25% Tariffs on All Imports - Effect on Rivian prices?

[RWerksman]

Or it reduces the concentration of wealth from elite billionaires because the money is better distributed throughout our economy. Prices are relative as well, so we might get it cheaper from China as they don't pay their people anywhere close to what we do, but if the money stays in our economy we will be better off.

We should have never taken advantage of cheap labor to the detriment of our workers in the first place. Lastly, automation will reduce the need for human workers and potentially create a post-scarcity world. Just like how ending slavery ushered in the industrial revolution.

I'm not a political expert, and I don't know for sure that tariffs are the answer, but continuing on the path we are on while growing our trade deficit year after year isn't working.

It's also possible that companies just continue to import whatever is being made overseas. It may be still cheaper to import, or they may view the policy to be temporary or malleable. Despite the intentions, this may turn up being no more than a short term tax, or just an excuse to raise prices like what happened during Covid.

I hope that's not the case.

I can say that I'll likely end up raising prices as there isn't an on-shore source for some of the electronics bundled in with my products. I'm assuming that Rivian will do the same.

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[SANZC02]

How about we make them here and employee Americans vs workers in Vietnam. Ask the workers in Vietnam if they felt bad for the Americans they took their jobs from. FWIW... Nike CEO made $32.8 Million last year.

People need to think of the inflation that will be introduced based on labor cost moving a lot of the manufacturing into the US.

Just look at the apparel industry in Vietnam, the average wage there for those workers is 32,000 VND an hour, that is $1.32 an hour. Honestly even 100% tariff on some items is still virtually a bargain compared to trying to mfg. here.

Lots of things that are fairly cheap today will become much more expensive reducing the purchasing power of people. I just do not see how this helps the majority of the US population already struggling with their budgets. It is not like we had no jobs, unemployment was at record lows and we already had industries that were struggling to get people to take those jobs.

 

[doit82]

People need to think of the inflation that will be introduced based on labor cost moving a lot of the manufacturing into the US.

Just look at the apparel industry in Vietnam, the average wage there for those workers is 32,000 VND an hour, that is $1.32 an hour. Honestly even 100% tariff on some items is still virtually a bargain compared to trying to mfg. here.

Lots of things that are fairly cheap today will become much more expensive reducing the purchasing power of people. I just do not see how this helps the majority of the US population already struggling with their budgets. It is not like we had no jobs, unemployment was at record lows and we already had industries that were struggling to get people to take those jobs.

Exactly. Easy to say on the rivian forum you are willing to pay more for things to be made in America but the reality is the majority can’t afford that luxury. And trying to solve that with tax cuts will just leave us further indebted to China (which I thought the party in power used to care about).

 

[DuoRivians]

At the risk of being political (admin: please remove if necessary), I encourage everyone here to write to their Congress people to support the bills floating around now that’ll bring back tariff authority back to Congress. Passing such bill with a supermajority can eliminate these ridiculous tariffs.

Here’s a bipartisan bill introduced in the senate:
https://bsky.app/profile/sahilkapur.bsky.social/post/3llw5dpqlyk2m

 

[ndmiller]

It's also possible that companies just continue to import whatever is being made overseas. It may be still cheaper to import, or they may view the policy to be temporary or malleable.

100% right, they will just bring in less as less will be sold at the higher prices.

 

[Donald Stanfield]

People need to think of the inflation that will be introduced based on labor cost moving a lot of the manufacturing into the US.

Just look at the apparel industry in Vietnam, the average wage there for those workers is 32,000 VND an hour, that is $1.32 an hour. Honestly even 100% tariff on some items is still virtually a bargain compared to trying to mfg. here.

Lots of things that are fairly cheap today will become much more expensive reducing the purchasing power of people. I just do not see how this helps the majority of the US population already struggling with their budgets. It is not like we had no jobs, unemployment was at record lows and we already had industries that were struggling to get people to take those jobs.

You're also forgetting about the additional logistics costs. It's not a simple wage/wage comparison.

 

[SANZC02]

You're also forgetting about the additional logistics costs. It's not a simple wage/wage comparison.

Not as simple but the labor is a huge portion of the cost.

As for shipping, those cost were pretty high during Covid reaching $20k for a 40 foot container but they have come down significantly. Right now a 40 foot container from Vietnam to the US is around $4k. That is pretty cheap, you can probably get 14k shirts in a 40 foot container so that is around 28 cents a unit.

 

[Donald Stanfield]

Not as simple but the labor is a huge portion of the cost.

As for shipping, those cost were pretty high during Covid reaching $20k for a 40 foot container but they have come down significantly. Right now a 40 foot container from Vietnam to the US is around $4k. That is pretty cheap, you can probably get 14k shirts in a 40 foot container so that is around 28 cents a unit.

