HN Reader

It will always be like this until scale ramps up and costs come down as infrastructure ramps up. China's advantage is always communicated as cheap labor but it's also the ability to almost infinitely scale production lines in a short period of time. America has mostly lost the muscle memory and tooling to do this. And that ability to scale matters with materials costs.

There are incentives that would benefit domestic producers and companies but those take time and don't make good soundbites for politicians.

The blunt tariff sledgehammer that was dropped isn't going to do it. Small experiments like the one in the article will try and mostly fail. Meanwhile producers will find loopholes and workarounds to tariffs. And the margins and viability of domestic designers and businesses will continue to weaken.

Consumers will increasingly eat the cost and lose the convenience.

My family runs a small plastic (injection molding) business in the USA. Second, soon to be third generation.

The only reason it still exists is because the products made are too expensive to ship from a country with cheaper labor as they are pretty large and heavy. And it's quite a niche product/vertical.

The biggest problem that the business faces on a day-to-day basis is employees. It's a very low skill manufacturing job. You pull parts out of the mold. The pay is good for a large midwestern MCOL city, plus full health benefits (employees don't pay a cent). It is downright impossible to find and retain reliable employees. The job sucks. I worked there when I was younger helping out and you do the same thing every minute for 8 hours a day in a hot and loud factory. It's not a career - just a job. I'm not sure how you fix that. The American appetite for a low skill manufacturing job is dead - I'm not sure it's a bad thing either.

Even the high skill stuff has already been taken over by China, their process is far more efficient. When the business needs design/tool & die for a new plastic injection mold costs and speed associated with getting that mold designed and made in America are astronomical compared to the Chinese. The Chinese will get back to you with a design proof in 24 hours at a 1/4 of the cost.

So, if retailers are resisting raising prices, who will pay the increased costs? Domestically sourced goods can be no more than 55% more expensive (otherwise the imported goods would be cheaper), but we can be sure that locally sourced goods will be priced as close to the full 55% as possible (and as the article points out, some locally manufactured items are probably never going to be less than the overseas cost, even including the tariff tax.)

Now take a look at Walmart's margins https://www.macrotrends.net/stocks/charts/WMT/walmart/profit.... Their gross margin is ~25%, with a net around 2%. Even if Walmart decides to eat the tariff cost out of patriotic duty, anywhere near a ~50% hit to supply chain costs would put them out of business. Heck, even a few percent would require a huge business restructuring, if it were even possible.

So prices are going to be higher - it's a given. In the short-medium term, the tariff tax is simply a large regressive transfer of tax obligation onto consumers.

SmarterEveryday is trying this right now too.

He details all the challenges, and it's a pretty good watch.

The grill brush they made is a bit on the expensive side, but I bought one.

https://youtu.be/3ZTGwcHQfLY?si=TP1ez9tIEkpEu1Xf

There is a mattress company called Tuft and Needle. They started right at the early beginning of the mattress-in-a-box trend, but offered a unique product. For the first six months of operation, they made a Japanese-inspired cotton mattress filled with wool batting and was made in the USA. Before I had a chance to order one though, they had already pivoted away from that unique product (that doesn’t exist even today) and were dropshipping the same generic PU foam mattresses made in China as everyone else, with very little change to their website even. I was sad

Textile manufacturing is the absolute bottom of the barrel. The town I grew up in (Manchester, NH) had the largest textile plant at the beginning of WWI but it was out of business by 1933. The industry moved first to the American South and by the time they'd paid the loans of the factories it moved again overseas.

There are countries besides USA and China. It was just terrible geopolitics decision for US to depend on 1 country for imports instead of keeping the power balance between countries of the world.

I get that this is an example, but I'd like to see other examples. An expensive niche dog bed, niche beverage, etc doesn't seem very representative of the economy. If it is, that's concerning.

It's so frustrating that policies to subsidized growth in a targeted way (paid for by our progressive tax system) are ignored and we're stuck with these wide impact regressive policies. As described they're poor policy, and as implemented they're simply a tool for shake downs.

