I would like to better understand the reasoning behind what the author says here:
A balanced 16-cavity mold costs 3-4x more than a single-cavity mold but only produces 16x the parts, which is why they only make economic sense above 500,000 units.
I guess if a single cavity mold costs $30,000 and a 16 cavity mold costs $110,000 you have an additional expense of ~$80,000, divided over half million parts is 16 cents. So lets say somewhere from 5-10cents per part to go 16x faster. My numbers might be off a bit but seems in the ballpark. I also don't know much a lego brick costs to make in terms of materials/opex.
In this context, a cavity produces one part. A cavity can only produce, lets say, 200k parts. If you produce 400k parts, you only need a single mold, but you've only used 25k wear on each cavity, but you paid more for the mold instead of only 2 of the cheaper single-cavity molds.
It's not the same thing as being sanctioned. In broad outline, a supply chain risk is a company that can't sell to or have its products or components resold to USG; whereas, a sanctioned entity is one that can't do business with anyone -- anyone who does so will be punished.
Choosing the lowest price is rational for the consumer. Setting the trade policy that allowed that lowest price -- the USA has less protection for the semiconductor industry than it has for textiles -- was the mistake.
Free trade does result in the best prices but it has other, negative effects, and it is when we think as policy makers -- as citizens, not consumers or business owners -- that we are accountable for those effects.
The problem here is not how the US taxes corporations, but rather that there are different corporations involved. A regular citizen can not establish an additional, foreign citizen that "owns" them or "supplies" them with IP (or labor hours, &c) -- this kind of tax management accounting is not possible for citizens.
You still haven't answered the question: What are you going to do when Apple or Google becomes "subsidiaries of a parent that is ultimately not a US entity"? What about your proposal prevents them from registering the parent company somewhere else while changing nothing else about their operations? Making them file different paperwork doesn't accomplish anything.
Well, it doesn't make sense to treat a local branch of a foreign company like a foreign company for tariff reasons -- one role of tariffs is to encourage local branches.
For example, Toyota builds cars in the USA; and rigorously controls how Toyota USA builds cars in the USA. That's actually kind of the point -- from an industrial policy standpoint, it is valuable and useful if companies bring their technology and approaches here and administer them with their knowhow.
Regarding government contracts, it could probably come down to some percentage of ownership or the way control is administered; but many defense companies are publicly traded and that means they can be owned in part by foreign entities (people or corporations).
> No government contracts (or super strict rules to get them)
Now you've created a disadvantage for corporations to bid on government contracts, reducing competition and causing the government to pay more for stuff. Meanwhile the companies that actually bid are then the ones that specialize in lobbying the government and register locally and other corporations still register elsewhere.
> tariffs
If you were going to use that you could just as easily use VAT to begin with.
foreign-owned companies already are at disadvantage (rightfully so) getting gov contracts. so if you gonna try to evade paying taxes claiming you are based in Burma the government should treat you accordingly. given that there is no bigger customer than US government the companies might re-think their Burmese HQ?
> given that there is no bigger customer than US government the companies might re-think their Burmese HQ?
Only if the percentage of their business represented by US government contracts is more than the US corporate tax rate, i.e. only for companies like Lockheed whose business is focused on government contracts. But those are some of the largest "domestic companies" being put at a disadvantage by the existing tax system because they already can't use the same international tax avoidance strategies as other companies when they're required to use domestic supply chains by those same government contracts.
Meanwhile the companies that do lower percentages of their business with the government would just stop doing business with the government at all, causing the government to pay more for things because that company would otherwise have been the one to get the contract by being the one to offer the government the best price.
Uber was found liable under the doctrine of "apparent agency" -- although Uber drivers are independent contractors, they are presented to the end user in a way that conveys a strong impression of acting on behalf of the company -- being agents of the company. Therefore, their independent contractor status is no obstacle to holding Uber responsible for their conduct.
They certainly wouldn't allow EU tech companies access to the US defense market, while of course insisting that the EU and other NATO members buy US built weaponry.
This is really ridiculous. There are many successful EU vendors of defense technology to the US military. Safran, Schmidt & Bender, Heckler & Koch, Saab, Glock, Fabrique National -- there is a long list. The USA has built real partnerships in these areas.
One amusing example is the C7 and C8. These are AR-15 (M16) variants made by Colt Canada and adopted by the militaries of the Netherlands, Denmark and Norway; and used by special forces in the UK.
Where are you getting your information from, that the US wouldn't allow wouldn't allow EU tech companies access to the US defense market?
They're going to the US for the VC funds and the capital markets, which is America's great competitive advantage globally. In the few industries I went through (PaaS, Health, Finance) what I got was that the regulatory environment in Europe was welcome for being stable and clear, or existing at all in a few cases. There's been one case where I've seen regulation being an issue and preventing business from being fully conducted in Europe, and that was related to banking (in that instance that company had to be set up in Dubai).
Tell me which NATO country came crying, triggered NATO Article 5 and as a consequence a good number of EU NATO (and even non-NATO) soldiers have died for the sole interests of said country?
Why are you moving the goalposts from your parent's point?
Yes, the middle eastern wars were a huge issue form the US, but that doesn't explain EU own goaling itself for 20+ years with terrible policies and choices, with or without helping the US in the middle east.
I am saying that for last 30 years actions of European NATO counterparts was not "undermining the relationship".
Also since 2014 there was a 10 year plan devised to get everyone to strictly follow 2% budget commitment. Which happened before you and I even heard about trump starting a presidential campaign (or even if it was there was nothing about NATO, etc). This happened (better later than never) due to ruzzian attack on eastern Ukraine and with a nudge from Obama administration.
Due to 2022 total war from ruzzia against Ukraine - I believe right now there are talks to commit up to 5% in long run, with at least up to 3.5% in next decade.
I know that Europe doesn't have great PR team, but USA is getting better and better at gaslighting (ruzzia has decades of experience in divide and conquer tactics) that Europeans are allegedly freeloading. Europe has it's problems, but it's solving them democratically, whereas USA needs to see herself in a mirror, before it's too late.
My understanding is that the 2% budget commitment was met or exceeded by all NATO countries only as late as 2025. The Obama administration ended in 2017.
Europeans not taking care of themselves has been "undermining the relationship".
I see -- when you wrote "Which happened before you and I even heard about trump starting a presidential campaign..." you were referring to coming up with the plan, not meeting the target.
A balanced 16-cavity mold costs 3-4x more than a single-cavity mold but only produces 16x the parts, which is why they only make economic sense above 500,000 units.
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