President Trump’s simultaneous trade wars with Canada, Mexico, China and the European Union amount to a huge economic and political gamble: that Americans will endure months or years of economic pain in return for the distant hope of re-industrializing the American heartland.
It is enormously risky. In recent days, Mr. Trump has acknowledged, despite all his confident campaign predictions that “we are going to boom like we have never boomed before,” that the United States may be headed into a recession, fueled by his economic agenda. But in public and private he has been arguing that “a little disturbance” in the economy and the markets is a small price to pay for bringing manufacturing jobs back to America.
His closest political partners are doubling down on the strategy. “President Trump’s economic policies are simple,” Vice President JD Vance wrote on social media on Monday. “If you invest in and create jobs in America, you’ll be rewarded. We’ll lower regulations and reduce taxes. But if you build outside of the United States, you’re on your own.”
The last time Mr. Trump tried something like this, during his first term, it was a failure. In 2018 he put 25 percent tariffs on steel and 10 percent tariffs on aluminum, maintaining that he was protecting America’s national security and that the tariffs would ultimately create more jobs in the United States. Prices jumped, and there was a temporary increase of about 5,000 jobs nationwide. During the pandemic, some of the tariffs were lifted, and today the industry employs roughly the number of Americans it did then.
More worrisome, though, were the raft of studies that followed showing that the country lost tens of thousands of jobs — upward of 75,000, by one study — in the industries that were dependent on steel and aluminum imports. The output per hour for American steel makers had also dropped, while productivity for manufacturing overall in the United States rose.
The experiment Mr. Trump is attempting now is far larger. And the retaliatory tariffs that are being imposed on U.S. manufacturers — with the Europeans aiming at Kentucky bourbon, as well as boats and Harley-Davidson motorcycles made in swing states like Michigan and Pennsylvania — are exquisitely designed to cause pain in places where Mr. Trump’s supporters will feel it the most.
