This is about what really happened with manufacturing and jobs and tariffs. She makes it easy to understand.
--Kim
Do you keep seeing Trump and his minions talk about how manufacturing is back, baby?
Well, I already wrote an essay last year about why the whole concept was stupid - and today I decided to follow up to see if I was right.
And well…
As it turns out - we’re gonna pay for America's new factories three times, and the jobs are mostly going to be automated.
Back in July, Toyota said it would move half its Tacoma trucks from Mexico to San Antonio. Trump jumped on it right away and said "That's what tariffs do." Toyota's own announcement never mentioned tariffs. I wanted to know what Texas actually got out of the deal, so I started digging.
Toyota's spending $3.6 billion and says it'll create about 2,000 jobs. That sounds great until you see the other side of the deal. Texas, Bexar County and San Antonio put at least $303 million on the table to land it. The city's piece is a 10-year break where Toyota pays zero property tax on the new stuff from 2031 to 2041. Local reporters ran the math, and it comes out to more than $150,000 in public money per job.
Then I found out Bexar County asked Texas AG Ken Paxton to block public records requests about the negotiations. So you're paying for the deal, and you're not allowed to see how it got made.
Toyota also used to build Tacomas in San Antonio. It moved that work to Mexico a few years ago. Now taxpayers are paying it to come back.
Then I checked the next big win on the list.
GE Appliances is moving front-load washers from China to Louisville, starting in 2027. That's $490 million and 800 new jobs. Kentucky's incentive deal for the Louisville complex now adds up to $113.5 million, and the city threw in another $4 million in cash. GE Appliances is owned by Haier, which is a Chinese company. Kentucky's basically paying a Chinese company to move its own production from China to Kentucky.
Now walk through that complex's history with me, cause it explains the whole thing.
In 1973, Appliance Park employed about 23,000 people. By the Great Recession, it was down to about 4,000. In 2023, it was around 7,000. Even with 800 new washer jobs, it's nowhere close to what it used to be.
The new washer plant is being built as a model factory for automation and robotics. I don't blame GE for that, cause every factory does it now. It's just the part nobody says out loud at the ribbon cutting.
US factories make more than twice as much stuff as they did in 1979, which is the year factory jobs peaked. Since then, we've lost more than 7 million of those jobs. Economists say the biggest reason is automation, not trade. So when a factory comes home, it doesn't bring the old jobs with it. It brings machines and a much smaller crew.
You can see it in San Antonio too. Toyota's plant built more than 197,000 vehicles last year. After the expansion, it'll be able to build 350,000 a year with about 6,000 workers.
So if most of the jobs don't come back, who wins? The best proof is from Trump's first term. In 2018, he put tariffs on imported washing machines, and economists tracked exactly what happened.
Washers went up about $86.
Dryers went up about $92, and dryers weren't even tariffed.
American companies raised their prices right along with the importers.
Americans paid about $1.5 billion extra a year. The government only collected about $82 million of it. The researchers found the foreign brands passed their costs on, and the US makers just kept the extra money as profit. The tariffs created about 1,800 jobs, at a cost to shoppers of about $815,000 per job.
That's how it works. When something's built here, there's no tariff on it. The company raises its price to match the imports, and it keeps the whole difference.
Then DC sweetens the deal.
Trump's tax law lets companies write off the full cost of new equipment in the first year. It also added a special 100% deduction for new factories. Apple got out of a 100% chip tariff by promising to spend $600 billion here, and analysts said that pledge looks a lot like what Apple spends anyway.
For stuff that's still imported, you pay the tariff through higher prices. Yale says tariffs cost the typical household more than $1,000 a year. When the Supreme Court threw out Trump's emergency tariffs in Feb, a judge ruled the importers are owed refunds. Those refunds could reach $175 billion, and they go back to the companies that paid at the border. They don't go back to the people who paid the higher prices at the store.
Either way, the company comes out ahead and you don't.
Meanwhile, the jobs keep going the wrong way. The US has lost 75,000 factory jobs since Trump came back, and spending to build new factories is down 30%.
And it gets worse.
The Reshoring Initiative compared 190 products and found the China factory price averaged about 60% of the US price. That means the US version cost about two-thirds more, before anybody added a markup.
So, the manufacturing companies are getting tax breaks to build factories with the latest automation technology to build things faster and cheaper - and to charge you more for the products.
USA! USA!
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