Stable markets with bad outcomes are not worth defending on stability alone.
> It does not create very accurate business decisions
The business environment is not great. It does seem some part of that is the result of cheap Chinese goods that have displaced labor _and_ environmental costs flooding foreign markets. That China even uses proxy countries to push out even more is instructive.
So, if not tariffs, then what should we use to solve this?
I’d argue that tariffs that increase at a known rate are better than surprise large ones. Even a 1% increase a week every Monday for a year lets everyone’s supply chain adjust gradually. You’ll know within a few weeks how your product is affected and you’ll plan for the increase over the year. That’s probably still too fast though, since factories take time to build and the whole point is to encourage local manufacturing. Given the 4 year term trump could have gone for 3 years of increases with the hope that companies would start building factories and have them running by year 4.
Not imposing ludicrous tariffs based on flawed economics on the entire world at once?
Not imposing tariffs with no warning on your closest allies and attempting to bully them into submission?
Not imposing huge tariffs on some of the weakest nations you trade with (e.g. Laos, Vietnam).
Not changing trade policy radically every few days and announcing it on social media?
Not crashing the stock market, announcing a reverse on your social media platform, then boasting about how much money your billionaire friends made?
Not calling one of your largest trading partners peasants and the then very clever, alternating between insults and praise like a two-bit mobster?
This administration has made America a laughing stock; I don’t think many Americans realise just how much trust has been burned with allies since ‘liberation day’.
It's a simple formula based on balance of trade.
> tariffs with no warning
Some Hacker News types like to bury their head in the sand when inconvenient political news occurs but to say this happened without warning simply flags you as part of this group.
> on some of the weakest nations you trade with (e.g. Laos, Vietnam).
There is room for these countries to buy more American goods. These two countries also rebadge and ship out a lot of Chinese goods to evade tariffs.
> changing trade policy radically every few days and announcing it on social media?
So, do you want warnings, or not?
> Not crashing the stock market, announcing a reverse on your social media platform, then boasting about how much money your billionaire friends made?
If you didn't make any trades during this period how was your portfolio actually impacted? I would assume this is the majority of non billionaire investors. So the only ones who lost in the crash were the same billionaires.
> calling one of your largest trading partners peasants and the then very clever, alternating between insults and praise like a two-bit mobster?
Does that trading partner also act like a two bit mobster? If so, wouldn't this just be turnabout, or why is deference to hostile economic partners justified?
> has made America a laughing stock
That's an absurdly biased point of view.
> I don’t think many Americans realise just how much trust has been burned with allies since ‘liberation day’.
Not much. They didn't actually "trust" us before. I'm not sure how you'd measure that anyways. From my reading of foreign news they're mostly taking it in stride, having seen this coming since last year, and not being particularly surprised by it. This zeitgeist only exists in half of America right now.
It certainly is simple.
> Does that trading partner also act like a two bit mobster?
The US is comparable to the dictatorship of Xi now? I suppose the new leadership style is similar.
> From my reading of foreign news…
The very high level of these tariffs and their global scope and speed of imposition was a huge surprise to (former) US allies, and even to many in the US.
PS I’m not American
"Simple" is why it put 10% on an island with no humans and no manmade structures separately to the country which owns that island, and also tariffed another island that's technically British but which the British leased to the US military.
"Simple" isn't what you want to decide a complex trade policy for a complex economy.
> That's an absurdly biased point of view.
Hello, I'm in one of those foreign allies. We are, in fact, laughing at USA for shooting itself in the foot like this. On the other hand, the bit where Trump is also refusing to rule out military force to annex some of us? We take that seriously.
> Not much. They didn't actually "trust" us before. I'm not sure how you'd measure that anyways.
We used to hold the US in high regard. "Leaders of the free world" etc.
But also, relatively stable economic position, stable currency, reliable government that repaid debts, etc.
Even though Trump 1 happened, we knew it would come to an end, and we thought you would finally be over it — especially given how it ended.
Now, we don't. And many of us will be looking to China as a more reliable (for us) trading partner.
It's hard for me to overstate how wrong this is. In my country Denmark, everyone, everywhere is talking about this and people are generally worried. I hear it in the supermarkets. We absolutely did trust the US until now. For instance, the entire Danish public sector runs on Microsoft. Nobody ever considered that to be an issue. Now there is political talk about how that can be undone. Several of my peers who read HN and considered US-based, YC-backed to be the ultimate way to launch a startup are talking about the liability involved. Mind you, this is not the typical "I hate America!" rhetoric that has always existed to some degree everywhere, this is risk management: "Can I trust that the US is stable enough for me to bet on?"
You may not think it matters because the US is as strong as it is, or maybe you don't care. But the trust and thereby soft power that has been destroyed in these few months is generational.
The simple fact Trump was voted in again denotes that the people of the US is not to be trusted.
At this point, it doesn't matter if Trump disappears into a void at the end of his term.
22% of people in the US voted directly for Trump. That's 22% of people that think his mode of operating is great presidential material.
I cannot trust doing business in a society with such a large proportion of either idiocy or malice, which includes wealthy and influential individuals!
The last 15 years has changed the fundamental stereotype of a US citizen. And while I personally know a few US citizens who are trustworthy, competent, lovely people, this marks an inherent bias in decision making.
From here, whatever Trump does is simply reinforcing the stereotype.
That might be the read, but it was people who were not happy with their lot in life and just saw same old same old as options while Trump was different. People in the US mostly don't think about the EU.
Cognitive dissonance suggests they have to keep supporting the current regime and whatever it says,because to change their mind is to realise the horror of what they've done.
* Reshoring incentives
* Regulatory reform to remove barriers to building things
* Strict export controls around AI, robotics, and fusion
* Massive subsides for production of useful humanoid robots and deployment of useful fusion power generation
To the extent that tariffs are considered at all, it should only be if they're implemented with bipartisan support, selective with specific strategic goals in mind, gradually phased in, and explicitly long-term policy. Extreme tariffs without clear staying power are just disruptive for no good reason. They won't change business behavior; they'll just temporarily jack up costs, create an unnecessary customs backlog, and roadblock some commercial activities entirely.
Even if implemented carefully, I would argue that tariffs in general are counterproductive in the long run. If a domestic industry isn't internationally competitive, the goal should be to fix that, not insulate it from competition.
So, Trump's policies should be seen as an attempt to reverse for Americans' benefit damaging policies from before which are still active. Now, whether that will do good or harm in the long term is anyone's guess. We already see companies investing more in American infrastructure, though.
Single player, multiplayer.
Sure this seems like a great way for if you can sustain a multi-decade effort
If you have 3.5 years to re-negotiate a deal, maybe you need to move faster.
Easier to onshore manufacturing with multi-year timelines, but you don't need multi-year timelines to impose tariffs on carefully selected industries, not penguins and your existing industries' key suppliers.
>If you change your policy multiple times
you're missing the forest for the trees. the policy has not changed: bring manufacturing back to the US.
> ... some were concerned about the law's provisions favoring American industry. ... the chairman of the 2023 G20 meeting in India, called it "the most protectionist act ever drafted in the world", asking American officials, "You believed in market forces and now you do this?" Other countries have begun to create their own similar laws. China requested WTO dispute consultations with the United States.
> 27 European Union finance ministers have expressed "serious concerns" about the financial incentives of the Inflation Reduction Act, and are considering challenging it. They have listed at least nine points in the legislation, which they say could be in breach of World Trade Organization rules. They were opposed to the subsidies for consumers to buy North American-assembled electric cars, as EU officials believe the subsidies discriminate against European carmakers. One EU official told CNBC that, "there is a political consensus (among the 27 ministers) that this plan threatens the European industry" and its supply of raw materials. In February 2023, the European Commission announced it would propose the "Net Zero Industrial Act", similar to the IRA, in turn putting pressure on the United Kingdom and South Korea.
Trump shouting about how his amazing tariffs are going to bring manufacturing back and then promptly cancelling most of them and bragging about how everyone wants to do deals with him and he's going to do beautiful deals isn't any kind of strategy for bringing manufacturing back, and frankly the fact that so many Americans are dumb or partisan enough to insist it is represents a bigger problem for US industrial policy than term limits
This is what it boils down to for you. Other people have a different opinion than you so they're dumb or partisan
In fact the only argument I can think of in favour of setting tariffs for the Heard and McDonald islands is that the average American that thinks that this level of attention to detail helps US manufacturing probably is less intelligent and capable than the penguins that live there....
