturing capacity within ten years, maybe twenty at best.

How do we compare the pain (and yes, some destruction) that we have to endure today against the devastation that is clearly in the horizon for both regions within a decade or two?

To be sure, what's going on today should have been done twenty to thirty years ago. Doing this today is far more difficult and painful.

I think Kevin O'Leary put it best: What we want a reasonably free markets. It isn't just about tariffs. It's about regulatory lockout, intellectual property and more.

For example, India imposes as much as a 110% tariff on US cars and trucks. The list of such actions --which also included non-tariff rules-based restrictions-- is long. From China imposing up to 25% on our cars, autos, chemicals and food to the EU, Canada, Mexico and others following suit. Brazil collected over $800 million in retaliatory tariffs blocking US pharmaceuticals, autos and textiles.

In other words, the relationship with hundreds of countries has been very one-sided for a long time. US industry needs to export to thrive, but if countries like Turkey impose 140% tariffs on our autos and trucks, markets are de-facto shut down.

How long can any country survive this kind of inequity?

So, yeah, this is a rough moment. I hope it is for the best. Everyone benefits from a more open and balanced market.

And then, of course, there's one of the elephants in the room: Intellectual property theft.

Going back to Kevin O'Learly:

https://www.youtube.com/watch?v=dKkdor6_rw4

https://www.facebook.com/watch/?v=567065763062114

https://www.youtube.com/watch?v=jGFWWqbDwuw

https://www.tmz.com/watch/kevin-o-leary-china-tariffs-04-09-...




Whatever your hopes and dreams around domestic manufacturing, blanket tariffs capriciously imposed at random are unlikely to get any dream closer to reality, except perhaps the dream of total devastation of all manufacturing.

Let's look at what an actual domestic manufacturer has to say about tariffs[1]?

Oh, looks bad! Turns out, manufacturers import stuff, add value to it, and sell it for more money!

Hopefully we'll get more cast iron plants in Cape Cod. I'm off to the mill!

[1]https://www.vcstar.com/story/news/local/2025/04/09/trump-tar...


> Whatever your hopes and dreams around domestic manufacturing

This isn't about my hopes and dreams, it's about reality. I gave up years ago. I manufacture in China and other places. My take, after suffering the consequences for years, was simple: If my own government does not help me with such things as IP protection, control of currency manipulation, etc., screw it, I'll look after myself and my family. No choice.

So, I sold my manufacturing equipment and got the fuck out. We work with two factories in China and, well, I don't give a shit any more. Sounds horrible, I know, but, as the movie line goes "Mongo small fish in pond of life". This is something for the next generation to figure out...or not...and suffer whatever the consequences might be.

What is always notable is that almost nobody commenting on these kinds of threads know what the fuck they are talking about. A bunch of software engineers playing business person. Not a clue. Go talk to real manufacturing entrepreneurs and see what they say. Until then, you are not at all equipped to understand what's in front of us at all.


But, are you looking at what's going on, with the on-again / off-again tariffs announced on discord or whatever, and thinking, "oh, lordy, I can finally rebuild my dream factory in Missoula!" are you?

If I had a specific domestic product to protect and foster, I imagine I'd probably be somewhat more nuanced than whatever this process has been.

Over my life, I've seen car assembly leave the Los Angeles area, I've worked in machine tool manufacturing plants, I've seen modest electronic manufacturing companies fail in Massachusetts, I've seen C Beams glitter off the shoulder of Orion, etc. Now I work a bland service sector job managing kafka clusters.

The infrastructure elsewhere was developed by thoughtful and focused government effort to foster the industry domestically. I don't see what's going on now, in any way, focused or thoughtful. I don't see a plan, just arson.

So, I won't speak for you, but I can't imagine anyone looking at the current US Governments' policies and thinking "I'm going to pull assets from elsewhere and build there because that looks really stable and thoughtful and they've got my back."


While there are more peaceful ways of rebalancing trade, unilateral tariffs would be able to rebalance things on the long term. The problem is that alot of people in HN think in terms in export-driven economy, when in reality the majority of USA's economy is consumption, it's the largest consumer in the world. Loosing access to foreign markets dosen't mean as much to USA as it does to the rest of the world loosing access to USA.

