Wyze pays $255k of tariffs on $167k of floodlights

Original Article ↗ Hacker News Discussion ↗

Immediate reaction to Wyze’s tweet

  • Some replies are supportive; others attack the company, including over past product issues like “bricked” smart bulbs.
  • Wyze reportedly paused most shipments to the US but chose to absorb this specific tariff hit to honor a retailer commitment.

“Just move manufacturing” vs supply chain reality

  • Many criticize suggestions to “move manufacturing to Seattle/US” as naïve about modern supply chains.
  • Points raised:
    • Products rely on dozens/hundreds of components from many countries; moving final assembly doesn’t remove tariffs on imported parts.
    • The US lacks sufficient local capacity for high-volume consumer electronics, especially PCB fabrication.
    • Building new factories takes years and would itself incur tariffs on equipment and materials.
  • Counterargument: each stage of the supply chain can relocate separately; moving final assembly and sourcing components from non‑tariffed countries can eliminate much of the tariff burden over time. Others reply that scaling this across “hundreds of factories” is effectively impossible in the short term.

De‑risking from China vs reshoring to the US

  • Some see the tariffs as “working” if firms move production out of China, even if they go to Vietnam, India, or similar.
  • Others argue the US cannot realistically replicate China’s manufacturing scale, labor pool, or cost base; best case is a split global chain with a smaller, high‑cost US branch.
  • Concern that instability and sudden policy shifts make the US an especially risky base for global manufacturing.

Circumvention via third countries

  • Expectation that intermediaries in countries like Cambodia, Vietnam, etc. will import from China, lightly process or re‑label goods, and export to the US.
  • Some note governments know this pattern from past tariffs/sanctions and try to police it, but shell companies and limited enforcement capacity make it hard to stop completely.

Impact on small businesses and sectors

  • Widespread worry that sustained tariffs at these levels will bankrupt many small and medium import‑dependent firms, with knock‑on job losses.
  • Examples mentioned: PC hardware brands, electronics makers, and board game publishers already slowing production or cutting staff.
  • Some companies reportedly redirect shipments away from the US to Europe/Africa until policy stabilizes.

Who benefits? Competing views on tariffs’ purpose

  • Pro‑tariff arguments:
    • Act as an import tax to offset cheaper foreign labor, potentially making US production price‑competitive.
    • Revenue can, in theory, subsidize domestic industry.
    • Serve as leverage to force trading partners into negotiations or to reduce Chinese influence.
  • Skeptical arguments:
    • Tariffs are a regressive tax on all US consumers and non‑exempt importers, while large corporations often secure exemptions.
    • Unstable, politically driven tariffs discourage long‑term factory investment and push firms to other non‑US countries instead.
    • Domestic producers may respond by pricing near “import+tariff,” gaining protection without improving quality or global competitiveness.

Broader economic and political context

  • Debate over whether the US “needs” more manufacturing given high GDP per capita and low unemployment, versus concerns about underemployment, hollowed‑out regions, and middle‑class decline.
  • Some argue tariffs are a poor substitute for policies like strong unions and progressive taxation that historically supported the US middle class.
  • The discussion repeatedly veers into partisan politics, with sharp criticism of both anti‑trade progressives and tariff‑heavy Trump‑era policy, but there is no consensus on an alternative strategy.