Here’s Why Tariffs Won’t Bring Back Manufacturing

Tariffs are being pitched as a magic bullet to revive American manufacturing, pushing out foreign competitors to bring red, white, and blue factories humming back to life. It sounds great: tax imports to bring companies back to the States, and generate a flood of revenue in the process as jobs flood back to the heartland. But in reality, prices will rise, demand will drop, and foreign companies will just sell elsewhere. 

Tariffs incentivize other countries to disengage economically, find new trading partners, and de-dollarize. Meanwhile, the higher prices they charge for goods will be passed onto consumers. Higher prices will inevitably decrease demand, and tariff revenues along with it. Despite what they say, Americans who are used to cheap foreign goods won’t want to pay the “Made in America” premium. 

As Peter Schiff said on his podcast earlier in May about Trump’s “Liberation day:”:

“…all he’s going to liberate Americans from is their access to low-cost consumer goods.”