After five brutal months of unrestricted lawfare against the Trump Administration, it looks like the Supreme Court will finally weigh-in on tariffs.

On August 29, 2025, a Federal Circuit Court of Appeal decided that President Trump’s reciprocal tariffs were illegal.

Specifically, the Court ruled that the International Emergency Economic Powers Act does not authorize the President to impose tariffs of unlimited duration, on all goods from all countries. This is because tariffs are not mentioned in the Statute, and even if they were, the tariffs are not credibly related to a national emergency.

The Trump Administration is appealing. Solicitor General D. John Sauer states unequivocally that striking the tariffs “would expose our nation to trade retaliation without effective defences” and “thrust America back to the brink of economic catastrophe.”

President Trump himself hammered this point home on Truth Social, stating that without tariffs “our Country would be completely destroyed, and our military power would be instantly obliterated”.

President Trump is right.

Not has America’s economy been completely hollowed-out due to unrestricted “free" trade with adversaries like China, but America’s national security is jeopardized by reliance on foreign supply chains—this is a national emergency, and tariffs are the solution.

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Can the President Impose Tariffs?

Article 1, Section 8, Clause 1 of the Constitution explicitly grants Congress the power to “lay and collect Taxes, Duties, Imposts and Excises” and to “regulate Commerce with foreign Nations”. Strictly speaking, Congress has these powers—not the Executive.

However, Congress also has the authority to delegate powers to the Executive for specific purposes. This is typically done because everyone knows—even corrupt congressmen—that the Executive is both far more responsive and nimble than Congress, and carries out the duties on the ground. Accordingly, the Executive is often better suited to exercise certain congressional powers.

In that vein, Congress has delegated—authorized—the Executive significant powers over tariffs.

What Constitutes a National Emergency?

The current case deals with the International Emergency Economic Powers Act of 1977, This Act gives the President broad powers over commerce in cases of national emergency.

This is why President Trump declared fentanyl smuggling to be a national emergency before imposing the first round of tariffs under this authority. He has also stated that America’s reliance on foreign supply chains—particularly for military equipment—is a national security risk.

The legal questions swirling around this authority include whether fentanyl smuggling, or reliance on foreign supply chains, constitutes a national emergency. If so, whether broad-reaching “reciprocal” tariffs are a relevant and proportional remedy to the issue.

The American people seem to think so—this is why they elected President Trump in the first place.

Consider that over 50,000 Americans die every year from opioid overdoses—and a further 25,000 from other drugs smuggled over the borders—it seems to me that this indeed constitutes a national emergency. Consider that Hurricane Katrina—unequivocally a national emergency—killed 1,392 people.

In terms of the remedy, I don’t see how you could possibly attempt to solve this problem without tariffs—in particular by eradicating the de minimis exemption through which these drugs are smuggled.

The reality is that an estimated $1.4 billion worth of goods came in through the de minimis exemption in 2024—this includes a significant portion of the fentanyl. Why? Because these goods came in under the radar.

President Trump was right and justified in addressing the fentanyl crisis, and tariffs and eliminating the de minimis exemption are reasonable steps to take to address the crisis.

In any case, offshoring critical elements of America’s supply chain to rivals is insane and suicidal.

Consider that America imported $763 billion worth of advanced technology products in 2024, including a sizeable deficit in silicon computer chips. The modern world runs on computers. They are in everything from our most advanced aircraft to humble toasters.

America would shut down without computers—without imports.

Not only does America rely on foreign chips, America does not manufacture the photolithography machines required to print the chips. Those come from the Netherlands, are shipped to Taiwan, who sells the finished product to the U.S. The whole supply chain is offshored, leaving America profoundly vulnerable.

This is equivalent to America buying fighter jets from the USSR during the Cold War—anyone suggesting this would have been accused of being a Manchurian Candidate.

And yet, this is exactly what everyone from lefists, to libertarians, to milquetoast “conservatives” recommend for America.

The Perfect, Imperfect Solution

In a perfect world, Congress would take action and protect American industry from unfair foreign competition. But that’s not going to happen. Why? Congress is bought and sold by Wall Street, the CCP, and a litany of other special interest groups who profit handsomely on America’s industrial decline.

