TARIFFS, AGAIN
Pres. Trump this week raised tariffs on many nations. What is the rationale? Trump is acting out what one writer calls “defiant nostalgia”. He remembers a time from the 1940s to the 1970s when Americans drove US cars, dressed in US- made clothes. He remembers when over 25%of US jobs were well-paid manufacturing jobs, concentrated in the center of the country. Now the figure is 8%, and the center of the country has been hurting and is the base of his support. Trump also wants to use tariff money to reduce income taxes, a move mainly benefiting the rich.
The manufacturing jobs are not coming back, for several reasons. Many businesses are not going to risk a major investment in the US based on a tariff wall that can be removed at the stroke of a pen. Some factories will be built, but they will not employ many workers. Technology has moved on; a modern factory is highly automated.
So what will raised tariffs achieve? Higher prices for all kinds of goods, antagonized trade partners, a reduction of economic activity, maybe a recession. The rich will pay lower taxes, regardless.
Sources: The New York Times, 4/1/25 and 4/4/25