I’m guessing most people these days don’t remember when everything moved to China to begin with. People blamed it on globalization but the trend existed long before that because Americans didn’t produce a quality product. “Made in the USA” became synonymous with poor quality and high prices after the corporate mavens of the 1980’s hollowed out manufacturing for quality along with the factory workers pension plans. It’s not like America didn’t do it to itself - globalization just allowed specialization to set in and efficiency to dominate. Chinese manufacturing struck a middle ground between very high quality in Germany and Japan and very low quality in America then scaled it up and out to ensure a total vertical integration. For segments of the supply chain that were inefficient the state assumed the losses to ensure an ever increasing capture of the end to end ability to produce in an entirely integrated regional manufacturing center. I think instead of getting our panties in a wad and wishing for the 1950’s to return - which weren’t that great to begin with despite our rose colored glasses - we need to lean into our strengths and specialized role. The question though of what are people to do who are “displaced” by globalization, automation, and now AI has never been answered and leaves us where we are today. I don’t have the answer either. But it’s become more destabilizing than I imagined as I saw things unfolding.

It’s not just too expensive. We need to seriously ask ourselves do we want too, at all, even?

My dad worked in a steel mill all his life so that me and my siblings didn’t have to. We’re he and the other guys at the plant proud of their work? Absolutely. Does nearly everyone wish their kids would do something else? Absolutely.

Industrialism has ipso facto become the soup du jour for thr agrarian myth. The reality is that it’s long, hard, relentless, menial labor. It’s also terrible for just living in general. My dad basically turned the lights off on a steel plant. That was 20 years ago and the land it was on will be unusable for even landfills for another 100 years. It was on a river and the river still smells like chemicals, and fish routinely die when passing through that area due to chemical runoff from the land.

So, I’m sorry, why do we want that here (let alone anywhere)?

I’m not saying that I don’t complain about my work from home job or that there aren’t negative effects but good luck weighing me getting carpal tunnel or taking anxiety meds to the stuff that industrial labor does to your body and our living environments.

I’m glad our country doesn’t make plastic dog beds for adults.

It's interesting to me that there was already a manufacturing facility in the US that could readily make something as random as a memory foam dog bed on short notice, even if somewhat more expensively.

I had though all such simple things had been completely outsourced to China or Vietnam or somewhere. That does imply if that if manufacturing economies of scale can be returned to the US, the price could become competitive, even for low value-added products like this.

>$100 overall cost to make the beds in China

>faux fur lining for the cover, which would still need to be imported from China—adding another $100 per unit.

How is the cost of a part the same as the whole product?

Right now, as for the last century, the USA manufactures identity and all the products that make you feel like YOU. It used to be Levis and Coca-Cola, now it is all the premier tech Hacker News places value FAANG+ (minus TikTok). If the USA continues inventing identity, those identities should be grounded in merchandise only made in the USA.

People point to China's 'cheap labor' but this downplays why this is only possible under its political system and the tremendous human cost involved.

Rather the framing shouldn't be whether its too expensive or cheap but why so many people are willing to arbitrage industrial scale abuse of human labor only possible under an authoritarian regime and then virtue signal about anything else.

Even more puzzling to me is why nobody is making the connection between the dilution of US dollar value via exporting inflation that props up totalitarian regimes and its growing reliance on it to make things its people want to feel they are above others.

They tried Made in the US but customers found it too morally expensive to care as to why making it outside the US is cheaper especially in China.

So, what I get from the article is that all US business is initiated by Shark Tank? LOL

None of the three businesses reported actually even build one prototype in the US and the arithmetic doesn't work out for the last example but a lawsuit has been filed.

Duh.

All the economic dimwits (both on the left and right) who constantly harp that real wages have been falling, don't take into account the steep fall in prices of consumer goods due to offshoring.

Ofc. this does mean that US becomes the world's "bitch" eventually following the economics of things, but the alternative is essentially becoming Soviet Union or Argentina.

I think, the issue is about producing the same stuff people already buy overseas.

