35 percent Trump

So Trump has suggested that unless someone produce a widget for a cost saving of more than 35 percent outside the US, it must be produced in the US for consumption in the US. Well for the next four years. So that will drive up the consumer cost by less than 35 percent. but it will be felt.

Trump is familiar with business among the rich, those that come to him. This is not the same as for the middle class, where cost is always an issue. Philosophy is fine until the costs are considered, then philosophy becomes a secondary consideration among the rational. Oh well, in the end we all just die anyway.  

So if you are a capitalist, and you have two choices, one plant in the US to serve 400 million people, or one plant in the world to serve 7,000 million, which are you going to choose and those other 400 million can have the product at 1.35 times the cost, which are you going to choose? The other choice is two plants, one to serve 70 and the other 4 hundred million, which are you going to choose? Well 350 billion have no money, so the US is 10% of the world market for some widgets, and 5% for other widgets. The US loses.

Now what about copyright and patent laws, existing agreements, and civil traditions? But this could be for eight or four years, or less. So what is the more economical to the business? 35% may be worth smuggling, at least by US citizens into the US. He will need a wall for sure, but it will have holes. At best it may be four years before it would be complete, and then what? Or will it just develop more holes? The US loses.

To China, in total trade, the US is 10%. So wtf. How upsetting will Trump be to the US? Packaged in Canada may be the common label for a few years. The US loses.