Trumps Good Ideas…… But…. Terrible Execution.
The big mess of the trade reset using tariffs.
Many voters in the USA and some in Canada agreed with Donald Trumps policies that stated that most western nations must ….. Reduce their exposure to global trade and immigration…. Stop the climate emergency nonsense…… Get North American energy security and independence…… Focus on citizen prosperity by recovering the industrial sectors…… And focus far less on wasteful multilateral and woke ideology…. So that we can get back to strong nationhood that benefits the USA citizens.
Well 100 days into his mandate it’s all become a very confused and risky affair……
Many initiatives are moving forward such as a reset and rework to immigration activity and the reversal of the climate NetZero mandates, and the review of government waste… but the biggest mess is the trade reset using tariffs.
In my recent book Take Back Manufacturing I had explained how his policies could develop a true North American trade bloc that over time would improve the local North American economies by the value-adding effect of significantly reshoring some of the global supply chains. And, if this was done correctly it would create a firm net benefit of improved prosperity for the whole citizen population.
Unfortunately, the current approach of “immediate across the board” tariffs on both local and offshore trade partners is going to be a huge disaster. It will significantly destabilize the US economy such that his political, industrial and electoral support will badly suffer.
He is correct that tariffs offer a great way to localize supply chains and also fund the reshoring transition with the increased government revenue, but he should have tabled a plan that far better strategically balanced the reshoring opportunities with the supply chain challenges and risks.
The implementation plan should have also gathered far more input from all interested parties in the business community to achieve general agreement and support for the trade transition plan.
He should have used a lot more supply chain science and knowledge to only initially tariff the the imports of the many products, commodities and resources where spare USMCA capacity could easily have been ramped up without too much supply chain disruption, and where alternative North American made products already exist.
Although he is correct to want to renegotiate the USMCA trade agreement so that it becomes a unified North American trade-bloc he should not have immediately tariffed Canada and Mexico as those supply chains are significantly interconnected across the three nations, and high economic dependency exists in many US states that demands stability across the USMCA supply chains.
He must be made to realize that global supply chains have been built over the last 35 year and many of them cannot suddenly be reversed or duplicated in a matter of weeks. It takes time to decouple from existing global suppliers and finance and build new local supply capacity.
What could work is aggressive but realistic deadlines to start phased in tariff action to allow the reshoring journey to be undertaken without so much supply chain disruption, but all this sudden knee jerk reaction of on again off gain tariffs has confused the industrial and financial markets and allowed Trumps political enemies who have been warning about Trumps impetus approach to just be able to say…. I told you so!
More on how it should have been done at: www.nigelsouthwayauthor.com