Among the many purposes of tariffs, the biggest focus was China. For decades, China has profited off selling to America, stealing manufacturing jobs and absorbing American wealth into their economy. In turn, it has aided China into becoming an ever-growing threat economically. President Trump's tariffs aim to not only bring American manufacturing back, but also to stop the Chinese from progressing further.
So far, the tariffs have not had the doom and gloom result most people predicted. Instead, it has brought countries to the table to make historic deals that will help the United States shrink massive trade deficits. The deals have not only brought in foreign investments, but forces corporations to look inward and invest here at home.
As the economy prepares for liftoff under Trump's Big, Beautiful Bill, that puts China in a peculiar spot. Economist Michael Busler says this is bad news for the Chinese.
"A large segment of their economy, about ten percent, is dependent on selling goods they make in China here in the United States," he says.
China's economy very much depends on the United States. Thanks to weak tariff policies in the past, the Chinese have opened up a trade deficit of over $200 billion, profiting vastly off American outsourcing. But if America begins producing the goods they would sell here, they will then struggle to find a buyer.
But you cannot just dump money into the manufacturing sector and expect results. It takes time, skilled minds, and most importantly, strategy.
"If we can set up our manufacturing to be capital intensive, with more equipment, rather than labor intensive, China will lose their advantage...because they have the low-cost labor. We will be able to meet prices, and our manufacturing sector will grow," says Busler.
Let's say tariffs do cause a bit of inflation, as some economists have feared. There is a way to off-setting that. Trump, as one of his promises, vowed to unleash American energy. Supplying more energy will bring down energy prices, which will be more desirable to manufacturers.
Again, the goal has always been to slow the Chinese train down. After all, they have always had a disdain for the U.S., and a desire to break down the country as a whole. This effort, forcing China to make a deal or lose out on billions, is the key to stopping the train.
"This will severely limit China's ability to grow and expand in the future," Busler says.
He adds that this stops the American wealth from flowing into China, keeping it here in the states.
Regardless, the Trump manufacturing boom has the wheels in motion. It could not only bring American dominance back, but it might also keep our biggest adversary in a box.
Photo: AFP