We are entering a golden age of tariffs. Once upon a time, tariffs were among the most divisive aspects of American and global politics. Then came the end of World War II and 75 years of nearly unbroken movement toward free trade around the world. Now, with the first Trump administration’s China tariffs, the Biden administration’s continuation of those policies, and the tariffs of Trump II, that period appears to be at an end.
No mention in your piece about the work the Biden administration did to regenerate US based manufacturing through the IRA... which every single Republican voted against...
One issue that not many have considered: The reason that the supply chains are spread out throughout the entire world is to lower costs. With a return of all manufacturing to the U.S., everything is going to cost much more, because labour costs are higher in the U.S. Will consumers be prepared to pay the difference? Could they afford those goods if wages don't increase proportionally?
I am not so optimistic about the trade war ending as long as Trump is in office. Ending it would require him to admit he was wrong about one of his central beliefs, and he is psychologically absolutely incapable of doing that, and will trash the markets, the economy, and his own approval rating before doing that.
Zachary, thanks a million--oh, what the heck, a trillion!--for your analysis, and I think your characterization of the situation as "tariff theater" is brilliant. I'll become a paid subscriber when I have more means available. Meanwhile, I think your stuff and the attitude that fuels it is great. If you have the time, please check into Freshpolitique, my own effort to set forth positive outcomes to protracted problems in world affairs.
Is reshoring really an all or nothing proposition? 25% tariffs should be enough for some, not all, manufacturing to return to the US. Will it be worth it? … Maybe.
No mention in your piece about the work the Biden administration did to regenerate US based manufacturing through the IRA... which every single Republican voted against...
https://www.nbcnews.com/business/energy/inflation-reduction-act-sparked-manufacturing-clean-energy-boom-rcna167315
And this without major crippling tariffs.
One issue that not many have considered: The reason that the supply chains are spread out throughout the entire world is to lower costs. With a return of all manufacturing to the U.S., everything is going to cost much more, because labour costs are higher in the U.S. Will consumers be prepared to pay the difference? Could they afford those goods if wages don't increase proportionally?
I am not so optimistic about the trade war ending as long as Trump is in office. Ending it would require him to admit he was wrong about one of his central beliefs, and he is psychologically absolutely incapable of doing that, and will trash the markets, the economy, and his own approval rating before doing that.
Zachary, thanks a million--oh, what the heck, a trillion!--for your analysis, and I think your characterization of the situation as "tariff theater" is brilliant. I'll become a paid subscriber when I have more means available. Meanwhile, I think your stuff and the attitude that fuels it is great. If you have the time, please check into Freshpolitique, my own effort to set forth positive outcomes to protracted problems in world affairs.
Brilliant piece. I'd never thought of it from this perspective - thank you for laying it out so clearly.
This is a train wreck.
Is reshoring really an all or nothing proposition? 25% tariffs should be enough for some, not all, manufacturing to return to the US. Will it be worth it? … Maybe.
"That isn’t an optimistic take on the current situation"
Remember, optimism is a state of mind, not a state of the world. We need optimistic leadership.