Which is why if anyone wanted to actually bring manufacturing "back" to the US they would work with congress and pass laws that curtailed the tariff powers in a way that ensured that in the areas where you wanted long term investment the president would not have the power to change policy unilaterally. At which point the typical congressional gridlock would serve to ensure stability going forward and allow businesses to invest.
I don't think that the current administration has enough foresight to actually plan for such a scheme but I think they are smart enough to see an opportunity, to wit the posts on social media shortly before withdrawing some tariffs.
Who gets subsidized is indeed political, but I don't see a way to sidestep that since there's centralization as soon as you take action to prevent the currency from deflating.
The federal reserve, on the other hand, controls interest rates and other mechanisms which actually result in money "bring created" for practical purposes.
Or the mechanisms themselves might not actually have to be changed if we could cast off this myopic political red herring about "the deficit". What we perceive as the balance sheet of "the government" needs to include The Fed, Fannie/Freddie, etc. Treasuries owned by other countries are the equivalent of a big savings account. Treasuries owned by the Fed are the same as all the other other debt owned by the Fed - monetary creation / monetary inflation.
One way could be to send the message to the market that a certain area is strategically important and any startups will have access to extremely cheap loans and not have to worry about natural resources or personel.
Then follow up on those promises, take a step back, watch the Cambrian explosion that follows and when the businesses seems to have grown legs simply scale back funding and watch them fight it out. One could even say that is exactly what has happened in the world several times over. It is not unique to China.
Heck, it's why the US has been (not for long) a leader in medicine. We've historically dumped huge amounts of money into medical research through the NIH.
Biomedical companies don't like research, they like making money. Research is expensive and by its nature filled with deadends. A biomedical companies would much rather take and run with cheap (to them) NIH research.
Whereas in a tariff situation, you are penalizing the consumer for creating an externality (foreign dependence).
So, knock on effects can dwarf direct effects. Tax foreign computer components at some insane rate and perhaps you get a domestic market but you could also see companies start moving their US data centers to Canada and Mexico. Which then has it’s own economic disadvantages.
Insane rates will of course have insane effects. Which is a separate issue.
I think that's a really good point. It's extracting money from consumers through taxes and handing them to industry in the hopes they innovate.
Tariffs though. In that case you're extracting the money from the consumer (through the international organizations being taxed) and giving the profits to the government. What are they going to do with it?
Then they organized a bunch of morons to create an school teaching not to do that, celebrated them so they would teach every foreign school, and managed to stop most of the world from competing with them. But a couple of decades later everybody in a position of power there was a moron from that school.
I'm not here to defend the current approach, but what you're describing sounds like a centrally planned communist / state-directed economy or something. Is that really the way forward?
Replace garlic with whatever industry it is that the gov wants to strategically invest in: semiconductors, automobiles, aerospace, weapons, renewable energy.
What they are describing is basically what every sane government does, and what the US used to do until, er, a few months ago.
If you consider most western countries to be centrally planned communist states (including the US up until very recently), then I don't have anything else to argue.
You may think this is fair, while others disagree. As there's no "world government" arbiter for these kinds of actions, there are only the actions your country takes, and the actions other sovereign countries take in response - for example, all countries in the world could ban import of anything produced by your burgeoning state-aid factories, leaving you with only a domestic market to sell to; https://en.wikipedia.org/wiki/Dumping_(pricing_policy)#Anti-...
I said nothing about fairness. What I said is that every government and some point or another makes use of protectionist economic measures.
> for example, all countries in the world could ban import of anything produced by your burgeoning state-aid factories
This just doesn't happen, at least not for the reasons you mentioned.
China is a good example, as it gives many forms of subsidies to its industries. Other countries respond with a mix of measures to protect the industries they care about.
Virtually all the world's nations are voluntary members. Sure, many criticize it for being a tool of the USA and other western nations to browbeat other nations into shape (e.g. China). There is merit to this claim, but obviously it is not so clear-cut. However, it can't be denied that the WTO has been a tremendously useful tool for the USA and its allies to shape world trade. Somehow the 45th president of the USA thought the USA would get the short end of the stick here and started to obstruct WTO proceedings in 2018. The WTO has lost a lot of its influence since then, removing a powerful tool from the USA's arsenal.
Make of it what you want.
https://en.wikipedia.org/wiki/1999_Seattle_WTO_protests
I think this is the root of the disconnect. A lot of people say "wait, Americans wanted X because it's a useful tool for projecting American power" - whether X is the petrodollar, the WTO, free trade, whatever. But largely it was one segment of Americans that wanted and benefited from it.
Similarly, the windfall of finding oil off the coast of Scotland in the 1970s made fat stacks of cash for Britain. Maggie Thatcher did not spend that on deindustrialising Scotland. She did not spend it, like the Norwegians, on a sovereign wealth fund that would benefit everyone in the country. Instead, she spent it on revitalising the old docklands of London, and now they're the epicentre of high finance, where the UK makes most of its money in financial services -- mainly for the people who work in that industry, and the South East of England where they live.
These choices ruined the lives of large swathes of the country. But they hugely benefitted the country overall. Were they good choices or not?
So when we talk about “a useful tool” in the American toolbox, we should keep in mind that tool mostly, or at least has the perception, of benefiting only the rich.
[1]: https://www.econlib.org/library/Enc/bios/Kantorovich.html
Just because some industry gets subsidized and/or ran by the government, doesn't mean we are now all communists. Every government has SOME industry that is ultimately state ran. Fire departments, police, and education are prime examples of nearly universally state ran systems.
There are some industries that just, frankly, work better when state directed, not all of them, but a few. Private fire departments don't work, neither do private police departments.
This is not nor has it ever been an all or nothing thing.
And the events of the last 30-40 years have shown why this is a beyond foolish approach. The 47th and MAGA didn't rise out of nothing, they rose out of the economic devastation brought upon by completely unchecked turbo-capitalism.
No. The events of the last 30-40 years have shown that extremism is beyond foolish.
Extremism on the other direction got much quicker and way more destructive results.
Nuclear power. Solar panels. CPU manufacturing. Weapons manufacturing. Biomed research.
Capitol intensive projects require coordination. Especially projects that can take decades before they pay off.
yup
> probably subsidise them
yup
> communicate very clearly what you were going to do
Probably not. At least, not until right before the ratchet up. You'd want to first subsidize then once industries are starting to build up, you'd want to start the ratchet up. You probably also wouldn't want to say "We are doing this because we want to be better competitors" or whatever. It'd be better if you said something like "We believe country x is doing terrible thing y and for the safety of our country and others we are going to apply a tariff on good z until x stops doing y".
But yeah, universal tariffs are the dumbest idea in the world. We've essentially sanctioned every single nation which is going to massively damage us and manufacturing. Going to be real hard to unwind this.
But you would make damn sure you communicated when the tariffs would hit punitive levels so the rest of the value chain knew and had already had chances to find themselves domestic suppliers
Honestly, just subsidizing is a lot simpler to do and it doesn't run the risk of making the world mad at you or triggering retaliatory tariffs.
[1]there's a certain irony in one of Biden's last actions being to impose tariffs in a way which massively helped Tesla, and one of Trump's first being to propose tariffs that could seriously hurt its supply chain if they don't get exemptions...
The way Trump has done things, any company that manufactures in the U.S. had better be able to get by with just the domestic U.S. market, because exports to Canada and Mexico aren't likely to be significant for quite some time, even if Trump backs off quickly. Lasting damage has already been done.
________________________
[1]It remains to be seen if Mexico will eventually retaliate.
[2]Perhaps not favourably in terms of price/quality competitiveness, but certainly in a geopolitical "support your neighbour instead of China" sense.
And this perception has worked in Trump's favour. "Those weak irrelevant people up there are taking advantage of us, time to teach them a lesson" works well when the people you're telling it to don't realize "those people" are their single biggest customer and a source of wealth for them.
American business people aren't generally accustomed to treating their customers this way. I hope they come to their senses.
There's a while before another election and longer while before the person imposing tariffs would expectedly leave.
