These blanket tariffs are less about protecting/encouraging domestic manufacturing and more about renegotiating trade. At this current framing ("reciprocal tariffs") there is an implication that they are short term. The negotiations with Canada and Mexico demonstrate a tic-for-tat game theory in effect.
Without introducing the tariffs as a long term position businesses will be less inclined to do the capital expenditure to manufacture in the US, even for businesses within the margin (mostly manufacturing with high energy inputs and low supply chain requirements) where it would be economical.
While the framing has been reciprocal tariffs, the WH has published the formula and it’s essentially based on reciprocal trade surpluses, not tariffs. If one country sells more to the US than the US sells back then that’s seen as bad. Even if the other country has no tariff.
Like I hope you’re right, but what are you basing this on?
Just based on the words that Trump actually says and writes, I find it difficult to come to any conclusion other than Trump strongly believes that trade imbalances are unfair, that tariffs will reshore manufacturing, and that reshoring manufacturing will make America “wealthier.”
But if Trump is bluffing, it’s not clear there’s anything these other countries could give that would satisfy Trump. Vietnam could remove all tariffs against the US and in all likelihood not even make a dent in their trade surplus. It’s very hard for a small, developing country like Vietnam to import lots of stuff from a rich, expensive country like the US. Many of the countries whacked with massive tariffs by the administration already have very open trade policies with the US. What is there to negotiate?
Without introducing the tariffs as a long term position businesses will be less inclined to do the capital expenditure to manufacture in the US, even for businesses within the margin (mostly manufacturing with high energy inputs and low supply chain requirements) where it would be economical.