Could Trump's Tariffs Work?

[Richard T]

GDP shouldn't be confused with raw output.

Over the past 50 years, U.S. manufacturing exports have experienced significant growth in absolute terms. Between 1983 and 2005, for instance, exports of manufactured goods increased by 407%.

Part of this is due simply to automation. We are becoming more productive with less labor. We lose manufacturing jobs despite manufactured goods actually increasing.

We are also wealthier than in the early 1900s. More digital services, health services. It's cheaper to import a pair of cheap Nike shoes from a sweat factory in China than it is to ask people here in America to work for 5 dollars an hour producing the same.

And it's not clear that our nation will be able to go in reverse, reversing things like robotics and AI automation, or reversing things like labor laws and social security in favor of getting people to give up cushy IT jobs for manual labor. Nor is it clear that the nation would even want to. That's why so many farmers hire illegal immigrants from Mexico. Because nobody wants to do that work and we have enough wealth to hire someone else to do it.

Think about Tesla for example and what Elon Musk emulates. Tech. AI. Robotics. Huge wealth not in salary but in stocks and investments. Services like Twitter. Service efficiency. Nobody is sitting around wishing they had a job at a steel mill dumping tubs of molten metal at the risk of burning their flesh off. Robots can do that for us now.

Where is "raw output" chart. GDP is the gold standard. In real dollars the US manufacturing has dropped. Service ouput has expanded. Harder to export services to some countries but I believe that has grown. USA is a post -industrial economy now. Except for defense it makes no sense to onshore many manufacturing jobs back.

 

[Job 33:6]

Where is "raw output" chart. GDP is the gold standard. In real dollars the US manufacturing has dropped. Service ouput has expanded. Harder to export services to some countries but I believe that has grown. USA is a post -industrial economy now. Except for defense it makes no sense to onshore many manufacturing jobs back.

You can read about it from the federal reserve economic data under the history section here:

Manufacturing in the United States - Wikipedia

en.m.wikipedia.org

Or you can find a nice graph here:

Exports of Goods: Manufactured Commodities for United States

Graph and download economic data for Exports of Goods: Manufactured Commodities for United States (EXPMANUS) from Aug 1995 to Feb 2025 about exports, goods, commodities, manufacturing, and USA.

fred.stlouisfed.org

"Exports of Goods: Manufactured Commodities for United States" Federal Reserve Economic Data.

I agree that, it will be difficult, if not impossible to reverse things like robotics and AI automation in the manufacturing world. Plus, if it's not national security related, I'm not sure why people should care. If China wants to make knockoff American products at a cheaper price, then it would only make our lives easier. America could still continue to lead the way in innovation regardless. And, I know that people don't like to hear this, but it China makes something special that we like, we can take that information as well. It's not as though this isn't already happening, especially in military tech.

Manufacturing Exports have actually been doing pretty good in America. But Trump's concerns seem to be more ideological than statistical. I think he's more worried about things like intellectual property, or maybe more concerned about people buying more and more Chinese products (aka shopping at Walmart) than American products etc.

But everyone loves Walmart because it's inexpensive. Makes life easier even if it's made in an illegal sweatshop in China. Or like recycling. We put our recycling on a boat and ship it to China, and if it's illegally dumped, nobody cares. As long as someone "takes care of it" and it makes our lives easier, that's just how the world runs.

 

[Richard T]

You can read about it from the federal reserve economic data under the history section here:

Manufacturing in the United States - Wikipedia

en.m.wikipedia.org

Or you can find a nice graph here:

Exports of Goods: Manufactured Commodities for United States

Graph and download economic data for Exports of Goods: Manufactured Commodities for United States (EXPMANUS) from Aug 1995 to Feb 2025 about exports, goods, commodities, manufacturing, and USA.

fred.stlouisfed.org

"Exports of Goods: Manufactured Commodities for United States" Federal Reserve Economic Data.