Long term, manufacturers will come back or be created to grab all those customers. But for the rest of the world, it's much harder for suppliers who lost a massive chunk of their customers to suddenly find new customers beyond what's already existing. Creating demand is notoriously harder than increasing supply. And it dosen't help that the majority of other major economies are also export-based, so unless if some are willing to run deficits (and they won't), there's literally nowhere else to go other than a global recession. Developing countries are far too poor and would essentially be turned into captive markets bereft of industrialization.

I don't agree with the implementation of Trump's policies, but this is going right back to Keynes' concerns about limitations of global trade balancing, it's a long time coming, and much of the blame does come back to the surplus economies that doubled down on manufacturing rather than transitioning to consumer based economies.


Balance trade? Trade isn't a single ledger that needs to be in balance.

If you read that article about Haas automation, they say that they import cast iron and PCBs, presumably they import some chips and use some domestic chips, they put these all together and sell machine tools (big machines used to make machines, the exact sort of thing that trump et all are banging on about needing to be made in the usa, which last I checked, Oxnard california counts as "USA").

Nobody in the USA makes cast iron in the volume needed by haas; nobody in the USA makes PCBs at the price point needed by haas. Nobody's going to be able to start domestic production of either now, because they'd need to import all the materials from elsewhere to make the cast iron foundry, and nobody's going to take the chance that their multi million dollar investment isn't going to be ruined by trump changing his mind in a month.

So whatever you think you're arguing for, the world's way more complex than you think it is. And this execution of whatever the plans are, has been so far beyond inept as to land in a different scale altogether.


>Balance trade? Trade isn't a single ledger that needs to be in balance.

By definition, global exports must be matched with global imports to sum to zero, unless if you are trading with aliens. This is basic double-entry accounting and mainstream economics.

>Nobody in the USA makes cast iron in the volume needed by haas; nobody in the USA makes PCBs at the price point needed by haas. Nobody's going to be able to start domestic production of either now

On the long term, factories can be built, workers can be trained. If the price point of manufacturing is more profitable domestically than through outsourcing via tariffs, then investment will naturally flow to account for those opportunities.

But like I said, what you fail to see is that firms like Haas Automation are not reflective of the larger US economy, the majority of the US economy is supported by consumption, not manufacturing, and actually it's the top 10% that accounts for almost 50% of domestic consumption, meaning a whopping 10% of US consumers account for 15% of global consumption. Counter-Tariffs aren't going to mean as much to Investment Bankers, Lawyers, Doctors, Senior SWE etc. People will come to and build production if China is not available because they will want to grab the lucrative opportunities of the largest consumer base in the world.

On the other hand for surplus exporters, bereft of such a consumer base, unless if they find a way to make up for that consumer base (which is very difficult), all those factories are going to close down very quickly, and mass unemployment ensues. It's not just China, it's possibly Vietnam, most of SEA, Germany, Japan, etc. And that matters for the negotiating table, hence why many did not pursue counter-tariffs. But they've been doubling down on manufacturing rather than shoring up domestic consumption, the US reaction is by definition the Beggar-Thy-Neighbour as a consequence of their greedy actions.

The larger argument really is for a more balanced global trade, where countries current account balances would be near 0. It's true that US consumption rate will probably need to go down for it, but that also means that the rest of the world would be increasing their consumption (and their living standards) rather than suppressing domestic demand for the sake of manufacturing fetishism. It would be an all around more resilient to trade shocks than the status quo today.


Do you have balanced trade with your gas station? With your dentist? The double entry book keeping has to balance after all. Oh, you use money, and each party has their own ledger. Maybe your dentist is taking advantage of you, but it isn't because they never exchange your gasoline for polishing your molars.

Let's go back to a real world example -- a successful machine tool manufacturer in the united states, theoretically the very thing we want (which in fact, I totally agree with -- such companies are important in a huge number of ways).

They import raw or partially finished materials (cast iron, blank or partially assembled PCBs); haas does a bunch of work on these materials, puts it all together and sells the finished product for more than all the raw materials cost to lots of other (typically different) people.

Now, because of blanket tariffs -- on things the US has no interest, capacity, or foundation to build, like cast iron. Nobody's going to make a PCB assembly company or cast iron foundry in the USA to meet this need, it'd take years, the products would be way too expensive, and the only possible market is ... haas automation? Never going to happen. Instead, haas will just raise prices and lose market.