The ray of hope is that Congress has delegated significant authority to the Executive to impose tariffs and otherwise regulate foreign commerce.

President Trump was elected to fix these problems. It’s time the Courts respect the Will of the People and let President Trump govern.

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I’m glad to be back & publishing content regularly. Read more about I was censored during Covid-19 for speaking the truth, and why I moved the National Economics Editorial here.

President Trump blasted India with 50 percent tariffs. The full force of these tariffs will come into effect on August 27, 2025.

President Trump’s instincts are spot on: India is on the verge of becoming China 2.0.

Unfortunately, the tariffs will do little to stop this. Why?

Because India isn’t coming for our manufacturing. They’re coming for our technology sector—and they’ve been remarkably successful both at scooping up jobs, and flying under the radar.

Consider that America lost roughly 5 million jobs to China since 2001. During the same period, America lost up to 4 million technology jobs to India. Not only that, but India now has access to sensitive American technology and information. This is America’s silent national emergency.

If we are serious about reshoring American industry, then tariffs on Indian products won’t cut it. We should also tariff Indian services.

Made in Mumbai

India’s technology industry is bustling. In 2024, technology made up approximately 7 percent of India’s GDP. The industry employs 5.4 million people, and added 126,000 new jobs last year alone. Revenue was up 5.1 percent year-over-year.

Technology is transforming India—cities like Bangalore boast newly minted billionaires and skyscrapers. Meanwhile, technology employment in many major American cities, like Boston, is stagnating.

Bangalore is booming. Boston is becoming a bust. What’s going on?

One word: offshoring.

Increasingly, American companies are moving their production of digital services to India. Why? Because Indian labor is cheap. Consider that the average American technology worker earns $110,000 per year. Meanwhile, their Indian counterparts earn about $32,000—Indians work for one-third the price.

Why hire an American when you can hire an Indian to do the same job, for a fraction of the price?

Offshoring explains the rapid growth of India’s technology sector. Consider that 80 percent of India’s technology revenue comes from exports. This is a far higher fraction of export-reliant growth than we saw with China in 2001!

Interestingly, America's trade deficit in services with India was fairly small, just $3.2 billion. This gives the false impression offshoring is not a problem. However, this is not the case. In reality, the scale of offshoring is obscured by the fact that Indian services—which are largely “branch plants” of American technology companies—also service non-American markets.

Accordingly, America’s technology giants have the potential to earn large profits by offshoring production to India. Likewise, India’s government benefits from the tax revenue, and Indian people benefit from new jobs. But where do the American people factor into this equation? As usual, they don’t. This is yet another example of Wall Street screwing-over ordinary Americans.

The Price of a Rupee

As I explain my book Reshore: How Tariffs Will Bring Our Jobs Home & Revive the American Dream, offshoring hurts American workers in two main ways. First, it relocates American jobs abroad, causing unemployment. Second, it causes wage-stagnation in the economy at large. Third, it reallocates educational investment from the United States to India.

How many technology jobs have been lost to India? Although the exact number is impossible to calculate, we can estimate. A good starting point is to look at the number of Indian jobs supported by American money.

Remember, 5.4 million Indians work in the technology sector, and 80 percent of the revenue comes from exports—mostly purchased by the United States.

If we assume a one-to-one corollary between an Indian job and an American job, then we can guess that 4.3 million jobs have been displaced. In reality, this is probably too generous—Americans are more productive than their Indian counterparts. Either way, the number of lots jobs are in the millions.

This drives down wages for other workers. How? First, people who have lost their jobs due to offshoring compete with others for jobs. This increases the domestic labor supply, lowering the price of labor.

More importantly, it is quite easy to relocate services to India. This pits American workers in direct competition with workers in India—who are willing to do the same work for a fraction of the price. A globalized labor market is a race to the bottom, which is bad for American workers because they have the furthest to fall.

Lastly, there is a hidden cost to technology offshoring. Offshoring reduces the demand for skilled labor in America, and increases it in India. This creates the perverse incentive to invest in education abroad, while at the same time neglecting our own schools—it’s not only cheaper to hire Indians, it’s also cheaper to train them.

