Trump's Tariffs Won't Ever Restore US Manufacturing Glory

Latest stories

Neither US nor China ready for once-in-a-lifetime trade war

Why of all days is Xi visiting Cambodia on April 17?

Japan's delicate surge of top-tier Chinese workers

But for Trump, the thinking is likely related to a combination of nostalgia for a bygone (somewhat imagined) age of manufacturing and concern over the loss of quality jobs that provide a solid standard of living for blue-collar workers – a core part of his political base.

Nostalgia is not a sensible basis for forming economic policy. But the role emotions play in international affairs has been receiving more attention. It has been identified as an “emotional turn” (where the importance of emotion is recognised) in the discipline of international relations.

Of course, that's not to say that the concern over jobs and the unequal effects of globalzsation 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.

Many blue-collar workers, like these GM car plant employees in Missouri, have paid a high price for globalisation. Jon Rehg/Shutterstock

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 globalisation, which Trump is seeking to reverse. But research shows that trade and globalisation 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 double-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.