The blanket tariff negotiation (I tariff all your stuff, or else!) is "Do what I want or I'll kill your daughter, eat your dog, and burn your farm!" -- but in this case, because trump's said the same thing to everyone, he's actually saying "Do what I want or I'll kill my daughter, eat my dog, and burn my farm!"


>Do you have balanced trade with your gas station? With your dentist? The double entry book keeping has to balance after all. Oh, you use money, and each party has their own ledger. Maybe your dentist is taking advantage of you, but it isn't because they never exchange your gasoline for polishing your molars.

https://www.investopedia.com/terms/b/bop.asp#:~:text=The%20s...

I'm talking about global trade balance, your example is examining trade relations from a individual perspective that ignores the activities of other actors, when you need to be looking at the global sum of all exports and imports of all the actors involved. Namely put, in a closed economy, the sum of all the credits and debits between you, the gas station, dentist, etc will sum to zero. The economy of Earth in a similar manner is a closed system, we're not trading with aliens here. This is mainstream economics, you're going to woo-land if you're trying to deny this.

>and the only possible market is ... haas automation? Never going to happen. Instead, haas will just raise prices and lose market.

If the only possible market is Haas Automation then it's economically insignificant and not reflective of larger structural changes in the US economy. But that's a highly dubious assumption. Like I said, the US economy dosen't run on exports, the vast majority is consumption. The incentives are there to raise up entire supply chain given the massive profits involved here.

The thing about the blanket tariff negotiation tactic is that on the flipside, it is true that many of these nations very much were pursuing their own forms of economic nationalism with heavy protectionism and tariffs. For as much as American economists like to say that deficits don't matter, China, Vietnam, Germany, Japan all seem quite intent on maintaining a persistent surplus, whether through buying bonds to weaken their currency, heavy subsidies, or demand suppression at home to bring down wages. It's a bit absurd to expect American to uphold the principles of free trade while simultaneously turning a blind eye to the mercantalism of other nations. What Trump is doing is highly destructive, and there are better ways to negotiate, but it's a problem really that these surplus nations have created from the last few decades. And it's a problem not just for America, but for much of the developing world that will find to increasingly hard to climb up the value chain so long as China is dominating global exports.

No doubt there will be a recession, but on the long term, it will work. But for other countries, the situation will much worse because you cannot increase demand in the same way you can raise supply chains. That's why it's more likely that negotiated settlement similar to the Plaza Accords will occur, really in the question of whether we all seriously adhere to the principles of a free trade, or we collapse in a mercantalist free for all. In the world of a former, trade balances would close to zero because of the self-balancing currency effects of imbalances.

If you actually read the literature before Trump, this is something that has been talked about by Keynes, by Bernanke, by Stiglitz, by Katherine Tao, even admitted to a certain extent by Krugman. The hysterics of modern politics is that notion that "trade deficits aren't necessairly bad" has shifted to "trade deficits are never bad", when there are specific conditions when trade deficits are symptomatic of larger problems, and those conditions may be apparent right now for USA.

https://www.wita.org/blogs/keynes-support-tariffs/#:~:text=K...



> I am very much on the fence on this one. I can tell you, without a shadow of a doubt, based on having been in manufacturing across various industries for over thirty years, that the US and Europe have been on a path to loose nearly all manufacturing capacity within ten years, maybe twenty at best.

I've now been around long enough to remember people saying this 10-20 years ago. Seems to be plenty of manufacturing still happening.


> I've now been around long enough to remember people saying this 10-20 years ago. Seems to be plenty of manufacturing still happening.

“Plenty” but still less overall than 10-20 years ago, 30, 40, 50 years ago. There’s a quite clear trend to zero here.


This graph of US manufacturing output in gross dollars suggests otherwise: https://www.macrotrends.net/global-metrics/countries/USA/uni...

If you could explain why it’s trending to zero when the dollar value of American manufacturing outputs keeps rising, I’d appreciate it.

There are plenty of other charts that contradict you on the St Louis Fed FRED website.


> gross dollars

So, not inflation adjusted. Also doesn't capture the mix of what's being produced, i.e., a shift towards only manufacturing high value items versus being more broadly diversified and manufacturing things along a range of price points. In other words, a complete hollowing out of our manufacturing base.

Your same link shows $1.38T in 1997. Which is $2.77T today. In other words, DOWN in inflation adjusted terms from nearly 30 years ago.


