is that it is a global marketplace. Let's say Vietnam has the ability to produce 100 million garments. They have to sell them somewhere. Let's say Vietnam's cost is $5 per garment. And by the time you have transportation warehousing, and distribution costs, let's say the retailer pays $8. If the retailer can sell for a net price of $12, they should break even.
OK, add tariffs for anything going to the US. That will add $2 to the cost as seen by he retailer, so they will need to sell it for $14. Maybe that works, maybe it doesn't. But being a global market, Vietnam can sell to France, Brazil , New Zealand or wherever. As long as they net $7 per garment, they don't care where it goes.
Of course, the US has the potential to buy a lot of it, so the Vietnam plant might not be able to run at full capacity if US has some tariffs, but that's not the end of the world for them. There is no real leverage here.
Meanwhile, back in the US, we have inflation because there is nobody making those garments inside the US. And here's the killer, and the reason that the Trump plan is such a loser: if there were anybody producing locally, they would RAISE THEIR PRICE to match the price of the Vietnam product after tariffs.
That may not play out in garments because that is almost entirely offshore now. But look at cars and other industries where there is some local production, The tariffs will not stimulate much investment in the near term. Nobody will invest anything because Trump is so TACO. We have already seen car companies put big investments on hold because they never know when Trump is going to run extortion their way. So they will simply increase their prices as high as possible, given a new ceiling because of the tariffs.
In other words, without a consistent long-term strategy (and Trump's long term is 45 minutes). the only real impact of the tariffs will be inflation in the US. Nothing else.
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