There is absolutely, unambiguously no Constitutional method by which this will ever be true.
https://www.npr.org/2025/03/31/nx-s1-5191889/is-trump-runnin...
22nd Amendment:
> No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once.
12th Amendment:
> no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.
You can produce the same bullshit arguments for literally any law in existence because language is inherently ambiguous. If someone starts wiggling into, "well technically it's a bit ambiguous whether we're allowed to mow down peaceful protestors with machine guns," it is incumbent upon all of us to say "no, actually that's not ambiguous."
Courts will look to the public attitude to assess these arguments, and the public attitude should be that blatant accounting tricks like the VP switcheroo are incompatible with both the language and intent of the law.
> But winning an election is not the only way a person can become president. And there are hypothetical situations involving presidential succession, Baude adds, that are "not addressed as fully" by the Constitution's text. They reveal ways in which the common understanding of the 22nd Amendment's presidential term limits could be challenged in court. One theory: Trump could become vice president and then president in 2029
> Still, in court, a lawyer could try to argue that being a "natural born" citizen, at least 35 years old and a resident within the U.S. for at least 14 years are the only presidential eligibility requirements specified in the Constitution, says Stephen Gillers, a professor emeritus at New York University School of Law, who proposed in 2004 that Clinton run for vice president.
I'm unconvinced that the Supreme Court will look towards public sentiment.
There is no way to write words that preclude all such interpretations, that does not make all possible interpretations valid or reasonable.
> I'm unconvinced that the Supreme Court will look towards public sentiment.
Yet stunningly, SCOTUS decisions overwhelmingly align with cultural attitudes of their time because that is in fact the role of SCOTUS — to adapt interpretations of text to the current cultural moment. That's why it's notable in the few occasions where they conflict.
I know originalists and textualists like to act otherwise, but they're liars, and you know this because they do in fact rule against the text of law when the text conflicts with their cultural imperatives.
Secondly you may wish to argue the Supreme Court has acted in such a way historically but recent history clearly demonstrates otherwise:
https://www.pewresearch.org/politics/2022/07/06/majority-of-...
Everyone knows Presidential terms are meant to be limited to two. Everyone knows going for a third term would be an accounting trick. They know it, you know it, I know it.
Your selection of one example out of the 47 cases SCOTUS decided that year (+ countless cases they didn't grant cert to) is evidence of my point, not yours. How many of the other 46 cases can you name? How many of the other 81 cases between then and now?
I'll guess you could name fewer than 4 of them, ergo, as I said: "That's why it's notable in the few occasions where they conflict."
Nor did I say "the court follows public opinion."
I said "courts will look to the public attitude to assess these arguments", which is true, and "SCOTUS decisions overwhelmingly align with cultural attitudes of their time" which is also true.
And yes, the Presidential immunity argument is exactly one such argument: the pro-dictator cultural movement in the US is significant and vocal, while the anti-dictator movement is full of equivocators like yourself who say, "well you know, the Constitution is a bit ambiguous on this point..."
So yes, actually, that decision is an excellent case in point, and a clear reason that SCOTUS should know the American public has no pseudo-intellectualized appetite for a third term.
Your original comment was this:
> There is absolutely, unambiguously no Constitutional method by which this will ever be true.
So which is it, there's absolutely no ambiguity or there is some?
> And yes, the Presidential immunity argument is exactly one such argument: the pro-dictator cultural movement in the US is significant and vocal, while the anti-dictator movement is full of equivocators like yourself who say, "well you know, the Constitution is a bit ambiguous on this point..."
So you're saying that the Supreme Court ruled Presidential immunity because of vocal public opinion for dictatorship but suddenly the same court won't rule in favor of interpreting the law to support a third term?
Seems contradictory chief. Regardless I personally hope it doesn't come to a court decision but we'll see in 4 years.
If congress turns heavy blue in 2026, they can rain hell on the mild conservative goals that Trump seems to have taken a nuclear approach to. Congressman do care about their seat, and they do get scared of losing power. Right now Americans are particularly sensitive to price increases as well, with the pandemic inflation still fresh on everyone's mind.
I personally am not seeing what influence Congress could push that will hinder the current executive branch even if it wished to.
More protests needed. This is tyranny-lite in action, huge overreach by the executive that I'm pretty sure the hallowed founders -- that people always talk about with reverance down there -- would be horrified by. 18th century revolutionaries would be disappointed to see the way people are rolling over.
For example, several car makers makes cars in Canada, Mexico and the US but sells them across the borders (and globally). Honda makes Civics and CRVs in Canada but sells them in the US, but the Accord is made in the US and sold in Canada. So now if there are tariffs on car imports and especially if there is also a reciprocal tariff, Honda gets hit both ways. What would they do? Make some civics in the US and some in Canada? Seems very inefficient.
[1] https://semianalysis.com/2025/04/10/tariff-armageddon-gpu-lo...
Trade imbalances are simply currency imbalances that haven't been allowed to find their own levels - what you can't do is have an artificially high currency (by requiring all global oil sales be made in it, creating an artificial scarcity) and not have a trade deficit - you can't have your cake and eat it too
can you explain it with more details?
If your currency has a lower value, it’s cheap for others to buy your exports, but expensive for you to import goods.
I’m sure this sounds bad to someone, but if I was America, I wouldn’t try to put the gift horse into the wood chipper.
It's why moving to renewables would be catastrophic for the US. And for all of the big Fossils, including Russia and the Saudis. And the smaller second-order beneficiaries like the UK who make money from "services" - moving the big money around and avoiding taxes on it.
We're in a messy transition to a post-fossil global economy. It's going to take decades, and it's not obvious how much will be left standing when it's over.
But one way or another, it's locked in and unavoidable.
I don't know how effective that will be but it at least seems more coherent than these goofy tariffs (whatever people think of tariffs overall we absolutely cannot keep shifting them week to week).
We absolutely cannot create the expectation that we plan to get what we say we want: zero trade deficits.
If we even succeed in making the rest of the world believe we're going to do this it will be catastrophic. So much of the advantages the US enjoys rides on trust and goodwill, and zeroing trade deficits would wreck the world economy and destroy trust in the US dollar as a safe haven. Just like paying down the national debt would.
(Pedantically: it means the rest of the world has exactly as much US currency as the US has the rest of the world's currency)
We just hit pause on a major product development effort in order to go back and re-evaluate some of our vendor choices. Specifically to see how we can eliminate as many dependencies on US companies as possible. Fortunately we were relatively early in a 18-24 month development cycle for a somewhat complex hardware device.
The company already started a project two months ago to look at how we can migrate off AWS and Azure and instead use domestic alternatives for our online systems.
For the hardware components this is a bit more work, but it looks like we can find replacements for most of the key items. Though there are a few components where we would have to rearchitect some of the systems to eliminate US components.
For us it is simple: we need stability and predictability. We have long development cycles and long lifecycles for the things we make. Stopping development and trying to eliminate things that depend on the US is a bit unreal and shocking, but management have to deal with the world as it is.
I know some of my colleagues at other companies in the sector are going through similar exercises.
Right now changes are taking place that will not be visible for years, but that will stick around for decades. The current administration in the US is doing real, long term damage to the US.
It is really weird for us (Europeans) to read hacker news and it see mostly indifference to what is happening in your country. You probably should worry a bit more about this than you do.
Of course, you won't make the same margins as EU+US business. Not sure if that is enough incentive to onshore consumer manufacturing.
https://www.pewresearch.org/short-reads/2021/07/21/are-you-i...
But it's also always been protective of the internal market and e.g. added tariffs on Chinese steel recently.
The EU has always been export driven.
Whether or not some third world country is worth developing is an economic question, not a moral one. And even if it is, the question of whether or not you will be able to monetize that relationship by the end of it is another one. What the chinse are doing now is basically IMF-style debt trapping of other nations, which doesn't seem like a successful strategy historically.
The bottom line is that if the natives don't want to cooperate with whatever civilization you're building, it's not going to work out. Look at what happened to the USA in afganistan (and pretty much every empire that stepped foot in there). I don't think that's racist, I think it is pretty optimistic outlook towards the sovereignty of nations.
There is a really great movie called Bitter Lake about this, by Adam Curtis.
If tariffs go down then moving manufacturing to the US was the losing choice for any company that chooses to do so.