The proof is in the pudding. In 2004, 51,000 Americans graduated with computer science degrees, and 4,000 with degrees in software engineering. By 2024, these numbers had doubled to approximately 100,000 and 8,000 respectively. Not bad.

However, let’s compare this to India—which has a much smaller technology industry, and which is only entirely dependent on American investment. In 2004, 80,000 Indian students graduated with computer science degrees, and 5,000 with degrees in software engineering. By 2024, these numbers had tripled to over 250,000 and 15,000 respectively.

India now trains more people for the technology industry, and the number of graduates is increasing faster. This difference is partly explained by the fact that American technology companies demand educated Indians, rather than educated Americans. This is why major American technology companies pour money into Indian universities.

The United States has been pillaged for decades. The inability to manufacture basic goods is an existential threat to the Nation. The same is increasingly true of technology services: Americans are taking the back seat in education, employment, and innovation.

President Trump’s instincts on tariffs area correct, but the reality is that tariffs are akin to fighting last year’s war with India. We need to tariff offshored services, or tax the wages paid to foreigners so that there is no cost advantage to hiring Indians (or anyone else). If not, America will depend on foreigners for goods and services—and there will be nothing left at home.

Not only is it the biggest trade deal in history—it unequivocally puts America first.

In fact, when asked what concessions America gave, EU President Ursula Von Der Leyen could not come up with a single item:

Europeans went ballistic. They described this as the death-knell for the EU. Europe has been described as a collection of American vassal states (which is fundamentally accurate).

Even America’s liberals went nuts—the deal was too good for America. They argued that it would undermine America’s political relationship with Europe. We need to deal fairly with our allies to promote mutual prosperity.

Too good?

How can a trade deal be too good? The point of negotiating is to get the best possible deal that you can. If you have leverage, you apply it—ruthlessly. President Trump has a fiduciary obligation to uphold the American people’s best interests.

Assuming the deal is as advertised (no one should hold their breath), then this is a very good deal for America. To summarize:

1. EU goods taxed at 15%, while US goods taxed at 0% (some industries are subject to different tax regimes);

2. EU to buy $750 billion worth of American energy over 3 years;

3. EU to invest $600 billion in America (unclear how this will be done, apparently Japan’s investment is being done by way of loans);

4. EU to buy more (unspecified amount) of US military equipment.

The tariffs are asymmetrically weighted in America’s favor. This alone is a big win, and should help to redress the balance of trade. Remember, American industry is significantly more productive than European industry (perhaps 40% more productive on average).

According to classical economics, this should have resulted in America having a trade in goods surplus with Europe. This is not the case because of asymmetrical trade barriers. These have been somewhat redressed (although non-monetary barriers will remain a problem).

Perhaps more importantly, the EU has committed to buying a comical amount of US energy products—$250 billion per year.

To put this in context, Europe imports ~$400 billion per year right now (about $80 billion is from the US). In order to comply with the terms of this deal, Europe will have to reconfigure its entire supply chain, and make itself highly dependent on American energy.

This benefits America economically and politically—more leverage down the road.

If the EU wishes to maintain diversified supply, then it will need to pay significantly more unit to America—perhaps $250/bbl. Either way, this is a massive win for America.

In fact, this alone essentially wipes out the trade deficit.

Assuming does not get lost in the EU bureaucracy (which is likely), then President Trump deserves congratulations for squeezing the Europeans, who have been piggybacking on America for decades. Time to pay the piper.

Just about every influencer, economist, and politician predicted President Trump’s tariffs would cause inflation.

Not just inflation—a tsunami of inflation that would drown consumers in a rising tide of prices.

Yet here we are enjoying a beautiful summer—and we can all still afford our lawn chairs & beach balls. Where’s the inflation?

I don’t see it. Do you? If anything, inflation’s decreased this year, relative to the same period last year. Why?

Because tariffs aren’t necessarily inflationary—probably not in the short run, and definitely not in the long run. Here’s why.

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1. America is the World’s Market—This Gives Us Price Leverage

America is the biggest consumer market in the world. In 2024, Americans spent >$19 trillion on consumer goods. Over $4 trillion of this was on imports.

