by Spencer P. Morrison
Trump’s tariffs may sting short-term, but they’re a long-term play to reshore jobs, boost GDP, and rebuild America’s industrial might—if he stays the course.
The media circus surrounding President Trump’s tariff agenda has devolved into clown-like lunacy.
ABC News reports that “experts” believe tariffs will cause massive job losses in America’s dwindling manufacturing sector. They claim that “manufacturers will bear the brunt of these tariffs.” Why? Tariffs will cause significant disruptions” in supply chains, which will increase prices, reduce sales, and destroy jobs.
These complaints are shortsighted. Tariffs are a powerful tool that President Trump is using to reshore economic production from the Third World back to America. This will—almost by definition—increase America’s Gross Domestic Product (“GDP”) and create jobs in the long run.
Beyond the Horizon
At its core, this issue is all about time horizons. That is, are we looking at the impact of tariffs here and now, or next year, or ten years down the road? The impact of just about any policy will be different at different times and across different industries.
For example, pretend that President Trump said he was going to eliminate taxes entirely. The media would print articles claiming that tax cuts will destroy millions of jobs—high-paying, middle-class jobs in the accounting industry. They could also claim that America’s GDP would decrease by $250 billion overnight. Why? Because this is about how much it costs for Americans to do their taxes every year.
Of course, these claims would be absurd. We all know that eliminating taxes would grow the economy and create jobs—but not overnight, and not in every industry. This is how the media lies by telling the truth.
The same logic applies to President Trump’s tariffs. The media hates tariffs. Therefore, they only consider the impact of tariffs on a short time horizon and in particular industries. As a result, pundits can claim—and accurately claim—that tariffs will destroy jobs.
But this is not true in the long run. Economic logic and historical evidence prove that tariffs will increase GDP and create jobs. However, we need to be patient and remember that America does not belong to us; it belongs to our children, our grandchildren, and every generation that has come before or after us.
Trade Deficit & Displaced GDP & Jobs
Tariffs will increase our GDP by shifting economic production from the Third World back to America. Here’s how.
In 2024, America’s net trade deficit was $918 billion. This means that Americans consumed this much more than we produced. Of course, someone had to make these goods. In this case, mostly China, Mexico, Canada, and the European Union. Accordingly, the trade deficit literally represents the value of America’s displaced economic production—rather than build it in America, we buy it from foreign countries.
Reshoring the production that is currently reflected in the trade deficit will—by definition—increase America’s GDP by a commensurate amount.
The only way that this logical conclusion can be avoided is if America’s production will not rise to match our consumption. This will not be the case, because consumption—not production—is the economy’s limiting factor. Why?
First, this has historically been the case. For most of its history, America had extremely high tariffs, which largely prohibited imports. Nevertheless, both GDP and national consumption grew well above the global average until America embraced global “free trade” in the 1970s. In fact, America’s economic growth has never been slower since we abandoned tariffs and closed the gold window.
Second, industrial production is subject to increasing returns on investment. This means that the more we make of a product, the cheaper each unit of product becomes. The logic of increasing returns implies that at a certain level of consumption, the cost difference between American and Chinese goods would disappear. Paradoxically, part of the reason that Americans find Chinese production “cheap” is because we are not producing enough ourselves.
Third, Americans pay for the trade deficit by selling assets and promising debt. These financing options would remain open to Americans in a closed system, and therefore it is logical to assume that American consumers would continue to take full advantage of them. True, they may not get as much “bang for their buck,” but that is a short-term problem. Ultimately, Americans are happy to spend as much as possible, no matter where the production originates.
Fourth, America is nowhere near its full production potential. In reality, tens of millions of Americans are unemployed, and many hundreds of billions worth of formerly productive assets are currently idle. America certainly has the economic spare capacity to increase production to match consumption, provided that the economic incentives were in place—or perhaps more appropriately, the disincentives were removed.
Essentially, America has production capacity to spare, and it could quite easily be scaled up to meet our own needs. America survived as a largely self-sufficient country for nearly two centuries and could do so again.
Fifth, the desire to consume logically precedes the desire to produce—not vice versa. It is simply a truism that man makes because he wants. A hungry man will hunt, or fish, or farm. It is his desire to consume that drives his food production. It is not his love of reaping wheat or shucking corn that motivates his backbreaking labor. Work—production—is a means to an end. It is not the end itself.
Consumption drives production. In an open economic system—one where nations trade freely—it is possible to consume more than you produce. However, if the system were to close, we can deduce that production would rise to match consumption. Not vice versa.
This logic virtually guarantees that the trade deficit displaces America’s potential GDP: rather than build it, we buy it. Therefore, running a trade deficit must reduce GDP.
President Trump’s tariffs will reduce the trade deficit. In doing so, they will increase GDP by a corresponding amount, and reshore the jobs that have been lost to China and Friends.
President Trump must stay the course and impose tariffs that are aggressive enough to reshore America’s factories and revive the American Dream.
Spencer P. Morrison
Source: https://amgreatness.com/2025/03/03/trumps-tariffs-will-create-millions-of-jobs/
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