Either way betting on current US consumption levels with US manufactured goods is a losing bet.
Then some future administration decides on detent and signs a free trade agreement to open markets or whatnot, yada yada. China marches right in and eats your lunch. Again.
Trade barriers do not do anything to address fundamental inequities in production efficiency. To be blunt: China is great at making electronics not because they have all the talent. They have all the talent because China is poor, still. The US is not (though it looks like we're aiming that way). Ergo Chinese production efficiency will be higher.
What trade barriers with China actually do isn't to bring manufacturing back to the US, of course. It's to move production from China to Vietnam or the Philippines or India or wherever isn't tariffed. Then of course we'll need to apply tariffs to them, and so on.
Since he's even taxing empty islands, I doubt the end result will be anything else than either not selling to the US or selling to the US with a grey market.
If you put tariffs on the whole world, it's basically the same thing as a global economic sanction, similar to what Russia suffered.
But they are going off a demographic cliff, and that is why they are investing heavily in automation. They just won't have the people to do this work in the future, and expanding abroad and investing in robots are the only options for them.
The average household income in China is equivalent to making $17K salary in the US, and on average, Chinese work 25% more hours than Americans
Average home in their Tier 1 cities is 20x annual salary, compared to a 7x ratio in NYC
It's still pretty bleak for the average person there- you see that reflected in the "let it rot" youth movement online
Having lived in China for 9 years, and left 9 years ago, I can't really justify calling China poor anymore. Ya, they have a huge rural area and they still have lots of poor people, but they have a huge middle class (even if it isn't a majority of the country) that can afford a lot of things.
That’s why China has (somewhat) inexpensive labor. It does not explain why China has far more plastic engineering talent, electrical engineering talent, etc than the US.
The US wasn't sleeping though. We trained a generation of software engineering talent that remains the envy of the world. There are whole web sites devoted to this "Hacker" subculture, even. Maybe we can find one.
Seriously: there's no problem here. This is the way economies work.
As to the poor part, after Xi is done with dumping treasuries, and subsequent US default and USD cratering, the salaries would be on par on both sides of the ocean (as they should be).
Which would also automatically solve the illegal immigration problem. And fentanyl problem (no money no honey).
Unless there is some hunker down period of isolation that'll make US manufacturing globally competitive somehow, all this will do in the long run is either isolate US manufacturers to the domestic market, or provide a temporary advantage that will disappear the minute the barriers are dropped.
Another big take away for me was that they highlighted who had been the chief customs officer over time. Controlling the flow of goods in and out is matter of pride for Shenzhen and China.
But ultimately, this is why America should look towards congress for enacting lasting change.
What chaos? The market going down a little bit?
CHIPS act is still in place
https://www.techtarget.com/searchcio/news/366622293/Trump-pu...
If that is repealed, it would be replaced by something with more favorable terms for the US.
TSMC is investing $65B to build three fabs in Arizona.
Are you against negotiating a better deal?
That is literally what my father and his friends dealt with as young men after dealing with the Cuban Missile Crisis as children.
I only dealt with this one time in 1st grade. Air raid drill, get under the desk kids and cover your head to practice in the event the Russians drop a megaton h-bomb on the school.
Or the stability of WW1 or WW2?
1990 to 2020 was a wonderful time, I feel so lucky to have lived my life then but that was a completely abnormally calm time in history.
But we had the GFC in 2008. Millions of people lost their homes, lost their job, lost their savings.
1990's were pretty stable.
Well... and massive investments. Where did those come from?
> It is not possible to do that, in US with 4 year election cycle
The great thing about Trump is he has made everyone forget that Congress exists and has these responsibilities.
> Next gov will just roll back all reforms, and redirects all money...
The other great thing is people forget Trump has donors and investors on his side who benefit from all these changes. The next administration will be just as beholden to these interests as this one is. The current US president is just a branded token of the elites. It's meant to keep the population in check not create a policy free for all.
This is objectively wrong.
Taiwan made tremendous economic progress during the period of one-party rule under Chiang Kai-shek and later his son Chiang Ching-kuo. During the KMT's authoritarian rule from the late 1940s through the 1980s, Taiwan experienced the "Taiwan Miracle". Land reforms in the 1950s boosted agricultural productivity and created a rural middle class. In the 1960s Taiwan shifted from an agriculture-based economy to an export-oriented industrial economy, and by the 1980s Taiwan had one of the fastest-growing economies in the world, with GDP growth rates often exceeding 8-10% annually. Chiang pursued an export-led growth model, encouraging foreign investment and industrial development, supporting industries like semiconductors, which is why you have TSMC today.
The KMT government also made major investments in education, particularly in science and engineering, hugely increasing literacy rates. All these strategic initiatives and policies meant that Taiwan became one of the Four Asian Tigers by the 1980s.
On a slightly related note, on Taiwanese social media today it is not uncommon to come across Taiwanese people lamenting that the KMT built the TSMC, and the DPP is selling it out. Whether this is a fair and accurate assessment of the DPP is another discussion, but this seems to be the sentiment among many Taiwanese these days.
> After retreating to Taiwan, Chiang learned from his mistakes and failures in the mainland and blamed them for failing to pursue Sun Yat-sen's ideals of Tridemism and welfarism. Chiang's land reform more than doubled the land ownership of Taiwanese farmers. It removed the rent burdens on them, with former land owners using the government compensation to become the new capitalist class. He promoted a mixed economy of state and private ownership with economic planning. Chiang also promoted a 9-years compulsory education and the importance of science in Taiwanese education and values. These measures generated great success with consistent and strong growth and the stabilization of inflation.
Intel has factories in the US.
"Trump and TSMC announce $100 billion plan to build five new US factories"
https://www.reuters.com/technology/tsmc-ceo-meet-with-trump-...
Democrats and Republicans are united on this. They all want semiconductors manufactured domestically.
Taiwan also seems to have a 4 year election cycle. It may be something about a culture that cannot think long term any more ...
Which issues? The phones were shipped, albeit with a long delay. Now, you can buy and get them quickly.
Sent from my Librem 5 daily driver.
I love FOSS as much as the next guy but you're being outright facetious if you can't see Purism's problem.
I'm not here to relitigate the whole Purism saga. I bought 4 Purism products, was one of the first people in the world to own a Librem 5, I invested (donated?). I love the company mission, I think it's fantastic that you're daily driving a Librem 5. But I'm not ready to engage again myself, and that's too bad, but I think a lot of people ended up feeling the same way.
Yes, they did have huge refund and shipping time issues and I don't trust their time estimations anymore. They almost went bankrupt and couldn't issue refunds for a long time. However this is irrelevant today, as their devices are finally available to order and AFAIK the refunds were issued. There were never issues with security, backdoors (unlike Lenovo, https://en.wikipedia.org/wiki/Superfish#Lenovo_security_inci...), nonfree software or the like.
Designing and selling the only existing phone made in USA, when everything is produced in China and has a risk of containing backdoors, is as far from nationalism as it gets. (And I'm not an American.) It's true innovation and an offer of a peace of mind for activists and journalists. Even though the USA turns into something bad, the phone runs an FSF-endorsed distro and provides schematics, so you can verify everything yourself (or rely on the community). You comment looks disingenuous to me.
> and an offer of a peace of mind for activists and journalists
Sounds like a trap.
Worst $20 I ever spent. The amount of spam I've gotten as an "investor" is fucking ridiculous. The amount of times I've opened my email to see an "investment opportunity" from Todd Weaver (originating from multiple email addresses, no functional way to unsubscribe) is downright insulting.
From the bottom of my heart: fuck Todd Weaver, whose name is at the bottom of hundreds of spam emails I've received going back years.
I can also provide you with examples of other people's less than flattering replies about the exact same issue that have somehow reached my inbox (I'm assuming due to a brief misconfiguration).
I know there's not a lot of money in them. But if you want sales at all you better update your hardware more often than never.
Install page says you need fairphone.com to give you permission to unlock. :-/
It's Pine64, their whole business model is «Here's the hardware, you're on your own now».
I've been using L5 as my daily driver for years now and I don't feel very constrained with its performance just yet. The most painful things are related to lack of features in its SoC rather than its age - such as no hw video encoding or camera ISP, which means that things that other phones do efficiently in hardware have to be done in software. i.MX 8M Quad isn't the best suited SoC for mobile phone use-case, but it was the best that was available back then given other constraints of the project.