That's not a lot of cost per shirt, but those aren't the only logistics costs. I get your point that this probably won't make American clothes competitive, but it will make SOME things competitive, and that might be enough to reverse the tide of the trade imbalance we are facing.

 

[SANZC02]

That's not a lot of cost per shirt, but those aren't the only logistics costs. I get your point that this probably won't make American clothes competitive, but it will make SOME things competitive, and that might be enough to reverse the tide of the trade imbalance we are facing.

I’m not an economist, to be honest I’m nothing, just enjoying retirement, but what we have these days is a world economy. We need to rely on other countries to provide what they can and we need to focus on what actually brings value to our economy.

[I had typed more but deleted it, after reading it I decided it clearly went way past the no politics line. I’ll end with this, time will tell us what a day like yesterday really was historically, just hope what we are seeing is a blip and not the start of a bad slide.]

 

[andrewgrhogg]

That's not a lot of cost per shirt, but those aren't the only logistics costs. I get your point that this probably won't make American clothes competitive, but it will make SOME things competitive, and that might be enough to reverse the tide of the trade imbalance we are facing.

Name one thing that we can produce more competitively (read cheaper) that we dont already produce. I can’t think of anything. The world trade market is very efficient and all those things are already produced here.

It’s flabbergasting to me how even the left leaning tv channels are really not being truthful about how devastating these tariffs are going to be. And none have even mentioned all the reciprocal tariffs that are going to be placed on US exports by all euro countries, Korea, china, Vietnam, India, etc. I mean there are just going to be a ton of companies that go belly up. And what people aren’t talking about is that none of this lost business is going to come back any time soon - if ever!

 

[manitou202]

Exactly. Easy to say on the rivian forum you are willing to pay more for things to be made in America but the reality is the majority can’t afford that luxury. And trying to solve that with tax cuts will just leave us further indebted to China (which I thought the party in power used to care about).

Yep. A bunch of people who bought $100k electric super trucks saying they have no problem paying double for all of their basic necessities.

Go talk to the other 50% of America who are going to suffer so we can have more products that say "Made in America".

The US employs 12.7M people in manufacturing. China alone employs 120M. So we are going to add another 30M manufacturing jobs to replace the stuff we buy from China? It may even take more than that. We will never come close to making all of the products we consume.

I guess we should all give up our high paying jobs and go start making t-shirts and iPhones.

 

[Donald Stanfield]

Name one thing that we can produce more competitively (read cheaper) that we dont already produce. I can’t think of anything. The world trade market is very efficient and all those things are already produced here.

It’s flabbergasting to me how even the left leaning tv channels are really not being truthful about how devastating these tariffs are going to be. And none have even mentioned all the reciprocal tariffs that are going to be placed on US exports by all euro countries, Korea, china, Vietnam, India, etc. I mean there are just going to be a ton of companies that go belly up. And what people aren’t talking about is that none of this lost business is going to come back any time soon - if ever!

Tariffs will make the costs more competitive, that’s the point. The reciprocal tariffs are irrelevant because we already have a massive trade imbalance

 

[Donald Stanfield]

Yep. A bunch of people who bought $100k electric super trucks saying they have no problem paying double for all of their basic necessities.

Go talk to the other 50% of America who are going to suffer so we can have more products that say "Made in America".

The US employs 12.7M people in manufacturing. China alone employs 120M. So we are going to add another 30M manufacturing jobs to replace the stuff we buy from China? It may even take more than that. We will never come close to making all of the products we consume.

I guess we should all give up our high paying jobs and go start making t-shirts and iPhones.

No, what we are saying is that while we might be comfortable the middle class is eroding and all of our country’s wealth is being exported through trade imbalance and unfair dealings. So we are willing to sacrifice to create more opportunities for those who are having a harder time than us. Pretty much the opposite of what you’re saying.

 

[Zoidz]

Jobs coming back isn’t some overnight thing. Tariffs take time to work and yes, there is some pain to get there. What’s the alternative, let our ever shrinking manufacturing base whither and die until our economy collapses? Doesn’t sound good to me.

If tariffs are the supposed savior, the alternative is to implement tariffs over a period of time across diverse manufacturing sectors - not the entire economy in one day. We don’t have the construction manpower to build all these “on-shored” hundreds/thousands of new factories in two years for all the business sectors affected, let alone labor to staff them. And no, robots will not replace labor to the extent that many believe.

 

[Eric9610]

No one will build onshore until stability is reached. I work in a place where we debate this topic before the tariffs were implemented, whether or not to build a US factory. We import our core products from overseas, from our parent company but it's not China or any of the 60 countries listed.

Some people hit on the hardest part, people. Not the labor cost but the skilled people for the critical parts on some jobs don't exist here and the knowledge that does for certain positions won't leave unless for significant increases. Buying PPE is easy and is CAPEX but finding the skilled technical labor that's the hard part.

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