"Data are in current U.S. dollars." Plus, the growth has been large enough to outpace inflation except for the last couple years.

The percent of GDP has been dropping but that is just that GDP has been growing faster. Which means that the US has been doing more valuable things than making stuff.


Paul Krugman made this point in a podcast with Ezra Klein. People remember a time when manufacturing was 30% of the economy, but that will never return, because the economy grew far more than our appetites for stuff. His estimate was that even if it worked and jobs returned, you'd be talking about going from 10% of GDP to 12 or 13%.


> So, not inflation adjusted.

All dollar values on that chart are adjusted for inflation.

> Also doesn't capture the mix of what's being produced, i.e., a shift towards only manufacturing high value items versus being more broadly diversified and manufacturing things along a range of price points.

The chart does not capture the trend you speak of, assuming it exists.

> In other words, a complete hollowing out of our manufacturing base.

That’s not how I would put it, if you want to look at it through that lens, it’s your right.

I would say we manufacture things higher up the value chain and use the dollars we earn from making that stuff to import cheaper foreign commodities instead of manufacturing them here and using dollars to buy American made clothes and shoes and other commodity items at a much higher price than we can buy them from other countries.

We also export services and receive dollars in return, this is much more lucrative that manufacturing imo.


Declining absolutely does not mean “clear trend to zero”. There are a great many things which decline for a long time, but have a lower limit.


Bit pedantic there, aren't you? I suppose as long as a single factory is still open in the US we're doing just fine, it's not zero, right?


The amount of farmers is also declining, is that also an issue?


The only trend is the amount of labor in manufacturing. the US produces just as much or more than any other year. However we do it on far less labor.


Not sure how this comforts anyone. We need labor, there aren't enough spa management and pet groomer positions to build an economy upon. What good does it do for anyone that we manufacture more, if there aren't enough good-paying jobs to go around to support a broad consumer base for those same products you say are being manufactured without (much) labor?

Why would any foreign nation even want to manufacture goods to ship here, if there's nothing much to buy with our currency? If our currency does devalue, we run the risk of not being able to import what we need, and not being able to afford to tool up to manufacture it domestically. And yet trends are clear that in many industrial sectors US manufacturing has already fallen to what might as well be zero.


> We need labor, there aren't enough spa management and pet groomer positions to build an economy upon.

Is it your impression that spa management and pet care are the only working-class service jobs available?

Most of the trades are categorized as service professions in the statistics. So is construction.


You're expecting that in the coming months the demand for master plumbers will double or something? Or are you saying that the existing demand is already so high that it can do more than provide some fraction of one percent of the jobs that our nation of 300-million-ish needs to have a strong economy?

I think we both agree that one of us has unrealistic impressions of the big picture here. When we regularly here of layoffs that affect hundreds and thousands of jobs, welders and electricians can't absorb those unemployed to any great degree. Nor all of the trades put together.


But why do you expect manufacturing to do that? It's just not as labor intensive as it used to be, and if there's a recession demand for manufactured goods falls, resulting in layoffs.


We need jobs for everyone for various reasons. However we do not need factory jobs for everyone. The manufacture more with less people means those other people can move on to other jobs. They can start another factory to make goods.

There are plenty of jobs. Every person who isn't manufacturing is a person who can do something else. A modern car uses a lot more engineers. While we don't need many spa mangers, it is nice that spas exist and so some of those spa managers are needed.


Don't forget that people don't really want factory jobs, which suck; they want union jobs that pay well and don't kill them.


Why would the US and EU losing manufacturing be bad?

> How long can any country survive this kind of inequity?

What worries me more is that the US has been funding global military security through deficit spending funded by foreign investors (who got their dollars from US trade). We're cutting legs off that stool, so we might see more wars and a declining dollar, never mind fewer cheap imports.


> Why would the US and EU losing manufacturing be bad?

Because if they can't make thing you can win a war - just stop all their trade and then invade. When they are limited to stick and stone while you have guns war is easy to win.

Of course in reality the US and EU are not in danger of losing all manufacturing, and their military leaders are will aware of this and so put extra effort into keeping some important manufacturing in the country. Politicians are generally (but not always!) aware of this and try to be friends with others who can make things you don't make locally.


You lost me at Kevin O’Leary. He’s historically been a dishonest and unethical snake oil salesman and I doubt he’s changed.