This means, in nominal terms, that Americans bought more than just about any other country on earth produced. America is the world’s forum, the bazaar, the emporium, the supermarket—the shopping mall.

And just like how the biggest store in town can pressure suppliers to cut costs, America’s buying power gives us leverage over prices—leverage that can be translated into profits via tariffs.

Essentially, if foreign producers want to sell their goods to American consumers—which they do—then they must pay the tariffs. However, if they raise prices too high, they will simply be outcompeted by products from countries with lower tariffs, or American producers who pay zero tariffs.

As such, there is tremendous pressure on foreign producers—particularly foreign producers in relatively high tariff, low cost countries—to eat the tariffs. This has been happening. According to recent reports, about two-thirds of manufacturers expect that foreign suppliers will eat the tariffs, rather than passing increases onto American consumers.

2. Tariffs are an Avoidable Tax—Just Buy American

Perhaps this goes without saying, but tariffs are a tax on imports. If you buy American, you do not pay tariffs.

Let’s put this into perspective: America’s GDP was nearly $30 trillion in 2024. Meanwhile, America imported $4 trillion worth of products. This means that tariffs will be applied to no more than 13% of the economy. This is unlikely to cause the sort of broad-based inflationary pressure that chicken little economists predict.

On top of that, people can simply avoid the tariffs altogether by buying American. Not only does this help to lower prices by forcing foreign competitors to lower their costs (so they can preserve price parity with American goods), but it also opens up opportunities for American producers to increase production volume.

When dealing with manufactured goods, increased volume actually lowers the per unit cost of goods (this is called the law of increasing returns). Essentially, American industry can lower costs by increasing volume, party balancing out any increases caused by the tariffs.

3. Economic History Proves Tariffs Do Not Cause Long-Run Inflation

It’s important to remember that tariffs are not new. America’s Founding Fathers used tariffs to great effect, and America prospered under high tariffs for well over a century.

In fact, America had the highest average tariff rate in the Nineteenth Century—it’s not a coincidence this is when the US industrialized. By 1945 America was the world’s factory, making half of all manufactured goods. During this time—while tariffs were high—the cost of living decreased significantly.

This continued into the 1900s. As you can see in the below graph, the fraction of spending on wants increased for the median American household until the 1980s, and then began decreasing.

What changed? America began the “free trade” experiment—economic globalism packaged with a libertarian-sounding name.

The cost of living decreased steadily while America had protective tariffs, and has ballooned under free trade. The data is what it is. Economists will simply have to accept it.

4. Tariffs Can Asset Inflation

Despite allegedly caring about consumer prices, the media conveniently forget that economic globalism causes inflation of a different kind.

Remember, America imports far more than it exports. This results in a trade deficit which we need to pay for. How? By selling assets and debts. As a result, the trade deficit directly contributes to the increase in prices—inflation—of American assets and debts.

For example, in 2024 foreigners bought an estimated $42 billion of residential real estate, $8 billion of agricultural land, and $12 billion commercial real estate.

This drives up real estate prices, locking our own young people out of the real estate market—denying them their share of the American Dream.

America also trades debt. This is sort of like buying groceries on our credit cards, except is occurring at the national level. For example, foreigners own some $8.67 trillion of U.S. Treasury securities, accounting for 24 percent of the public debt. Further, America’s corporate and household debt has ballooned since 1973 to the highest levels since World War 2.

Debt is especially dangerous because we have to repay the principle and we pay interest. This inflates the cost of buying foreign products in a way that most economists fail to appreciate. Consider that America became a debtor nation in 2006—for the first time since the Great Depression. As a result, we are now paying over $150 billion in interest every year to foreign entities for the privilege of buying the products we should be building.

As you can see, tariffs will not increase the costs of goods in the long run. If anything, the price of goods should begin a slow and steady decline—exactly what happened in America for almost 2 centuries under high tariffs.

Additionally, I hope you see that the whole question is framed disingenuously: the current system creates inflation—it’s just harder to see because it’s hidden in asset prices & the debt burden.

Tariffs can deflate this bubble over time, helping us to avoid economic catastrophe.

Who Cares if Tariffs Cause Inflation Anyways?

