Manufacturing dreams, economic nightmares

Like many, I can’t wait for Trump to declare “victory” in connection with the supposedly 200+ trade deals that he’s promised to be making in the coming three months. That claim of victory, of course, is inevitable, irrespective of how any of those supposed deals are resolved – or even if they’re resolved. In any case, once victory is declared, maybe then we can contain the damage from the self-inflicted wounds that Trump’s on-again-off-again tariff announcements have propagated.

While Trump often cites tariffs as being necessary to rectify unfair trade practices and to resurrect our manufacturing base, these rationales are specious. Prior to the second Trump administration, the US had taken a leadership position in defining the parameters of international trade. During past decades, we had been a direct party to a host of trade agreements. Trump is taking a sledgehammer to deals that we’ve largely been responsible for – including those negotiated during his first term, notably, the US-Mexico-Canada Agreement implemented in July 2020. At the time, Trump took credit for the agreement and characterized it as “the largest, most significant, modern, and balanced trade agreement in history. All of our countries will benefit greatly.” Gee. What happened?

If we really want to reinvigorate manufacturing in the US any time soon, tariffs aren’t the way to do it. The better way would be to expand our trading opportunities by allowing our domestic producers to access more clients and customers from abroad. Tariffs, which invite retaliation, will have exactly the opposite effect. As desirable as a resurgence of US manufacturing may be, facilities required to affect such capacity take years to put in place. On any reasonable cost/benefit assessment, the costs of the tariffs in terms of immediately higher prices, lower economic activity (and hence higher unemployment), and of course the ill-will we are causing with respect to relations with allies and trading partners, far exceed whatever expansion of manufacturing activity we’re likely to see, certainly over the next several years.

Given the damage that Trump’s on-again-off-again tariff announcements have caused, not only to our own economy but to those of our allies and trading partners as well, I doubt that we will be able to resume the leadership role that we once had with our counterparties any time soon. The damage from loss of goodwill and trust that this administration has fostered will not be easily reversed. Most likely, the best we can hope for is a return to some measure of stability, where a reduced level of uncertainty will begin to evolve. But who knows when that will happen.

Domestically, Trump has already taken a wrecking ball to federal employment, both public and private institutions dependent on government funding; and in all likelihood, further cuts to government services in the next fiscal years will be coming out of this Congress. From where I sit, as long as US policies continue to be dictated by Trump’s desire for self-aggrandizement, prospects for any substantive economic improvements in the foreseeable future seem likely to fall firmly within the slim-to-none range. Put another way, expecting a rosy economic scenario to evolve any time soon out of this Trump-induced chaos seems nothing short of delusional. Unfortunately, a lot more damage may be done under Trump’s leadership before that problem gets corrected.

The good news – if there is any – is that Trump’s incompetence is becoming more widely recognized, as reflected by the plethora of anti-Trump demonstrations that are happening in larger numbers and greater frequency as time passes. To be clear, those demonstrators are reacting not only to Trump’s chaotic economic management but also to the ruthless cruelty that his administration has demonstrated. Economics is only a part of their discontent. Increasing numbers of people are having direct or indirect exposure to the pain and anxiety that Trump’s policies have precipitated. Moreover, people don’t like the idea of US citizens being deported without due process. If it could happen to them, it could happen to any of us.

That said, to my mind, it’s a stain on America that so many of us seem to be willing to accept the idea that due process should apply only to US citizens. It’s abhorrent to me that, in our name, ICE officials are disappearing people and shipping them off to foreign prisons already infamous for their violations of human rights where they will be warehoused without redress for who knows how long. One Guantanamo is too many, but now we see Trump encouraging El Salvador and who knows who else to build additional gulags that Trump is itching to fill. Our taxpayers are paying for these activities, and they’re deplorable. When it comes to championing human rights, we’ve lost considerable authority. That, too, will be a loss that will be hard to recoup. America has been tarnished.

Given the persistent evidence of incompetence and cruelty that has been so abundantly demonstrated throughout Trump’s first 100 days, I don’t think it’s a stretch to expect antipathy to Trump to grow. Our likely salvation from this situation is that that antipathy will serve to pressure Republican legislators to finally summon the courage to go against him. That tipping point has not yet arrived, but it can’t come soon enough.