Today there's still no abundance of such choices, but there actually are a few more interesting ones on the market. I hope we'll see some projects following through soonish, as I'll eventually need an upgrade path for my Librem 5 indeed.
An business should be able to buy cheap Android phones in bulk, install Linux, charge an extra $100/yr for drivers and support, and start a nice little business. Believe Purism already has a subscription where they provide vpn, matrix, and other privacy tools, so they are almost there.
Maybe they need an investor, but honestly the capital outlay should be tiny for the amount of goodwill and eventually business it would bring. With the trillions sloshing around with nowhere to go at the moment, it could change the world for the better.
Good luck with that. Unless you settle for Android middleware underneath your OS (like some existing projects do), it's a massive undertaking. You still need to invest a lot into R&D while you lose what's differentiating you in the process (in case of Librem 5, there are things like hardware kill switches, PGP card reader, replaceable M.2 modules etc.) so you can chase SoCs that will already be considered obsolete once you're done with the software anyway. Even Purism with their prices couldn't afford to use an unsupported SoC and relied on NXP's upstreaming efforts.
I suspect that if I was wrong and it was actually a viable path it would already be taken by someone. Maybe we'll see something appearing in coming years, as these days more vendors actually started to care about mainline support, but as it is today the landscape is still not that great, especially when it comes to SoCs that are actually targeting smartphones.
I think maybe that's where Purism went wrong. They tried to go pure from the get-go. But think it would be better to get a profitable product out first, and then invest in opening components, one by one.
I don't need a perfect device. Rather hardware getting better every year. Then I could upgrade, and they'd make more money.
I'm not interested in Android though, so I just wouldn't buy such phone no matter how cheap would it be. I'm not interested in upgrading every year either. Librem 5 is great, but unfortunately I'll need something to upgrade to in a few years anyway, as the Web has a tendency to only get heavier with time.
Grabbing some cheap Android devices is a path to nowhere. Otherwise we all could be just grabbing them and putting postmarketOS on them ourselves, as there's no shortage of such devices on the market.
For example my new starlite linux tablet is awesome and star is making money hand over fist. Because they finally built a good one and stopped making excuses. They develop firmware with coreboot and upstream patches to Linux.
That’s what a successful business is, you invest then reap the rewards.
I've been using GNU/Linux phones and watching this market for the last 18 years. If I'm a defeatist, please prove me wrong.
If you read the article, the founder of purism even says as much.
"After we were successful on the Librem 5 crowdfunding campaign, we took our own electronics engineers (EEs), and then we worked with Chinese design and manufacturing through 2018, 2019, and 2020, because that's where every phone is made."
So the only phone that qualifies for "Made in the USA" tag learned (at least in part) how to make it from Chinese engineer(ing firm)s.
Don't count on that. On Schneier's blog years ago, we brainstormed attacks on hardware in subversion discussions. One idea was putting a hidden chip in the board itself. Another was modifying the board's material to emanate secrets for RF attacks by a nearby attacker. There's a reason high-security at NSA required TEMPEST shielding. I wonder who prints the circuit boards.
On the chip side, substituting one of them with the same covers would be an easy attack. One team showed a tiny change at analog level could have subversive effects with low odds of being spotted. I wonder how they verify they received the correct chips.
Just from a domestic, manufacturing angle, the story sounds great. I'm grateful the company made sacrifices to make smartphones in America. I hope their example leads to innovation that drives the prices further down.
"we are doing the entire manufacturing process of all of the electronics, meaning resistors, capacitors, integrated circuits"
I disagree with this take unless the integrated circuits are designed and fabbed in America and by Purism. They're critical, high-value parts of the product that used to be piles of individual components before ASIC's. If not made here, I'd say upfront it's manufactured in USA "except for (percentage or function of) integrated circuits in it."
https://www.ooma.com/wp-content/uploads/cell-phone-cost-comp...
“we were able to take all those designs and spin up our own SMT, it's called Surface Mount Technology”
“run that through our surface mount technology by our line operators”
“meaning the printed circuit board or PCBA assembly”
So, he’s definitely not an EE. No EE talks like this when they are trying to explain the nuts and bolts to a lay person. Either that or the editor took liberties they shouldn’t have.
Have my upvote.
https://www.reddit.com/r/OutOfTheLoop/comments/4zzfp4/what_i...
People buy stuff competitively and that's it. There are modifiers, notably being rich enough that regular items prices make no difference to you, so you can buy all from your own country without affecting you too much.
But even if you are middle class, buying most items at a higher price just because they are from your country is just a waste of money from an individual utilitarian point of view. It directly affects people and they always favor that, even if in the long run doing so might have a second order effect that will affect them in worse ways.
Tariffs, taxations and special legislation is actually the only way to make some product competitive for your own country. Especially when they are a participant in the trade willing to take a hit just to corner the market. This is basically what China did for many things, so here we are...
Half the descriptions provided by those who made the devices were this sort of word salad because they concerned products which were obvious scams[0].
On person in particular was editing the description on the fly and was looking for a word so dad jokingly suggested "impedance". "Yes, thank you!" replied that person - her face lighting up as she added the word.
[0] Like a vacuum cleaner which was supposed to dispense a mist of medication. Initially rejected as there was no dosage control whatsoever, but I heard that eventually somehow it was certified.
I have also "spun up my own SMT". It's a 50 USD hot air rework station and maybe 20$ of consumables in a 4 meter square workshop (I live in Asia). It would be challenging, but possible, for me to assemble the PCBs in their photographs by hand. There are indeed a lot of people like me.
Are there a lot of people like you that are willing to do this as a minimum wage job? Because that's the real ask.
I won't assemble an entire smartphone this way unless I need to kill a lot of time and don't have anything better to do.
I have a coworker who "couldn't hack it" as a paralegal and is now working in the line for server assembly. Or another coworker who came from a major daytrading firm to work quality control with me.
There's a somewhat better discussion of this phone here.[1] At least the making of the board. Board manufacture, SMT pick and place, and soldering are all automated, and the equipment is widely available. Everybody does boards roughly the same way.
The assembly problems in phones come from all the non-board parts. See this iPhone teardown.[2] Look at all those little subassemblies. Some are screwed down. Some use elastic adhesive. Some are held in place by other parts. They're connected by tiny flexible printed circuits. That's the labor-intensive part. Usually involves lots of people with tweezers and magnifiers. They don't show that.
So here's that part of assembly in a phone factory in India.[3] Huge workforce.
For comparison, here's a Samsung plant.[4] More robots, fewer people. Samsung made something like 229 million phones in 2024. If a US company produced phones at Samsung volumes, the price would come down.
[1] https://puri.sm/posts/manufacturing-the-librem-5-usa-phone-i...
[2] https://www.ifixit.com/Teardown/iPhone+13+Pro+Teardown/14492...
It would be amusing if after all this turmoil the work came back to the US but it barely increased manufacturing employment.
[0] https://fred.stlouisfed.org/series/manemp [1] https://www.macrotrends.net/global-metrics/countries/USA/uni...
Then you hire 4 guys to maintain all the automation between 5 factories they drive between as needed.
you are no longer an animal spending most of your waking life searching for food, nor do you build your own shelter, make your own clothes, construct tools, etc
yes, automation seeks to eliminate factory jobs, most of them are pretty awful anyway. this opens up new options as every step along the way always has
and yes, the change isn't always easy for the folks that have to find something new
Second, yes part of the strategy is to force allies to self assess themselves and their dependence on US power. Trump and Nixon had a personal relationship and his fundamental strategy in business is based on creating uncertainty, it’s literally like point 1 of his “Art of the Deal” and however another part of that strategy is being willing to walk away.
We are living through a turning point in history where current US administration has reversed the open policy to China and for national security reasons are working to re-industrialize and militarize quickly as a strategy to deter Chinese ambitions.
It’s fine to disagree and argue the neoliberalism strategy of globalism isn’t dead but politically it is. Of course that world order is fighting to survive where it can, UK, France, Germany all putting up resistance to the rise of neo-mercantilism and nationalism but we will see if canceling elections, restrictions on speech and jailing politicians will work to block it.
