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Update, Wednesday, April 9, at 2:10 p.m.: President Donald Trump announced on Truth Social this afternoon that, for a 90-day period, he would be lowering tariffs to 10 percent for 75 different countries. However, he will also institute a 125 percent duty increase on Chinese goods. This is not a “PAUSE,” as his post states. The broader spate of tariffs—especially the 25 percent taxes on foreign steel, aluminum, and cars—are still here and will do plenty of damage, so our piece reads below as originally written.
At 12:01 a.m. Wednesday morning, the potentially chatbot-generated “reciprocal tariffs” that President Donald Trump announced at last week’s “Liberation Day” event went into effect. The stock market and the valuation of the U.S. dollar are not loving this, not least since China has countered with 84 percent tariffs on all American goods, and the European Union has just approved its own 25 percent levies on American metals and agricultural output. Yet the Trump administration has pressed on, insisting that this hopeless trade war will lead to a great American manufacturing renaissance reminiscent of the midcentury industrial age.
“Jobs and factories will come roaring back into our country, and you see it happening already,” the president blustered during his speech, shouting out the supportive autoworkers in the audience. “Factories that are falling down—those factories will be knocked down, and they’re going to have brand-new factories built in their place.”
As proof of concept, he named various companies that had supposedly committed to invest billions of dollars into stateside operations, including the Midwestern carmaker Stellantis (formerly known as Chrysler). It was a bit inconvenient, then, for Stellantis to announce just a day later that it was temporarily laying off 900 workers, across Michigan and Indiana, who worked at outposts that provided components for the company’s factories in Mexico and Canada. Those international plants have also been left idle for the time being, as part of a direct response to Trump’s previously announced 25 percent tariffs on foreign cars and parts.
Stellantis—which reportedly stocked up on imported parts in advance of the new tariffs, to the point that it started running out of storage space—isn’t the only American auto company to make such adjustments. The CEO of one Michigan-based supplier told the Wall Street Journal that she’d been planning to build a new regional factory for the manufacture of car parts, before the tariffs made that cost-prohibitive. Already, her company sources at least 80 percent of its products from China—which is staring down the cumulative 104 percent tariff increase from the United States—and no one wants to kick-start long-term plans to set up a homemade factory because of both increased post-tariffs costs and general uncertainty.
Meanwhile, the Biden administration’s Department of Energy had approved major grants for upgraded equipment and improved heating efficiency at steel plants in Pennsylvania and in Ohio (in the latter’s case, going to Cleveland-Cliffs). Those were going to establish new jobs—before Elon Musk’s Department of Governmental Efficiency arbitrarily slashed them. Such freezes have been hitting Trump-loving states and districts for a while now, as the administration (likely illegally) has canceled or delayed Biden-era funds for electric-car and battery factories, wind and solar assembly lines, and even electric school buses. In many cases, these funds had been put to work, constructing relevant campuses and committing to local employment, before facing this disruption.
Now, you might be thinking, is it unfair to judge Trump so early in this tariff regime, when some of these have only been in effect for a short while and others are yet to land? Wouldn’t it be more prudent to wait out the initial shock and see how things pan out? And didn’t Biden also deploy tariffs in his home-manufacturing crusade?
Those are fair objections. I’ve previously written about (and criticized) the Biden administration’s own tariffs on Asian solar-panel components—and certainly, the industry faced myriad headwinds here even as overall U.S. solar production expanded rapidly throughout Biden’s term. There also have been commitments by some companies to reshore their operations. Yet the Big Pharma giants that Trump thanked for domestic investments, like Eli Lilly and Johnson & Johnson, successfully lobbied for tariff exemptions during those planned adjustments. (Also, that relief may not last long, as Trump just told Republicans that he’d like to impose new duties on pharmaceuticals soon.) Trump’s toadies also seem uncertain about whether their aggressive trade warring will actually revive manufacturing here. In a weekend Fox News appearance, Commerce Secretary Howard Lutnick claimed that American factories will employ robots instead of humans—then backtracked by claiming Americans would indeed be employed … mainly to fix said robots.