I agree that, it will be difficult, if not impossible to reverse things like robotics and AI automation in the manufacturing world. Plus, if it's not national security related, I'm not sure why people should care. If China wants to make knockoff American products at a cheaper price, then it would only make our lives easier. America could still continue to lead the way in innovation regardless. And, I know that people don't like to hear this, but it China makes something special that we like, we can take that information as well. It's not as though this isn't already happening, especially in military tech.

Manufacturing Exports have actually been doing pretty good in America. But Trump's concerns seem to be more ideological than statistical. I think he's more worried about things like intellectual property, or maybe more concerned about people buying more and more Chinese products (aka shopping at Walmart) than American products etc.

But everyone loves Walmart because it's inexpensive. Makes life easier even if it's made in an illegal sweatshop in China. Or like recycling. We put our recycling on a boat and ship it to China, and if it's illegally dumped, nobody cares. As long as someone "takes care of it" and it makes our lives easier, that's just how the world runs.

Thanks for sharing the graphs. The first graph shows manufacturing declines in the USA from 2000 to 2010, from 2.4 trillion to 1.65 trillion. Then from 2010 to 2018 it climbed to 1.8 trillion. from 2010 to 2018 the total constant dollar amount grew but manufacturing share of GDP declined because the other sectors are growing faster. If the service sector grows 3% a year but manufacturing grows at 2% a year, over the years the percentage of GDP going to manufacturing is in decline.
The second chart you shared shows exports in manufactured goods have increased. Exported goods are not the only goods manufactured though so that data is incomplete without the dollar amount of total US manufacturing. Also, that chart is not labeled in constant dollars. Inflation was 82% during the 1995 to 2025 period.
Value Added by Industry: Manufacturing as a Percentage of GDP There are lots of ways to parse data, I still prefer the percentage of the USA economy that creates GDP. With manufacturing getting less share, services and government are getting more. That is the problem Trump is trying to address. If the USA can consistently get better trade deals, we can manufacture more here. The problem though is how he measures fair trade and whether other nations will retaliate.

 

[Job 33:6]

Thanks for sharing the graphs. The first graph shows manufacturing declines in the USA from 2000 to 2010, from 2.4 trillion to 1.65 trillion. Then from 2010 to 2018 it climbed to 1.8 trillion. from 2010 to 2018 the total constant dollar amount grew but manufacturing share of GDP declined because the other sectors are growing faster. If the service sector grows 3% a year but manufacturing grows at 2% a year, over the years the percentage of GDP going to manufacturing is in decline.
The second chart you shared shows exports in manufactured goods have increased. Exported goods are not the only goods manufactured though so that data is incomplete without the dollar amount of total US manufacturing. Also, that chart is not labeled in constant dollars. Inflation was 82% during the 1995 to 2025 period.
Value Added by Industry: Manufacturing as a Percentage of GDP There are lots of ways to parse data, I still prefer the percentage of the USA economy that creates GDP. With manufacturing getting less share, services and government are getting more. That is the problem Trump is trying to address. If the USA can consistently get better trade deals, we can manufacture more here. The problem though is how he measures fair trade and whether other nations will retaliate.

Well we did have the 2008 recession.

Growth of services at 3% isn't an inherently bad thing, even if it outpaces manufacturing.

There's an assumption built in here that fewer manufacturing jobs is a bad thing or if it makes up less of GDP it's a bad thing. Even if overall manufacturing, not just exports but also domestic manufacturing has been increasing over time.

In terms of overall manufacturing output, real manufacturing output has increased by about 60 percent since the late 1980s. However, during the same period, manufacturing employment dropped by 30 percent, indicating significant productivity gains.

Is U.S. Manufacturing Showing Signs of Growth?

From the 1980s and on, the U.S. manufacturing sector has been in decline. But, recently, Is it showing signs of growth?

progressless.org

"The most obvious question in thinking about the decline of U.S. manufacturing employment is: are we just making less stuff? But, the answer is no. Real manufacturing output has increased by about 60 percent since the late-1980s. Over that same time period, manufacturing employment dropped 30 percent.

