Trump Thinks Tariffs Can Bring Back the Glory Days of U.S. Manufacturing. Here’s Why He’s Wrong

Of course, that’s not to say that the concern over jobs and the unequal effects of globalization is misplaced. It is clear that blue-collar workers have suffered in the US (and elsewhere) for the last 40 to 50 years, with governments paying little attention to the decline.

Data on weekly earnings in the US split by educational level show that wages for those without a degree have declined or stagnated since around 1973, particularly among men. This is the cohort that disproportionately voted for Trump. Globalization has created many benefits, not least to the United States, but these tend to be concentrated among the better educated.

All too often the service-sector jobs that have filled the gap left by declining manufacturing have been precarious. That means low wages, low security, lack of union representation and few opportunities for moving up the ladder. It is unsurprising that there has been a backlash.

Can’t Turn Back the Clock
So will Trump’s tariffs plan address this? The great tragedy is that there is little reason to think that they will.

The loss of manufacturing jobs is partly about globalization, which Trump is seeking to reverse. But research shows that trade and globalization are often more of a scapegoat than a driving force, responsible for only a small chunk of job losses (typically said to be about 10%).

The main cause of manufacturing’s decline is rising productivity. Today it simply requires fewer people to make goods due to the relentless increase in automation and the associated rise in how much each worker produces.

If the whole US trade deficit were rebalanced through expanding domestic industries, this would increase the share of manufacturing employment within the US by about one percentage point, from about 8% today to 9% according to US Bureau of Labor Statistics figures. This is not going to be transformative.

The effects of tariffs are also doubled-edged. They will probably shift some manufacturing back to the US – but this could be self-defeating. More US steel production is good for workers, but the higher cost of US steel feeds through to higher prices for the products manufactured with it.

This includes the cars Trump obsesses about. Less competitive prices means lower exports and a loss of jobs. The Lord giveth and the Lord taketh away.

The 1950s were a unique time. By the end of the second world war, the US was a manufacturing powerhouse, accounting for one third of the world’s exports while taking only around a tenth of its imports.

There were few other industrialized countries at the time, and these had been flattened by the war. The US alone had avoided this, creating a world of massive demand for US exports since nowhere else had a significant manufacturing base. That was never going to last forever.

The other point about that time in history is that the economic system had been shaped by colonialism. European powers had used their position of power to prevent the rest of the world from industrializing. As those empires were dismantled and the shackles came off, those newly independent countries began their own processes of industrialization.

As for the US today, President Trump is mistaken if he really believes that tariffs will bring a new golden age of manufacturing. The world has changed.

James Scott is Reader in International Politics, King’s College London. This article is published courtesy of The Conversation.