Is there any chance or likelihood that Trump’s tariffs could – in time – result in the return of manufacturing jobs to America and the economic utopia that he’s predicting? Looking for intelligent, rhetoric-free discussion. Thanks.
The reason manufactured goods are cheap enough for Americans to own—the reason even poor families have smart phones and multiple TVs—is that production costs in most countries are much lower than they are in the US. When production costs are low, more items can be made and sold for less money, increasing market supply. When this happens, costs fall and customers win. They can buy more with less money.
Most consumer goods take advantage of this dynamic in modern America. Without this manufacturing loophole, goods would be far more expensive because they’d rely on American production costs for their creation, and we’d all have far less stuff.
Affordable consumer goods go hand-in-hand with foreign goods because the cost of living is lower in many other countries than it is in the US. We cannot produce affordable goods of high enough quality to be worth making until and unless our markets crash sufficiently to make life cheap here as well.
Sale of Slaves in Cairo by Jean-Léon Gérôme. Public domain.
Without creating a voluminous underclass desperate enough to take scraps to create gems, American manufacturing cannot be competitive. If it is not competitive, only people wealthy enough to pay premium prices will be able to afford it.
This is why Americans prior to globalization had less stuff. They had an easier time buying homes and services (education, healthcare, childcare) than most of us do now because all goods worked with the same basic overhead costs. Wages couldn’t be had below a certain floor, land impossibly cheap did not exist, and all of that led to greater wealth equality. But equality does mean we all live with less.
When a global market became practical for consumer goods, consumer goods got cheap because cheaper labor and cheaper land than was accessible in the US was suddenly exploitable. The savings from that exploitation were passed on to the consumer, and we all have a whole lot more stuff than we had before—but services remain expensive.
Un Marché de Nuit by Petrus van Schendel. Public domain.
Stuff used to be expensive too. That’s why we had so much less of it in our grandparents’ day.
Now, I’m no big fan of stuff. I’m okay with us all having less. I’m happy to do away with fast fashion and one-phone households sound dreamy to me. Maybe companies will start making hard-wearing goods that will last, given people won’t be able to buy goods very often anymore. That’d all be excellent.
But the raw fact is that we can’t buy this much stuff if most or all of what we consume is made in America. It’s impossible without a market crash severe enough to plunge most of the population into abject poverty.
And if that happens, most of us will be producing goods and rendering services we can’t afford to buy.