Can you make a shirt for 10 cents in the USA? Probably, if you get innovative on automation and remove most human labour you might get there in a few years or a decade, but not tomorrow.

If you can get creative with new solutions those products solve, you might get a foot into the door.

What does the shirt solve for a customer? Could there be a (better) alternative that could be built in the USA?

But yeah, you won't compete on price...

For any given thing produced abroad USA could produce it domestically. But you simply cannot produce ALL the things domestically.

Population matters. There's not enough Americans, not even going into how many want to work a blue-collar job and how much you'd have to pay them.

I don't really seen any benefit from buying American. The entire point of being capitalist is to let the market solve these issues, and the market has. I don't have any more loyalty to Americans than to any other people on earth, and I think that impulse is rather odd.

"They tried Made in the USA - it was too expensive for their customers"

Did they (the companies profiled in the article) actually try it

Or did they investigate the possibility of trying it

Did customers have an oportunity to determine it was too expensive

Or did these businesses make that determination themselves

NB. I am not suggesting their determination was incorrect. I am only highlighting how the title refers to something that did not actually happen. A more accurate title might be something like

They considered Made in the USA - they determined it would be too expensive for their customers

Trying to make all your products domestically may be the wrong approach for many. Instead make specific lines domestically.

There are lots of companies who standard ranges are made in China, but they also have a Made in America/other for their premium range.

That way customers who are less price sensitive can choose to pay more. And those who can't still buy regardless.

One has to wonder how the United States survived before the rise of Asian manufacturing... As recently as the 1980s we had full computers made in the US.

We can get it back, at least the more interesting parts of it. If this movement was being sponsored by another political party, as it used to be the case, we would see a complete inversion of the journalists defending and criticizing it.

Decades of private equity/vulture capital shipping overseas has allowed for other countries to overtake the USA.

It all boils down to awful pseudoscience pushed by Reaganomics/trickle down economic theory. This pseudoscience has been used to write policy in this country which has only benefited the ultra wealthy.

I’ve often wondered about PPP and why China is cheaper. Deepseek provided interesting answers, and it’s nothing to do with pollution or cheap labour. Turns out socialist policies, investing in free markets, cheap education, open competition, public infrastructure result in competitive manufacturing.

Right now, there's nearly a 100% chance any "Made in USA" brand is a grift, by direct members of the grifting party. I'm for the idea, done correctly. I'm completely against it in it's current form. They're taking your money rubes. If you want the real thing, you're going to have to help fix the country instead of falling for basic scams, in all areas of life.

You only get to pick one: labor laws or a manufacturing industry.

This headline is a lie. It's not a matter of being "too expensive for customers", it's a matter of undesirable profit margin for the company.

In my opinion, the following are additional factors that are often overlooked when discussing the competitiveness of USA manufacturing:

    1) OSHA - if you have more than 10 employees, you're subject to OSHA regulations. Do other countries have comparable regulations for keeping their workers safe and healthy?
    2) Decline of shop classes - shop/industrial classes used to be widespread in high schools. Not as much these days. Why?
    3) Litigious society - our society is quick to sue and the legal standard used in civil trials is "more likely than not".
    4) Drug addictions - look at any job posting for manufacturing, labor, construction, etc. and you'll see mention about drug screening.
    5) Fat, dumb, and happy society - we care more about Super Bowl Sunday, Hollywood, reality shows, etc. On average, we're lazy and care more about being entertained.

As recently as the 1980s, 70% of domestic clothing was made in the U.S., including by brands like Gap and JC Penny. Did Americans have an impoverished standard of living in the 1980s? Is the cheap, disposable, foreign made “fast fashion” we have today better?

https://www.kqed.org/lowdown/7939/madeinamerica

I don't think the American small business owners are interested in making bullshit. What you need to do is fully destroy the middle class until you've got an air gapped lower class bent to your will building human doggy beds.

It took decades to gut American consumer manufacturing. Anyone who thinks it can be brought back without pain is deluded. But nevertheless, it’s worth that pain.

As the Chinese are well aware, every time in history a great financial power and a great industrial power have come into conflict, the industrial power wins.