How is this inversion possible? Basically, U.S. manufacturers are making more output with fewer workers. According to a paper by Martin Bailey and Barry Bosworth, since the 1980s, labor productivity in manufacturing — a measure of output per hour worked — grew 50 percent faster than labor productivity in other sectors. Overall, manufacturing productivity has more than doubled since the late-1980s, but output only grew by the aforementioned 60 percent. With productivity outpacing output, fewer workers were needed."

Aside from a drop in employment due to automation, I don't think you'll find a single statistic indicating any sort of decline in manufacturing in the US. Rather, you'll only find statistics indicating that it makes up a smaller portion of GDP because we have other things to spend money on, like healthcare.

Here is another article:

https://www.wsj.com/opinion/the-biden-trump-economy-of-nostalgia-trade-goods-services-china-eu-tariffs-85adda3e

From 1980 to 2017, U.S. steel output increased by 8%, despite a significant reduction in the workforce, highlighting advancements in productivity within the manufacturing sector.

It's not clear how Trump intends to bring manufacturing back to America. Unless he means to just bring back more robots. Which, to be fair, those robots still need technicians (even if I'm fewer number) to operate them. But it's unlikely that we would ever see something like the 1900s industrial revolution ever again.

And with AI on the way, it's likely that we will continue to see these workforce adjustments to more services needs rather than employment in sectors of manufacturing. More tech jobs to develop and advance IT and AI are more likely to continue growing and outpacing manufacturing.

 

[Job 33:6]

Nations and their GDP of manufacturing for reference:

United States~11%Balanced but service-heavy

United Kingdom~9–10%Finance, services, post-industrial economy

Australia~6–7%Strong in mining, services, tourism

Canada~10%Natural resources and services dominate

France~10%Significant public sector and services

Greece~9%Tourism, shipping, and services

New Zealand~10%Agriculture, services, tourism

Ireland~11% (but misleading)Many tech/pharma exports counted as manufacturing, but real domestic base is small

Germany~19–21%EU’s industrial engine

Italy~15–16%Strong in fashion, machinery, autos

Spain~12–13%Balanced with services and tourism

Netherlands~13–15%High-tech agri/food manufacturing

Norway Manufacturing % of GDP: ~7-8%

Switzerland Manufacturing % of GDP: ~10%

Luxembourg Manufacturing % of GDP: ~6-7%

It's not as though the US is at some catastrophicly low percentage of GDP of manufacturing. It's about what we might expect from an advanced nation.

Maybe Trump's slogan should be "make America robotic again" because that's what the future of manufacturing is. And jobs will be in tech and robot maintenance.

 

[Malleeboy]

Has anyone got a clear answer to what these are about achieving, as that impacts whether they will be successful.

1) Punitive against countries with tariffs against USA
2) Bring back manufacturing to USA
3) Rebalance balance of trade between US and other countries
4) Create instability to drive down interest rates to help with US debt (I have heard this one but strongly doubt it)
5) Trump respects Batman, and wanted to impact the Penguins minions

 

[Godsunworthyservant]

The USA by the way is in violation of the World Trade Organization rules. The U.S. basically set up the trade agreements and they were signed off on. Trump blew all that up.

Good point, Richard.

We should be concerned. That being said, I thought I would make a list of the many failures he has left behind including leaving hard working people and businesses in the dust. I don't feel good about making this list, I never knew there were so many, however, some must face the truth, he is not what you think.

Trump Taj Mahal
Trump Plaza Hotel
Trump Casinos Resorts
Trump University:
Trump Shuttle
Trump Vodka:
Trump Mortgage:
Trump Steaks
Trump MagazineTrump: The Game
Trump Castle
Trump Marina
Trump Tower Tampa
Go Trump
Trump bottled water
Trump fragrances
Trump Network
Etc.

You left out the Donald J. Trump Foundation. He has always been a better self promoter than a business man.