Not true. The US imported 3.5 billion dollars of goods from Russia in 2024, and exported 500 million dollars of goods.
https://ustr.gov/countries-regions/europe-middle-east/russia...
No, there is trade, $3.5b worth of it. But even if there wasn't, why would they get an explicit exemption?
If you can design something which can be assembled in that simple way, high-volume manufacturing can be automated cheaply. Smartphones are not built from parts intended to be assembled in that way, but that's a decision based on cheap labor, not one that's inherent in smartphone design.
Design for assembly was more of a thing when manufacturing was in the US. The Macintosh IIci was designed for vertical assembly. Everything installed with a straight-down move. The power supply outputs were stakes that engaged clips on the motherboard. No internal wiring.
Then Apple gave up on US manufacturing.
Then Tim Cook gave up on manufacturing. Which was how it saved Apple.
Steve Jobs always had a somewhat fantasise vision of dark factory. He wasn't able to accomplish that when Apple was still fighting for survival. But now Apple has more cash then it knows what to do with it.
At the very least you can't really make the screen soldered-on, and the simple connectors used in Nokia might not work out for such high bandwidth use case. Same with cameras.
Thin ribbon connectors are one of the hardest things to automate from what I remember regarding Sony's efforts to automate PS5 manufacture.
This is the heart of the matter. The US has abandoned skills because cheap labor in Asia. An example from the story about dealing with touch screen tests: they're employing disposable workers to toy with pinch and zoom testing; something easily automated with a simple machine and image comparisons. How sad. This is an actual regression in technology.
Here's a useful smartphone that could become big:
- Solid state battery that will last at least 5 years.
- 5 year full warranty.
- No connectors. Inductive charging only.
- Screen as unbreakable as possible.
- Sealed unit. No holes in case. Filled with inert gas at factory.
- Totally unmaintainable.
- US $199.95.
[1] https://tradingeconomics.com/china/exports/united-states
The problem is, there are no Western manufacturers left that have the brand loyalty to bring such a large volume of purchases to the table.
The giants are so giant, it's almost impossible to compete with them in the consumer mass market. The only way you can outcompete the giants is by focusing on tiny small niches where consumers are willing and able to pay a premium - the government (auditable supply chains) and eco-progressives. That's where Tesla started, that's where Purism and Frame.work live.
Chicken, egg
It's a transcript of an informal podcast interview with - clearly - a marketing guy who may or may not have 'engineer' in his title.
I've worked with dozens of guys like this over the years. They could elegantly bullshit their way through any discussion. They had an answer for every question, even when they didn't.
There's a reason they don't send the design engineers to trade shows.
Steve Jobs was one of these people. A clever marketing guy who relied on others for technical heavy lifting. I suggest going back and re-watching some of his presentations, like the unveiling of the iPhone. Every word he said was meticulously planned and very rehearsed.
Not that any of that matters, because engineering is a team sport, and that's where taking this too literally becomes a problem. Just how like a football team is made up of different skills and varying physical builds. The reason they don't send the design engineers to the conventions is because they are too honest and will spill the beans on the product's shortcomings, or inundate the customer with irrelvant details.
Yeah, getting upset an EE who has the skills to build a cellphone from scratch isn't actually moonlighting as a writer doing a blogspam version of a podcast interview fits that quite well
Before Apple entered its iPod era, Jobs could do a reasonable job of taking questions from a technical audience
If you know everything about your product down to the most low level technical detail your product is either a brick (and I think that even that is too complicated) or you greatly overestimate what you actually know.
We can call product design "marketing" but that's a bit like calling Linus Torvalds a "code monkey"...
Just because he didn't move pixels across the screen doesn't mean he wasn't setting the design language, defining taste, sweating detail and holding the vision. No-one would suggest that a show-runner didn't make TV, or that a director wasn't a filmmaker. Jony Ive's design changed (and improved) immensely one he was working closely with Jobs. Once Jobs was gone things drifted. Similarly Pixar was hyper-focused under Jobs then began to drift as soon as he was no longer involved.
That's the currently-fashionable revisionist history. But the truth of the matter, from his contemporaries, was that he knew is stuff. He was also good at marketing.
I suggest going back and re-watching some of his presentations,
I suggest going back and re-reading some of the print interviews he gave to technical publications. There's no question he knew what he was talking about.
Read anything on folklore.org, and you can see that's not really the case. He prescribes a lot of stuff that they just had to get around, typical pointy haired boss stuff.
Space stuff is another domain that's just chock full of this.
If you are long term greedy, like China, a great strategy to capture dominance of a discipline would be along the lines of how to boil a frog. Start by sending grad students to the top universities, ensuring they work for the PIs for cheap, bring as many of them back to China as you can, but tolerate a leaky return path so as not to stir up notice. Advertize their high post-training employment rate back to the universities to keep their valves open even as you start developing your universities internally, and eventually throttle down the outbound grad student pipeline. At some point after it's too late, the top universities, and their countries, look around, bemoan the lack of people in their discipline, and then just give up because by now they're old and tired.
Seems like something that has happened in chemistry, physics, and EE for sure. Once you start thinking this way, all sorts of things start making sense. Like maybe they looked at solar as a cheap, low threat point of entry for developing silicon fabrication capabilities. Software engineering, being a relatively soft skill, comes along for the ride.
Not sure about other fields, but if AI can take on a rapidly increasing set of fields, you start seeing this as how China primarily harvests not IP but workforce training from the global West, then technologies happen to fall out, then one day China has solved for their own graying work force at the same time they've solved for global economic dominance.
And a non-trivial contributor was the US governments (I blame the states too) defunding education.
Same for "bringing many of them back": I read it at first like it was akin to some sort of spy agent network when in reality "bringing back" probably means various incentives, not some forced thing. Carrot, instead of stick.
Yes! Which the US incentivizes by a) underfunding K-12 education, reducing the internal applicant pool, b) competing grants in a way that incentivizes PIs to grasp for cheap labor. Additionally, the individual states also incentivize this. Look at the UC's own statistics: since 2009 the highest chance of acceptance goes to foreign, ethnically Asian applicants. https://news.ycombinator.com/item?id=20321493
2) RTS-game-esque control of the grad students
Yes! Having been in the room when one of those grad students got a very stressful call from home (like broke down crying multiple times), it's definitely not all carrots. And the removal of carrots eventually looks like a stick.
3) Seems like the rational decision for ambitious grad students
Yes! No amplification needed.
Anyone else failing to semantically parse that sentence?
I would say that a number humans can reasonably count to is about ~15,000, maybe 25k, assuming you're limited to about 15 hours of counting. Any number over about 100k is simply a number humans are incapable of counting up to from one.
"You could count the number of skilled electronics engineers on US soil, and [whatever that number may be] there's probably a million MORE in Shenzhen alone."
Design costs are probably an order of magnitude higher in USA than in China, and can't be spread over hundreds of thousands of units. I'd bet the profit isn't that great.
I get that you can assemble a phone PCB with SMT parts yourself, that’s not that crazy
But is there actually an American made SoC that can be used for a phone?
On purism the actual mobile phone part is on a separate modem board. The Modem is Made in China, using Qualcomm chip made in Taiwan. I presume QC could make some of their SOCs in TSMC American plants if someone makes a big enough order.
How many iterations can they get done in US in 18 months? That's what's going to kill Made in USA, if you can't get the design done on time, not a few $100 extra in PRC vs west sourced BOM, but millions more spent on development over longer time frame because lack of talent. Is the short/medium term solution still to send "homework" to Chinese prototype teams? I suppose economics of PRC speed and few prototypes > 100%+ tariffs.
There has to be strong organic production and only then can gov help tip the scales upward, instead of generating it from thin air at the top level. If no one is fleeing China to do it in the US the same way people fled American market conditions to build stuff in Asia it won't happen.
Creating a forced siloed market through tariffs is probably the least efficient and most expensive method to achieving it. But it can plausibly if the domestic market gets used to not buying the nice things the rest of the world has for a decade (similar to what western gov is choosing to do with banning Chinese EVs but applied a thousandfold).
Exactly, even the Fairphone is assembled in China.
Last time I worked on something of this complexity in 2019, 1 week turn around prototypes would cost $2-5k for the assembled PCBs from China but $30-50k in the US. It also took a bit more effort and inventory to make sure all the parts were stocked or shipped on time, which is a problem when you can’t visit Shenzhen’s malls if you’re missing a part. Once the first iteration was done, we were averaging between one and two months per revision. It’s very doable but nobody except medical, defense, and aerospace are willing to pay the price.
