The Massive Task Of Returning America To Self-Sufficiency
For over 50 years, America has moved its production overseas. It’s been the easy answer to many of our nation’s most pressing issues.
Are you concerned about the environment? Are you worried about clean water, clean air, and the many pollutants associated with traditional manufacturing? Move production offshore. It’s the easy solution.
Are you worried about workers’ benefits, retirement plans, pensions, and, yes, even Social Security? There is a built-in labor force outside the United States.
Does it look like a slowing economy, or is inflation too high? Ride the wave of low-priced goods made in low-cost jurisdictions.
These trends and many others were more than a side benefit of offshore production; they became the foundation of our current economy.
America Embraces Offshore Production
For the country’s leaders, trade with low-cost providers became the easy and expedient method of maximizing growth and profits. Companies like Nike and Apple, the first to move production to China, made their flagship products (running shoes and iPhones) overseas, presenting them with a significant price advantage over the competition — competition, incidentally, which either had to follow them overseas or lose market share.
The American consumer enjoyed these lower prices associated with their move and welcomed the newfound affordability of shopping at big-box retail stores.
Economists noted the “disinflation,” although they seldom credited that monetary condition to the overseas production capturing much of our retail sector.
Politicians could point to the enhanced economic growth that followed the offshore manufacturing movement. As James Carville said, “It’s the economy, stupid.” Unfortunately, it was the Chinese economy, not America’s.
All this went virtually unnoticed by many Americans. After all, price adjustments and the subsequent benefit to our wallets were instant, while the loss of jobs and aging US factories took decades. Yes, the “Rust Belt” suffered. Places like Pittsburgh, Pennsylvania, Garry, Indiana, and virtually all of West Virginia endured systemic unemployment and its associated crime and poverty. But most of us lived far away from these places, and besides, prices were cheap at Walmart and Target.
Fortunately, with the 2024 Election came the ascendance of a man who, at least intuitively, saw many of these issues. As President, Donald Trump has prioritized the country’s rebuilding as his paramount goal. With the slogan “Make America Great Again,” Trump acknowledged that the government had not addressed the need for economic reform. A bloated Government Bureaucracy ignored the challenge of off-shoring America’s manufacturing while allowing domestic factories and plants to atrophy.
Tariffs — A Way To Bring Home American Production
Trump chose “Tariffs” as his way of returning jobs and businesses to our shores. This move to increase tariffs is consistent with the country’s history and tradition. The first law passed after ratifying the US Constitution was the Tariff Act of 1790.
Designed by Treasury Secretary Alexander Hamilton and sponsored by future President James Madison, the new law had three goals: raise operating capital for the new Government, help pay off the country’s substantial debt, and, most importantly, protect America’s nascent industrial base for overseas competition, chiefly the British. These are undoubtedly the same three goals President Trump would like to achieve today.
However, unlike in 1790, we are not the newly emerging country we were 235 years later. As a country, we spent years promoting the very thing that Trump now seeks to change: offshore production. Cheap foreign goods became the central feature of our commerce. Millions are now employed by a vast industry that ships, packages, markets, and sells the inexpensive goods that line the country’s stores.
The retail sector is recognizing the risk of Trump's Tariffs. The nation’s largest retailer, Walmart, has already warned of the uncertainty associated with the new higher costs. We can be sure that the rest of the stores and shops that make up the retail sector are bracing for the impact that higher tariffs and the consequent higher prices will have on future earnings. Retail management is worried.
Reaction to the Trump Tariffs
And they’re not alone; the nation’s chief banker, Jerome Powell, Chairman of the Federal Reserve, said that he, too, is concerned about the return of inflation driven by higher Tariffs.. In a speech before the University of Chicago Booth School of Business on Friday, March 3, 2025, he said:
“If it turns into a series of things … If the increases [in Tariffs} are larger, that would matter, and what really does matter is what is happening with longer-term inflation expectations. How persistent are the inflationary effects?”
While Powell remains concerned about the inflationary aspects of Tariffs, the average consumer focuses on the same issue: rising prices. The result is that the latest University of Michigan consumer confidence survey had to be revised to the lowest level in four years. Consumers are becoming nervous, and that’s never a good sign for the sector of the economy that represents about two-thirds of our commerce.
http://www.sca.isr.umich.edu/
Finally, there is the issue of China. China remains our chief trading partner, and whether we like it or not, we continue to rely on its supply of goods and materials for a well-functioning economy. Remember the “Supply Chain” disruption we experienced during the COVID-19 Pandemic? That’s a small indication of how severe cutting trade ties with China would be.
Unfortunately, the recent reaction from China to Trump’s proposed 10% increase in US Tariffs indicates that Washington has some work to do in managing this most important relationship. Asked to respond to the Tariff increase, Chinese Foreign Ministry Spokesman Lin Jian replied:
“Exerting extreme pressure on China is the wrong target and the wrong calculation … If the US has other intentions and insists on a tariff war, trade war, or any other war, China will fight to the end. We advise the US to put away its bullying face and return to the right track of dialogue and cooperation as soon as possible.”
https://www.theguardian.com/world/2025/mar/06/china-donald-trump-us-tariffs-trade-war
The Trump Administration has a lot on its plate, including issues of international war and peace, monetary inflation, financial stability, and future prosperity. A version of these falls under the rubric of Tariffs and is summed up in Trump’s motto: Make America Great Again.
Each of these objectives requires addressing different constituents, from consumers to central bankers to American Multinationals and foreign governments and companies. Each has differing objectives, speaks in various idioms, and requires different concessions. This requires a multi-prong approach and will likely take months to achieve. Half a century cannot be undone with a one-and-done approach, as promoted by Treasury Secretary Scott Bessent.
The DOGE Re-Organization
Finally, we need to acknowledge that many of our fellow citizens are facing one of the most challenging transitions of their lives — the loss of a job. For anyone who has been through such a situation, you know how traumatic this can be. As this is written, more than 170,000 Americans are now out of work — displaced by the DOGE (the Department of Government Efficiency) re-organization of the Federal Government. Most of these are well-educated, highly motivated employees who lost their positions through no fault of their own. They are being laid off for chiefly budgetary reasons.
Hopefully, many private-sector employers will take this opportunity to reach out and offer them a position. I encourage many to start their own business; entrepreneurship can be most rewarding. There are many support systems in place to aid anyone starting a business. The Small Business Administration and SCORE, the Service Corps of Retired Executives, were helpful to me in starting my business.
This massive reorganization of the Federal Government presents us all with the opportunity to unite as a nation, support each other, and perhaps even regain the initial self-sufficiency that marked our nation’s founding.
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