 

[Job 33:6]

Has anyone got a clear answer to what these are about achieving, as that impacts whether they will be successful.

1) Punitive against countries with tariffs against USA
2) Bring back manufacturing to USA
3) Rebalance balance of trade between US and other countries
4) Create instability to drive down interest rates to help with US debt (I have heard this one but strongly doubt it)
5) Trump respects Batman, and wanted to impact the Penguins minions

For number 4, the only thing that will fix the US debt issue will be (if it happens at all) spending cuts to Medicaid, Medicare, social security, and the DoD. And the GOP is pushing for an increase in spending of 100 billion dollars for the DoD, so that's already out of the picture for now. So unless doge can save us by finding trillions of dollars in fraud, we should probably brace for impact of healthcare benefit cuts.

House unveils budget plan with $100B boost for defense - Breaking Defense

Unlike the Senate — which opted for a two-bill strategy that starts with approving additional funds for defense, border security and energy — the House is pursuing what Trump has called “one beautiful bill” that would also raise the debt limit, and include tax cuts and government spending cuts.

breakingdefense.com

So much for being "deficit hawks".

 

[mindlight]

Will Trump Negotiate Tariffs? White House Claims Over 50 Countries Want To Talk

Personally, I'm confused by this whole Tariff situation. (I can't even remember if it is spelled with two r's or one...) I'm wondering if you think it is possible that it isn't just the act of a "mad man", but a strategy to reduce tariffs across the board. Could this actually work and be beneficial to the U.S.?

No this is an example of ideology trumping economic good sense. A good analogy here would be the Liz Truss experience in the UK. She only lasted a few weeks by the way.

Coming into this Trump administration, America had friends, had never been richer, and was running surpluses with countries like the Netherlands and the UK, who fought alongside the US in its wars - yet these countries have tariffs on them now. Its deficits in trade and government spending were features of a broken political system and domestic greed and not the fault of foreigners or immigrants for that matter. But it is easier to blame foreigners for one's faults, isn't it? America could ease most of its domestic struggles by a simple redistribution of wealth from the richest Americans to the poorest and by balancing its budget.

The effect of tariffs, thus far, is a collapse in trust, a collapse in US trading possibilities and a loss of American savings. There may be some increase in American manufacturing as a result, but the overall effect will be a negative one. American supply chains are global and the pain of changing this will take decades not years to accomplish. American allies are already forming alternate strategies that do not involve the USA and are making overtures to the Chinese. Canadian supermarkets have simply removed US products from their shelves and websites.

But in answer to your question - who will these tariffs work for? The EU is forming a stronger sense of identity and a more coherent strategy now, the Chinese have learnt an important lesson about the world markets and will seek to make up the difference across the rest of the world. But the USA will lose money, be less secure, will become more inward, corrupt, and less efficient and is now internationally more isolated than any time since WW2.

 

[Richard T]

Could it be that Trump is a genius? Is it possible that he set tariffs on all nations only as a disguise to raise tariffs on China? Of course he could have done that directly, but if he did it to deceive them, they walked into a trap by raising their tariffs on the USA. Now Trump has lifted much of the tariffs for other nations and China is left out in the cold. So in the end Trump gets what he wanted, if this was the original intention. This is one way that Trump's tariffs would work. Raise on China in a manner that does not single them out, so they can't say it is discriminatory.

I will say though that if the USA and China have almost no trade, then it increases the liklihood that they will make a move on Taiwan. Why? Because there is less to lose since they already have no trade with the USA. It is interesting too how interest rates were climbing the last couple of days. Speculation is that foreigners were cashing in. This is exactly what would precede a takeover. This is because if China does make a move on Taiwan, those assets will be frozen and maybe even confiscated. Russia lost quite a bit of overseas money that way.

 

[iarwain]

I don't think anyone can say for certain what the results of the tariffs are going to be, until we see what some of these deals that we are negotiating with other countries are going to look like.

I take it as a good sign that other countries are lining up to negotiate though.