That phone had everything necessary for communication, navigation, and even some basic photography and entertainment.
Imagine a whole industry of distraction free dumb phones being built, by economic necessity right here in America, that then result in lower rates of addiction and better mental health.
But that is beside the point since it's not "EE" that's being done in China. It's manufacturing and assembly of US designs. And that is where there's real shortage - skilled labor that can do that. The actual work is mostly done by robots, but before it _is_ done by robots, manufacturing capacity needs to be designed and built. Under the best circumstances (e.g. unlimited Apple resources in India) this takes years.
Rather: cheap (US) labor that can do that. :-)
Be all of that as it may, we still _have_ to revitalize the "real" segment of our industry, no matter the cost.
That's also partly because (physical world) engineers don't invest the same intense effort to enable quick iteration cycles for their area as software engineers do. I cannot say whether this is a "culture problem" of engineering disciplines, or managers don't see a huge economic value that this would enable, and thus don't allow engineers to work on such topics.
I at least somewhat know what I am talking about, since when I had to get used to some CAD program, I really felt set back by decades in comparison what are standard practices in software development. A little bit like the difference between programming in a modern programming language and programming in Excel.
Thus, in some sense I am impressed by (e.g. mechanical) engineers who despite all this actually are capable to accomplish creating a product (and I do believe that if the practices improved, they could do so much more).
There's also another problem when it comes to chips. On the higher end, you have to design for the technological processes that don't yet exist. E.g. 2nm did not exist 3 years ago, yet the design of the chips that use it was done back then. You're also doing it with bleeding edge tooling.
I guess that if Ford moved their HQ in DRC, it would be called a Congolese company with American factories, too?
Then again our POTUS is a self proclaimed genius
So the phone that costs them $550 is sold for about $800, while the phone that costs them $650 is sold for $2000. I wonder why is such a big difference in the margins.
> It's the fact that it's a secure supply chain, that you know, staff that's completely auditing every component, which means we're selling to a government security market with all those additional layers that we've added on top.
So a mix of marketing and supply chain security. Businesses charge the price people will tolerate paying.
On the other hand, China can think the same. Why rely on Qualcomm, Intel, Nvidia? Or why rely on any US based tech, including software and services?
Now, I will not buy american products at any price. It feels totally ridiculous now to even talk about moving the supply chain to the US.
Why? What justified double the price a year ago? Especially since you sound like you're not an USer...
Ok maybe avoiding China would have been a good idea 1 year ago too. But from that to overpaying for something just because it's made in the most expensive country in the world...
This is what got me. I remember 40-50 years ago everything (or most) "made in the USA". And how "Chinese product" was an insult while "American product" was a badge of honour. Oh how the turnstable..
When I was studying in the UK the _most_ diligent students were the Chinese ones. First to come, last to leave, spent hours and hours on workshops, but they were not interested in staying in the UK to live/work there. As if they were on a mission. Go-Learn-Return-SpreadKnowledge. Many other nationalities were tempted by the mighty-GBP and stayed. But not the Chinese. Vast majority of them learned as much as they could and then went back home. That was mid-90s.
And those 20yo students of the mid-90s are 50yo with great studies and 30 years of experience, and there were thousands of them studying all over the UK, USA, and other countries. So there you have it..
I keep thinking of "Principles for Dealing with the Changing World Order by Ray Dalio" [0]. The game is almost over, time for the next cycle..
Taking just those figures in mind, they shouldn't be at all worried about tariffs - anything more than an 18% tariff, it's cheaper for them to build in the US than China for US customers. Honestly, that's much lower than I expected, especially considering they're even more restrictive in their component sourcing than most companies would need to be because they're catering to a security-focused group.
I guess the real issue is that they don't have any more production capacity in the US, rather than it just being a cost issue.
From https://www.investopedia.com/terms/c/cogs.asp
> Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good. It excludes indirect expenses, such as distribution costs and sales force costs.
So the $550 or $650 COGS includes the cost of labor for manufacturing, but excludes (say) marketing and auditing costs.
This is a guess, but the argument is probably that it took way more R&D effort for them to figure out how to produce it efficiently in the US, and they've chosen to increase the cost of the US phone variant to offset this particular R&D expenditure that the Chinese variant didn't have.
> So it's about $650 to produce that entire phone. But what we're doing by selling it for greater originally, we're looking at a lot of differentiators for us. It wasn't just made in the USA. It's the fact that it's a secure supply chain, that you know, staff that's completely auditing every component, which means we're selling to a government security market with all those additional layers that we've added on top.
So I guess the answer is that they're selling to the "government security market" so they can charge whatever the hell they want.
> You can look at our concrete numbers. We sell a Chinese made Librem 5 phone for $799. We sell the Liberty phone for $2,000. When you're looking at just those numbers alone, that looks like a giant leap in cost. But there's a couple of factors that are not publicly known when you're looking at just those prices. When you're looking at COGS, cost of goods sold, our Librem 5 phone is equivalent in cost to about an iPhone. It's about $500 and some odd dollars, $550. So we can see that the Librem 5 phone doesn't have a very high margin when we sell it. The Liberty phone, same COGS componentry wise, but to produce it on US soil, we're adding not quite a hundred dollars. So it's about $650 to produce that entire phone. But what we're doing by selling it for greater originally, we're looking at a lot of differentiators for us. It wasn't just made in the USA. It's the fact that it's a secure supply chain, that you know, staff that's completely auditing every component, which means we're selling to a government security market with all those additional layers that we've added on top.
Also, there is nothing in the article that talks about the quality of the phone. Being manufactured in the US does not automatically make it a high quality product. I'd take an iPhone manufactured anywhere in the world than this Liberty phone.
In a world in which you do, you pay more for the machines, the materials, the components you can't make in the US (a phone is thousands of component, phone makers don't make most of them), etc.
It's probably $650 to design it, build half the parts, ordering most other parts and assemble them.
Now what's interesting with the tariffs is that it's not just it will make the parts you can order more expensive, it will make the supply of such parts available to you restricted since you are now competing with buyers that don't have tariffs and can outbid you easily.
Or course, all this include rare earth supply which China already restricted for US export, so even the part you can make are going to be super expensive. The premium is going to be way more than the tariff ones.
Finally, since you are not going to be able to sell to the Chinese market of 1.5M of people, you will sell fewer phones, meaning your volume effect will be lower.
Meanwhile, competitors from Asia and Europe will be able to sell to the rest of the world, unrestricted by such problems, so much more price competitive and with a more robust cash flow. So you will lose markets in other areas too, hitting your volume effect even more, possibly sending you spiraling.
So, it's definitely pop corn time.
I assume that the answer is much simpler than the "evil capitalist" narrative: the respective company is much smaller, and produces on a much smaller scale.
Thus it is an economic necessity that some part of the money is better used to build up reserves to be able to survive worse times.
Additionally, the smaller scale means that the development costs are a much larger cost proportion than for a company that produces on a huge scale.
The fact that they sell both the made in china model and the USA model shows it is not about building up reserves, as if they wanted to do that they would have higher prices on both models, not selective pricing, thus we are looking for a factor which affects their USA model but not China model.
Development costs are not really a factor here, they specifically say they developed both versions simulatenously, but yes if they didn/t it would be a factor.
They actually back up my first point by giving the reason for the pricing: "It's the fact that it's a secure supply chain, that you know, staff that's completely auditing every component, which means we're selling to a government security market with all those additional layers that we've added on top."
If you distill this down it is saying that basically securing the supply chain costs more, but also that it adds value. The government is willing to pay a whole lot more for the same product for that extra supply chain security even if it doesn't cost that much more for the manufacturer to produce because no one else can offer something like this.
Creating domestic jobs this way doesn't have a great track record however. They are usually quite expensive. And they don't help the geopolitical uncertainty at all, which is at least hinted at being something of an end goal.
Sure, you can ship parts all over the phone and have assembly in the final country. But what does that solve? What people usually think of when discussing where products are "produced", the components or at least a majority thereof, is the same.
