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I'm confused every time this comes up...
Let's start here. We have a product. Lets say it is a hammer. It costs the exact same amount of resource (1 steel, 1 wood) and labor (1 Labor) and the same setup (1 infrastructure) to make that one hammer. The company that makes the hammer expects a return on their investment, of which 50% of that return must be reinvested back into paying for the upkeep and retooling of the infrastructure on top of paying for their management and any shareholder obligations. End result, that hammer is worth the same amount after production no matter where you make it in the world.
So how is a hammer made in the US "worth" more than a hammer made in China? It is not. It is the same hammer. The reason the hammer made in the US is priced so much higher is because production in the US is subject to a pile of No Value Added costs that benefit society but have absolutely nothing to do with the hammer itself.
Take for instance labor. We have minimum wage, overtime laws, social security taxes, Medicare taxes, FICA (unemployment). We have work place benefits like sick leave, maternal leave, vacation leave (paid time off). Be have other benefits like 401K retirement vesting and employer provided medical coverage. we have some of the most expensive labor on the planet, but I do believe many of us here will feel that we are either still not earning enough, or we are very much like our compensation package and will never be willing to work for less.
Take for instance Safety. We like going to work and then coming home at the end of the day as healthy and fit as when we went to work. We expect things like OSHA mandated railings, steps, ramps, and all manner of features that cost the company money to install but make it better for us to work there. In the US, our companies are further responsible for injuries on the workplace, so they have to have liability insurance to cover those potential injuries. And finally, we also expect out companies to provide proper Personal Protective Equipment like safety glasses, rubber glovers, perhaps clothing or aprons, all manner of which cost the company money but do nothing to make the end product worth more.
Take for instance the environment. We like clean air that does not burn our eyes and scar our lungs, that is easy to breathe and does not cause long term health defects. We do not like it when people dump toxic waste in the ground or in our waterways, we do not like it when companies take their trash and just dump it in the middle of nowhere. In China, we have some of the worst environmental catastrophes currently in existence, and it is much worse than what you might see in the press. I have lived in Korea and Experienced it myself - a strong Eastern wind at the height of the Christmas production season smells like chemicals!!
ALL of these items are No Value Added items - they do not make the Hammer worth anything more than a hammer made in China where there are none of these no value added costs. And when any company has to incur these no value added costs, the company will ALWAYS roll them into the final price of the product. They WILL NOT be taking a hit to their profit column. In fact, if you do ask them to take the hit to their profit column, they will sooner fold their business and go do something else where they can earn a better return on their investment than piddle around with a business that is essentially breaking even. In the business world, breaking even had might as well be going bust. The people who have the capital invest DO NOT want to break even; they expect a return on their investment and it had better be higher than the 3% or 4% they could make parking their capital in a low risk/low yield account.. You and I are no different, if we ran a business, we would want that business to make our time running that business worthwhile!!!!
So here we have an end product made in the US versus a product made in China. Our product is subject to all these No Value Added Costs. Their product is not. And at some point, our companies were given a carte blanche to move their production to foreign shores and only pay the fee that it costs to move the products over the water, which was once so very expensive where no common person would ever consider it, but is actually very cheap when compared to the balance of all those no value added costs.
And how did American labor respond? When places like Walmart opened up their doors, our working class celebrated by rushing out and buying their stuff as cheaply as they could while proclaiming how much they needed to be compensated and cared for on the employing end. This just does not add up - you cannot have your cake and eat it too!!!
These tariffs are meant to make the price of foreign goods comparable to what it costs to make things on our domestic market. It is not meant to make foreign goods OR domestic goods cheaper. And in the long run, NO goods will be cheaper for you and I the consumer; instead, we will be paying what we have decided we should be paying through the addition of all those no value added costs.
I'm not for or against the No Value Added Costs; they do make my life much more comfortable versus what it could be. I am not for or against the tariffs, for while they do make those lucrative foreign goods more expensive, they make up for the fact that those foreign production facilities do not have to pay all those lovely benefits we regulated for ourselves.
What I am plainly asking each and every one of us is to put your money where your mouth is and actually pay for the No Value Added costs you believe in (and buy domestic goods/support the tariffs) or quit being a hypocrite and demand that we remove these no value added regulations on our domestic market since by ACTION so many of us have no intention on actually supporting what we so proudly claim we believe in.
