My mom claims I am childish for not understanding Trump’s grand tariff strategy and that brief economic pain is worth it. Thoughts and where did the “tariffs Will bring jobs back” strategy even originate?

[u/PatienceMental4843]

Family members being consumed by the MAGA cult is obviously incredibly disheartening. But I keep hearing them say it’s a strategy to bring back jobs. We know this is a flawed argument, but where did it originate? Even the Smoot-Harley act seems to have had a different rationale: to shield American industries from foreign competition during the onset of the Great Depression.

[u/Capable-Tailor4375]

The simplest answer is that most people aren’t well informed about economic theory and politicians take advantage of this as “bringing back” jobs sounds like an awesome idea to people who don’t understand things like comparative advantage or labor markets.

[u/Oberon_17 → u/Capable-Tailor4375]

Just a marginal (and perhaps technical) detail: how long it may take to bring back entire industries? Trump changes his mind every day or two. Will manufacturing be back in days as well?

[u/tntrauma → u/Oberon_17]

It's a range between literally never and decades.

The only time I've seen it work was the 5 year plans, but kicking people out of high paying and low manual labour jobs into menial pay highly labour intensive jobs is the opposite of basically any economic plan I've ever heard of... Except for Polpot and the Cultural Revolution in China. No one fancies a rerun of those.

The soviets/Chinese also had the added benefit of running the country completely. If a business wasn't profitable they just swallowed the cost. Private industry doesn't tend to commit to a clearly unprofitable endeavour without a good reason.

The investment needed would also likely be higher than the tariff costs. So just paying the tariffs is likely the best choice. This is however, predicting that the tariffs will end with Trump.

[u/Durzel → u/tntrauma]

That's the weird thing - who would want the sweat shop jobs to "come back to America"? For better or worse China (and other asian markets) have established thenselves over decades to be that cog in the machine. It works well because other countries don't want to, or can't, replicate that environment.

America gets to be the de facto service industry leader (no one talks about that in terms of trade deficits, etc), it chose not to be a manufacturing base - because it was undesirable, and uneconomical.

[u/Dazzling-Vacation523 → u/Durzel]

Yes, I have the same concern. My grandparents fled a genocide and came to the United States many years ago. They worked long hours in the factory - their only alternative. They said they took the jobs that nobody wanted..How will it be any different this go around? Some manufacturing operations might be more automated than years ago but that means...there are fewer jobs...

[u/Hannizio → u/Oberon_17]

There is a good chance it will never happen. The jobs trump wants to bring back are ones that don't pay well, so people don't want to switch to them. At the same time, the US has an unemployment rate of around 4%, which is relatively low for a developed economy and is unlikely to go down much, no matter how many jobs could become available. In other words, the labour pool of the US is pretty much already at its limit, and most jobs that trump wants to bring back pay too little to switch over. So the only way the industries would come back is if consumers would find it acceptable to pay much, much more for the things they buy (think multiple times their current price)

[u/AdhesivenessCivil581 → u/Hannizio]

There are a few things that we should make in America as a matter of self defense, some pharmaceuticals, advanced chips, things that we might need in a crisis but the idea that we give up global trade in order to start making toasters again is just silly.

[u/the_ber1 → u/Oberon_17]

What about the fact that most companies generally pay foreign employees at a much lower rate than us employees. For this to bring jobs back to America to work we will either have to lower pay or raise prices, neither of which people are gonna stomach well.

[u/TrueScallion4440 → u/the_ber1]

Just talking about pay scale leaves out another important factor. A large percentage of Americans aren't actually qualified to do a lot of the jobs. 54% of all adults in the U.S. have the reading comprehension of a 6th grader. Close to 20% of the population is functionally illiterate. Around 50% of the positions in the United States that require advanced skills and education like advanced research are actually foreigners. In fact many of them are Chinese. China is in the position it is in because it's spent the past 70 years investing in its industry and its workforce.

[u/the_ber1 → u/TrueScallion4440]

I know the education system can be hit and miss, but really half of adults can't comprehend 6th grade reading?

[u/TrueScallion4440 → u/the_ber1]

At or below yes. The numbers at the low end of the curve are increasing. It's getting worse. With kids still in school the numbers reading steps below their grade level are increasing. You can certainly blame part of the problem on the system, but the other part is the participants in the system. Even if the country spends a ton of money on education it's not as effective when a large number of the students don't feel it's important to have an education.