Where do you source OLED screens in necessary quantity to produce a popular mobile phone model in the US, or any other Western country? Or the batteries? It's not a question of cost. It a question of non-existence.
Changing global production is a not a singular problem but something that would require laser focus during several decades and many different areas just to be something that could be taken seriously.
Especially when you gut the DoE and make zero effort to invest in either higher education or trades training.
If US wants a manufacturing revolution it needs to start with an education revolution.
A better way (IMO) to do it would have been tax incentives to build US plants to move manufacturing back in the US, have research university programs as feeders for tech innovation centers, and funding for technical colleges to expand their programs for skilled labor needed instead of gutting multiple agencies that would have overseen/guided this expansion. And oversight, of course. And attainable goals set in contracts to receive funding, not just, "here's a pile of money we'll forget about in 4 years."
In China they have the manufacturer down the street from the distributor who is down the street from your factory.
With Digikey we are paying $80 to overnight a $5 part from Minnesota. We need to be able to go send a guy to pick it up in an hour.
In China, you can just go down the street to the factory.
As for shipping overnight, it's incredibly common in R&D and repair.
The concept of having centralized full-chain production for enormous productivity boosts is not some wild concept, it's ancient and well known. Industries have clusters because it benefits everyone in the cluster. The US has very few and weak manufacturing clusters.
The article does, in fact. Their US made phone is manufactured, not just assembled, in the United States, and also attempts to source nearly all parts and materials from US suppliers as well.
They don't manufacture their important components. Not even Apple does that. No one does. There is roughly zero chance that any of the non-interchangable bits, the SoC, the battery or the screen, is manufactured in the US.
And there is nothing wrong with that. It's just silly to pretend otherwise.
If you're just thinking of price, the farther down the supply chain you go the less impact of tariffs.
If you're sincerely interested in the answer to that question, I'd highly recommend reading the article, because a good portion is dedicated specifically to answering that.
There is zero chance that a smartphone will ever be made out of 100% US-manufactured parts, or even close to it. And the evidence is right in this article, if this is the best effort to manufacture a "US phone."
Economists selling people on free trade like to omit this, but production capacity, efficiency, cost, and technical know-how, aren't static, but improve based on demand.
In other words, people won’t just buy multiple iPhones just because it’s made locally.
It's good they are being transparent. This is the future. Does "produce" include staff salaries involved in manufacture? Does it include salaries for staff in R&D?
I think it's essentially if you had all the designs for a product and asked someone else to manufacture it for you, everything they would spend and charge you for producing the product and delivering it to your ship (or whatever), at which point you take over all the rest of the costs including the shipping.
As I mentioned elsewhere in this thread already, while the Librem 5 is becoming dated, there's still no upgrade path on the market. You need to switch to a completely different category of devices in order to get something more performant than that. I hope that'll change soon, regardless of whether it will be Purism coming up with L5v2 or someone else with their own thing.
It's fairly obvious that trade barriers are good and necessary for a country, not sure why we've allowed this to go on for so long. It's truly fascinating.
And both cases have investment in the OS/schematics which are open.
By the time the US learns what "efficiency" means, China will be building on Mars
"Just" is doing a lot of work here, https://news.ycombinator.com/item?id=43638323
We already know that US companies can design phones, like Apple.
OK so the next step is to figure out where to source the components -- and under the context of OP's article, that means which components can be sourced directly from the US, or from the EU (i.e. manufactured inside EU, not branded in EU but sourced elsewhere).
Once we can figure out which components are economically feasible to be manufactured in the US and EU with the tariff, we might be able to go from there and slowly expand the operation to the rest of the chain.
I love this approach, as it’s not purely commercial, it’s focused on knowledge, and it’s not “stealing” tech, they probably have that on their contracts and the like.
Also, it’s EXACTLY what China set out to do a few decades ago, and foreign industrialists and capitalists were so eager to spend less, they flocked over there, and the Chinese now have the knowledge as well as the labor force do to what they do.
Some people love to cry about how China is “stealing” American tech, when in reality no one ever pointed a gun at a tech CEO’s head and said “you must move manufacturing to China.” They did it because it was profitable, and they knew the terms.
I’m not saying industrial espionage doesn’t happen in China, it does, as it does anywhere else. I just don’t like the rhetoric of saying they’re “bad” for doing a perfectly legal business tactic.
I wish it was good, but the product broke in less than two years. Worse yet, when it broke Purism couldn't help at all because they stopped making the 15s.
That will be a hard pass for me...
The first issue I had was the battery not being replaceable since they stopped making the 15's battery and couldn't offer any OEM/part info for a replacement.
The second issue was more serious, the motherboard simply died and couldn't boot.
At least I was able to recover the drive/ram which went into my new system76 laptop (that was 2.5 years ago).
There are other lucky people on their forum: https://forums.puri.sm/t/librem-15v4-and-non-free-purism-rep... and https://forums.puri.sm/t/librem-15v4-and-non-free-purism-rep.... There are unlucky ones too, but less it seems: https://forums.puri.sm/t/librem-15-v4-laptop-not-turning-on-...
In my imaginary world, I wish someone stood up to this type of insanity. This would be a good time to force Apple / Google to revive old devices and allow the supply chains to adjust manufacturing things outside of China while the rest of the world pauses and lives with some outdated hardware technology. I know this is probably not feasible because Apple and Google probably survive on selling of new phones, but hey I can at least dream!
I agree though that for many things (such as their laptop), specs often don't matter. Either I need a high-end, GPU accelerated computer, or I need a terminal. Having the newest CPU doesn't matter if it achieves other desired goals.
This is definitely not true, the issue is in the non-optimized software. I tried SXMo [0] on a Pinephone (which is much slower than the Librem), and it was unbelievably fast, including watching videos and looking a maps in a split-screen mode, simultaneously and smoothly. Android had 10 years and a huge team of developers to optimize the UI.
Auto screen orientation only works 50% of the time, because the whole thing is based on a pile of shell scripts.
There is no lock screen included.
No, I'm not kidding.
[1] https://sxmo.org/docs/gettingstarted/
[2] https://man.sr.ht/~anjan/sxmo-docs/USERGUIDE.md#strongglobal...
Hmm. So why can they have a 3x markup?
What is the moat? Who will overpay by $1,000?
1. People who are required to use a product with very specific certifications.
2. People who want to use a product with a desirable backstory.
In the first instance the US military requires testing and certifications that are costly to achieve, creating a moat for military suppliers.
In the second instance, some podcast listeners are willing to significantly overpay for generic supplements due to the backstory and their trust in that podcaster.
I am curious what the market breakdown is for this device - how many do they sell for case 1? how many do they sell for case 2?
Also, if they don't sell very many, then their manufacturing capital costs, design and supply chain overheads per phone will be very high.
More lies from Mr. Weaver... I'm sorry but an imx5 SoC is not a raw material.
Flex likewise can do the same.
There will be some ramp up time but these companies operate as scale.
If china were taken out of the picture (e.g. JLCPCB) ideally a competitor would attempt to take what was that market. Or not? Maybe the margins are low and this is why it hasn't happened here already.
markus_zhang•1w ago
He did include one paragraph on the website:
"Individual components used in fabrication are sourced direct from chip makers and parts distributors."
nickff•1w ago
Todd Weaver is vastly exaggerating how special, innovative, and skilled Librem is. Their components are largely sourced from overseas, through domestic distributors, which is the norm for electronics manufacturers; overseas distributors are often precluded from international sales by agreements with their suppliers. There are also far more skilled electronics designers in the USA than he seems to think.
Source: I am an embedded developer, who works on a research, design, and development team which includes electronics engineers, and works on products manufactured in the same facility.
Aurornis•1w ago
Second this. The Liberty Phone PCBA isn't even that exotic as far as modern designs go. The NXP SoC (CPU) it uses is a common part with a rather pedestrian ball pitch. A board like this is within the reach of countless trained EEs here, but they're usually happily employed at companies with higher volumes and margins. This often translates to a perception that they don't exist in the US market when low-budget companies go looking.
8n4vidtmkvmk•1w ago
Suppafly•1w ago
I suspect most of those are from overseas. A lot of that stuff just isn't made in the US. I don't know why they are shady about it, they should just be honest and denote which stuff isn't available at all in the US and which stuff isn't available at reasonable costs in the US.
fecal_henge•1w ago