There are lots of good economic arguments for the insanity of Trump’s recent tariff increases. Trump believes that his tariffs will transfer economic activity from our trading partners to the United States. I won’t bother to repeat the usual arguments here. Instead, I propose a thought experiment.
Assume that the Trump tariffs do indeed lead to production moving to the U.S. We will resume making shoes, building ships, assembling cell phones and televisions, making textiles and apparel. Where are the workers needed to pursue these activities going to come from? The unemployment rate—in the non-governmental sector anyway—is already low. Moreover, Trump is limiting immigration and deporting immigrants already in the workforce. Many of the workers that will be needed require special skills. Where are those workers now? And, of course, there are some activities that just cannot be pursued at scale in the U.S. We cannot grow bananas, coffee, tea, or tropical spices. Tariffs will never allow our country to grow the nutmeg it needs. Perhaps some of the needed workers will come from those thrown out of work because the products they have been making have become too expensive for Americans to buy. For example, auto workers may be in this category. (The U.A.W. has mistakenly applauded the Trump tariffs. It will regret that.)
Alas, if the Trump tariffs are allowed to stand, America will be poorer. And the world will be poorer. A worldwide depression is not unthinkable.