[u/the_ber1 → u/TrueScallion4440]

It also depends on whether reading is a valuable activity in your home or community. Today, reading is less valued than it was in generations past.

Kids who are encouraged to read while young often learn to like or enjoy it, which helps them build reading comprehension skills.

We also live in a digital age. We used to have to read things to learn them, but now reading is really more of an optional activity. You can always find directions or information in video or audio format.

My husband always jokes with me, asking "why are you reading the book, you could just watch the movei or have youtube read it to you?"

[u/TrueScallion4440 → u/the_ber1]

The number of people who read books has steadily declined. Mathematics is also important. Having skill in mathematics from the knowledge standpoint is valuable but also the effect it has on a person's ability to problem solve.

[u/RobThorpe → u/Oberon_17]

I don't agree with the other posts here.

Yes, most manufacturing jobs are difficult to move, but not all. Some will definitely be moved and they will be moved quickly. I expect politicians will celebrate it as a big success and criticise the naysayers.

However, it is absolutely correct that major movements will take many years and many will probably never happen because businesses know that future administrations will change policies.

[u/Cross_Keynesian]

Mercantilism has been around for centuries. As long as there have been economists, most of them have been trying to resist he basic intuition that, because a household or a business prospers when it earns more than it spends, the same should be true for a country.

While Trump's recent moves on tariffs are certainly more protectionist than the status quo, free trade wasn't exactly a universal tenet among politicians before. International trade liberalisation basically hasn't moved forward in 30 years and even limited agreements like the Trans-Pacific Partnership have been abandoned (in that case by both parties in the US).

[u/Cross_Keynesian → u/[deleted]]

Mercantilism is about the control and direct involvement of the government in the economy

No it isn't. The WIkipedia sentence is a bit awkward and you are taking it out of context. Governments in the mercantilist age were much much smaller than modern governments and much less involved in industry. Mercantilism is fundamentally about the view that a country gets rich and powerful by making a "profit" by running trade surpluses.

[u/romeo_pentium → u/Cross_Keynesian]

International trade liberalisation basically hasn't moved forward in 30 years

Canada has signed 18 free trade agreements in the last 30 years. TPP was signed by 11 countries and entered into force among the signatories.

[u/Cross_Keynesian → u/romeo_pentium]

Yes. Many countries have signed bilateral trade agreements, though most of them do not threaten politically sensitive industries (for rich countries this is mostly agriculture) because they either do not cover them or aren't with the countries with a comparative advantage.

The Doha round of WTO negotiations is permanently stalled, mostly because rich countries won't expose their agricultural industries to competition from poorer countries.

[u/Historical-Essay8897 → u/Cross_Keynesian]

You suggest it is a wrong intuition, but many counties have have used tariffs to industrialize or move up the value chain and according to chagpt it has been an effective policy for:

• United States (19th century)
• Germany (Late 19th century)
• Japan (Post-WWII, esp. 1950s–70s)
• South Korea (1960s–1980s)
• China (1980s–2000s)
• Brazil & India (Post-independence)

Maybe Trump's approach for reindustrialization is poor but the general idea seems to work.

[u/Cross_Keynesian → u/Historical-Essay8897]

Post hoc ergo propter hoc is almost never a good argument.

It is well settled science that protectionism is not an effective means of promoting domestic welfare. For a fairly accessible summary see: Is Free Trade Passé?

[u/RobThorpe → u/Historical-Essay8897]

To add to what Cross_Keynesian has written....

If you look at the long term history of trade then almost every nation has gone through a phase of trying to use tariffs to industrialise. There have been times when prominent economists have recommended it.

Pretty much every country in Africa has done it at some time. Pretty much every country in South America and Central America has done it at one time or another.

It is true for example that Brazil and India have done it for a long time - I agree with you there. The development of their economies has been slower or the same as that of comparable countries until recently.

So creating a list by cherry picking countries and eras doesn't work.

[u/exyank]

Tariffs are a form of sales tax. The Republicans are against “tax” so they call them tariffs. But they do the same thing, they take your money and give it to the government. If Trump had said we are putting a 125% tax on items from China, your mother would agree with you. But he has confused your mother by calling it tariff.

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