So, people will just buy more american watches in your example, no?
You have to look at the elasticity of demand across every component to determine the correct ratio.
What i can tell you, as a GSM, from a CapEx perspective, sensors, motors, cables, and batterys made in the US just got significantly more competitive. It was already trending that way due to JIT demands and rapid factory buildouts, but the tarrifs were a huge marketing boon for american supply chains.
And i can tell you for the first time as someone in the supply chain business i can confidently ask the question "Should we be buying this bolt from Insert country here?".
It's almost like i've been given the authority to source products from the United States even if we are paying some percent higher.
As it is, American spending is way down and hurts everyone. A small stock crash (the thing propping the US up as of now) would truly hit with a 2nd depression at this point.
Combine this knowledge with some maneuvers as of late that reflect the Dotcom bubble and we're rife for a crash that will take the world economy with it once the bubble pops. Its a bull asset market right now, but its certainly not a healthy one
And that's just the economic side of it.When you consider the history of such extreme wealth inequality, ignoring rising unemployment and disresr among the working class can get ugly quickly. That can also go down an expensive route if taken to the extreme.
These companies are absolutely money printing machines at the scale we have never seen.
Some of the individual standout figures:
Apple’s trailing 12-month net income is around US$99 billion. Microsoft’s trailing 12-month net income is about US$101 billion. Alphabet (Google) is estimated around US$111 billion net income.
On revenue, one list shows: Amazon ~$670 billion, Apple ~$408 billion, Alphabet ~$371 billion, Microsoft ~$281.7 billion.
Have you ever read the soverign individual? He kinda predicted this. Tech companies will rise into unfathomably rich while the countries inability to tax foreign revenues will lead to the collapse of the nationstate.
For one example, the domestic PCB manufacturing industry is a joke. Even with tariffs, China is literally ten times cheaper than domestic. I recently sent an order to both, and the China fab had my boards in production inside a week. The US fab took three weeks to give us a quote, which was five times higher than China for half the quantity, in twice the time.
The US is not independent. We don't have a domestic industry competing on the global market. We make very little and rely very heavily on imports. What we do make is heinously expensive and not any higher quality than the much cheaper imported goods.
The current trade war also doesn't spur domestic industry growth because all the materials and equipment to build out industry.... is tariffed. Plus the tariffs change too frequently for any sane person to make any kind of long term investment.
Industry will wait to scale until economic forces stabilize.
