Tariffs, Part 6.

By Michael C. Dennis

As President of Acme Sock Company, you’ve sourced from Mexico for over a decade, but now you’re considering building a new Michigan plant, betting that a 25% tariff will make your U.S.-made socks price competitive.

Before committing, ask yourself:

• Will the long-term profitability justify construction costs (millions of dollars), the timeline for the build (years), and higher U.S. labor expenses (~5 an hour in Mexico vs. ~20 an hour in Michigan)?
• The 25% tariff helps, but will it last?
• Can domestic production match Mexico’s efficiency and supply chain reliability?

Long-term stability matters more than short-term gains. Building in America only works if cost advantages are sustainable—but today’s volatile tariff policies strongly suggest that stability isn’t guaranteed