Yes, tax policy compounds the problem; if you have a warehouse of goods, you're already risking that your tangible goods will be damaged by mold, rodents, fire, severe weather, improper employee handling, theft, or changing market conditions. Now on top of that the IRS treats your inventory as if it's an appreciating asset, and Sarbanes Oxley makes you out to be an enron-class criminal if you claim to hold any value there -- because it's not as easy to audit as other financial instruments as stores of value.

We could definitely retool our regulatory policy if we want to improve our posture in the trade conflict.

This came up a while back and no one seemed to be able to say what tax is paid on inventory. The best we could work out was you need a warehouse and warehouses are taxed as they are real estate.

JIT is about freeing up capital (which in the 80s when JIT came in was expensive). It also reduces waste a lot.

> Isn't one of the problems that JIT was made to solve that there is a tax on inventory?

Then hold that inventory in Canada or Mexico or India or China? This isn't a hard problem.

I would expect that it depends on the state.