One of my career highlights was having him explain how much it will do for my career to do his project at a discount (I was helping a friend as a favor) and I told Kevin that it was just as likely to have the opposite effect.


> You lost me at Kevin O’Leary.

That's an unreasonable position to take. What matters isn't who says something at all. It's if what the person says is true. And, in Kevin's case, what he is saying is 100% on point and correct.

Aside from personal experience, I have met many entrepreneurs who got shafted by China's approach to business and intellectual property. One of them had to shutter his company barely six months after introducing their first product. The product was successful enough that it got cloned very quickly. They introduced a cloned product at half his price. Orders evaporated. He had to let go of his employees and close the business.

Whether you like it or not, what O'Leary says in his videos is 100% accurate and true. Your experience with him is absolutely irrelevant and not worth discussing.


> In other words, the relationship with hundreds of countries has been very one-sided for a long time. US industry needs to export to thrive, but if countries like Turkey impose 140% tariffs on our autos and trucks, markets are de-facto shut down.

These comparisons (and conclusions of one-sidedness) always leave the greatest benefit the US has enjoyed: access to a massive labor force willing to do work most Americans aren't[1] at wages lower than are Legal in the US.

[1] https://www.cato.org/blog/americans-think-manufacturing-empl...


Kevin O'Leary is not a credentialed economist.


Thankfully one does not have to be a credentialed anything to be right. All you need is to present evidence for anyone to reproduce your claim. A ten year old kid not even out of elementary school could be absolutely correct if the evidence supports what is being claimed.


I think you do a good job of high-lighting the underlying problem.

Which is not being discussed enough.

And that the current situation can go on a long time but not forever.


My only complaint with China's intellectual property theft is that they don't share.

It's my genuine belief that the vast majority of intellectual property ownership is purely to draw a moat around a country's oligarchs. Copyright does not protect creators and patents do not protect inventors[0].

Trump's thinking is:

- America used to have lots of tariffs in the 70s, and lots of jobs in the 70s,

- But we got rid of the tariffs and the jobs moved,

- So if I put the tariffs back the jobs will come back!

Problem is, we're not in the same market we were in the 70s, and all those tariffs risk turning us into Brazil. More specifically the reason why the intellectual property system we have is fucked is because it's designed to let corporations move jobs to foreign countries while still maintaining maximum control over the end result. It's designed to facilitate neocolonialism.

The "open and balanced" global market you're decrying was, until recently, heavily tilted to favor American ownership over everything. China and Mexico are there to castrate the unions: if you don't work for peanuts, we move the work to another country that will, and we don't worry about any of the business risk that entails because WIPO and Berne ensure none of the goods the other country makes get to compete with us unless we put our stamp on it.

You know what would really break this system? If China, Canada, or some other country were to junk WIPO and DMCA 1201 and start up a national lab to develop and distribute jailbreaks for shitty disposable American tech. Practically speaking, America can't stop knowledge from entering the country, and it would spur a huge explosion of new American businesses to fix the shit our own oligarchs broke.

In a world where you can't rely on intellectual property bullshit, outsourcing becomes a crapshoot, and it makes a lot more sense to pay workers what they're worth and focus on automation instead.

[0] Yes, they can and have been used by creators in the past, but that's not what the system does today.


> Trump's thinking is:

Objection, your Honor! Assuming facts not in evidence!


Manufacturing investment in the US hit all time highs during Biden, by far.


> the elephants in the room: Intellectual property theft.

Yup. China has been systematically stealing the IP of anything made in their country since forever. Companies kept falling for it because the potential market looked so big. Now BYD makes cars as good as Tesla and it's all #ShockedPikachuFace


Doesn't Tesla have an open patent philosophy? I've heard Musk say that if someone builds a better electric car and it causes the end of Tesla, he's fine with that.


He has said that, but I haven't seen any legal paperwork to back it up.

Not that is matters. Cars, including electric cars have been around for 100 years. There are very little important patents he could have. Sure there is a lot you can patent, but the vast majority is details that are trivial for any competent engineer to work around just using known prior art.

The important patents are likely in batteries which Tesla doesn't develop. Or chargers, but again the important details come with the battery.

TESLA might have some patents on the NACS connector and similar things. Those are easy to work around, but you wouldn't want to.


Are their shareholders fine with that?




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