Why Tariffs Won't Work

I know, I know.  You (and I) are already tired of reading about the insufferable idiocy of Trump's policies, not to mention his incoherent verbal ramblings (Google "Trump groceries").  But here's something even the staunchest MAGA defender must recognize:  the fundamental premise of the tariff policy is flawed.,

Here it is:  We erect a tariff wall, so goods are more expensive to ship to the US; companies have to charge more for their goods made overseas, and so they see their sales plummet.  Then they say, "Hey - what if we produced our goods in the good ol' USA?"  Boom - more industry in America.  Lower prices.  Jobs!  MAGA!

Well, outside the fact that by the time any new factories are built and operating in the US we are two presidents down the line and the tariffs are ancient history, there's another, more fundamental problem.

Carlo Versano, Newsweek's political editor, addresses this problem in today's "The 1600" e-mail newsletter (still don't know how to link to them, sorry).  He uses Nike as an example.   Half of Nike's shoes are made in Vietnam.  There is now a 46% tariff on Vietnam.  So Nike - an American company - is out of luck, right?  Not going to be able to sell shoes with a 50% markup to pay the tariffs.  So - make them in America!

OK - let's assume that the tariffs are still in place and the world hasn't ended yet (a big ask) five years from now, and Nike has just spent millions on a new factory.  Let's start hiring Americans!

Right now, Vietnamese workers in Nike factories in Vietnam make, at most 10,000,000 Vietnamese dong (VND) a month, which sounds like a lot.  But Google says that 10,000,000 VND is the equivalent of $387.52 US - which is not a lot.  Per month.  And these are the best-paid Vietnamese workers.

A major reason for outsourcing manufacturing overseas is that labor is so much cheaper.  So much so, that a substantial number of Americans will not buy products which are made in the equivalent of a maquiladora, an overseas factory where workers - mostly women - are exploited in terms of pay and conditions.  

Would you take a full time factory job for $387.52 a month?  Right now the median factory worker's monthly salary in the US is almost ten times that - $3119.16.  How does building that factory and avoiding the tariffs make sense now?

Maybe by then the post-apocalyptic economy will be so compromised that $387.52/month will look good.  But then who will buy all the shoes?

Good lord.