None of this makes any sense, and that uncertainty alone is enough to scare any investors, executives, and local governments from the yearslong processes involved in building factories, hiring locals (both unionized and not), reshoring supply chains, and rearranging the flow of commerce. The money needs to be made back or at least guaranteed for the long haul. American producers need better incentives, guidance, and cooperation, both within U.S. borders and outside of them.
“It’s unfocused. It’s not picking a few industries the U.S. really wants to develop a plan to succeed in,” Todd N. Tucker, the director for industrial policy and trade at the Roosevelt Institute, told me. “Raising prices for the steel industry, for industries that use steel, for the semiconductor industry, for industries that supply that industry—there’s no strategy.” (On a recent episode of Bloomberg’s Odd Lots, a supply-chain-management CEO pointed out the irony that the machinery needed to build out new American factories will itself become more expensive thanks to the tariffs, since many of our newly taxed trading partners sell us full machines and parts.)
Tucker pointed out how the National Council of Textile Organizations praised some of the new tariffs while expressing gratitude for the carveouts offered to “duty-free imports” from Mexico and Canada, and asking that the government also zero out tariffs for trading partners in South America and the Caribbean. One supply-chain consultant told CNBC, “Companies will look to other countries that are being hit with lower tariffs,” offering this example: “If I’m paying 40 percent in Vietnam and I can get a 20 percent tariff in another country, I’ll go there, because in the end, it is still cheaper than coming back to America.”
There’s also the fact that, after years of this international-trade status quo, certain countries are better equipped for certain manufacturing tasks. As has been evidenced by years of economic studies, plenty of working Americans in the post-pandemic age aren’t itching to fill in the old-school types of physical manufacturing gigs that defined American enterprise in the Cold War. And they’re unlikely to want to return to such jobs as the Trump administration crushes union power and scraps basic worker-safety protections. (Indeed, one of the reasons that the undocumented immigrants being deported by Trump are considered beneficial on net for the American economy is that they will fill in the types of blue-collar positions that other Americans aren’t taking.)
On Monday’s episode of Marketplace, one Oregon-based shoe retailer noted that China has set up “industrial clusters” for the basics of shoemaking. This means that needed materials and knitting factories are located right next to footwear-assembly plants, and the manufacturing facilities themselves are geared toward constantly finding new efficiencies in the process (fixing machines, etc.). Derek Guy, a friend of Slate better known as the “Menswear Guy,” suggested in a Bluesky thread that low-end textiles jobs are not coming back to the U.S., and that the best way to preserve garments employment stateside would be to gear the domestic industry toward high-end fashion while still sourcing cheaper materials from abroad.
It’s the difference, as Todd Tucker puts it, between goods that are “upstream” (individual components) and “downstream” (finished products). One thing Tucker praised about the Biden administration’s trade-and-tariff policy was its focus. “Biden wasn’t picking a lot of downstream products like smart tables—he was picking the steel and chips that would go into a smart table,” Tucker said. “If you subsidize something that all of the other industries use, that can help bring prices down.”
That gets into another part of effective industrial policy: subsidies and other government programs of active support. “A tariff isn’t going to hire people at national labs to do experiments for new tech,” Tucker explained. “For that, you need to have a staffing strategy, a recruitment strategy, and a higher education strategy—a lot of stuff that blunt-force tariffs aren’t going to ever produce.”
All in all, this is Trump’s formula for reviving stateside manufacturing: punishing tariffs on other nations, more expensive input parts for the factories and machines needed here, fewer government supports for existing facilities, an overall climate of uncertainty and distrust when it comes to safe investments and long-term contracts, and domestic industries that are neither willing nor able to do the types of work that foreign workers are trained and ready to do. Does that sound like the key to manufacturing renaissance? Not to me it doesn’t.