Although it’s clear that tariffs are not likely to increase prices—especially in the long run—we need to remember that pursuing “cheap goods” is not the goal. This is the point that I make in my book, Reshore: How Tariffs Will Bring Our Jobs Home & Revive the American Dream, America is not just an economy.

America is a nation. It is a people bound together by shared blood and tradition, language and culture. Even if tariffs are not economically efficient, they serve other purposes. For example, tariffs are necessary to ensure America’s economy remains self-sufficient. If not, America’s national security is gravely threatened.

We need to think about tariffs not just from the perspective of economics, but of politics. Is it truly worth surrendering our economic and political independence, in exchange for “cheap” Chinese crap?

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On Tuesday, President Trump told reporters he plans to raise tariffs on copper to 50 percent. Copper futures surged by 17 percent shortly afterwards—the largest intraday gain since at least 1988.

Many will make—or lose—a small fortune on Wall Steet in the coming days and weeks. No doubt, the winners will gas-up the Presidency for protecting America’s economy: tariffs are good! Meanwhile, the losers will accuse him of economic illiteracy: tariffs are bad! Which is it? Are tariffs good or bad?

The answer: both.

Tariffs are good when they promote economic growth or economic self-sufficiency. If not, then tariffs are just another useless tax.

Tariffs on copper accomplishes neither of these objectives. In fact, tariffs on copper—like tariffs on any other raw or exotic material—hurts the economy and makes America less safe in the long run. That is not to say that maintaining supplies of copper is not important—it is—but tariffs are not the most efficient way to solve this problem.

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On Hamilton’s American System

Alexander Hamilton published his Report on Manufactures in 1791. In the Report, Hamilton explained how protective tariffs should be used to protect American manufacturing from foreign, at the time European, competition. Hamilton believe this would be good for two reasons.

First, it was a question of national security. How could the United States defend her newfound freedom if she could not manufacture firearms or steel? Remember, the French provided the Colonies with over 80,000 firearms, without which the Revolution would have failed. For Hamilton, manufacturing was an existential necessity.

Second, Hamilton believed that a robust manufacturing industry was the key to unlocking wealth. This belief was well-founded. Remember, the Americans had lived under British rule for nearly two centuries. During this period, they observed how Great Britain enriched herself at the Colonies’ expense through a trade pattern called mercantilism, wherein Great Britain imported raw materials and exported manufactured goods.

Mercantilism enriched Great Britain at America’s expense. During the Eighteenth Century, Britain’s trade surplus with the Colonies grew from £67,000 (1721-30) to £739,000 (1761-70). Colonial demand fueled British industry and spurred the Industrial Revolution. Between 1700 and 1773, Colonial demand accounted for 72 percent of Great Britain’s manufacturing growth. During this time, manufactured goods rose from 4 percent to 27 percent of British exports, and by 1770 nearly 1 in 5 Britons worked in manufacturing.

As I explain in my book Reshore, this asymmetrical trade made Great Britain rich and set the stage for the Industrial Revolution and Victorian Age. Hamilton was eager to copy Britain’s strategy.

Thankfully, Hamilton’s recommendations were largely followed. Over the next century and a half, the United States prospered under the ‘American System’, which was essentially a less extractive version of British mercantilism. In fact, America had the highest average tariff rates in the world throughout the Nineteenth Century.

It was during this period that America industrialized and became the most prosperous country on earth.

Centuries of economic wisdom—learned through extensive trial and error—was thrown out at the end of the Second World War, and many of the last remnants of the American System were dismantled by 1973. Since then, America has run a large, chronic trade deficit. Well over 60,000 factories and 5 million manufacturing jobs were lost since 2001 alone.

This brings us to the ultimate question: what is the point of President Trump’s tariffs?

In my view, the calculus has not changed: it is still in America’s best interests to be economically self-sufficient; and it is still in America’s best interests to prioritize value-added economic production, over the extraction of raw materials. Basically, it’s better to be a country than a colony. But tariffs on copper accomplish neither of these objectives.

Banana Tariffs are for Banana Republics

Tariffs are good when they promote economic growth or economic self-sufficiency. If not, then they’re just another pointless tax. Does a 50 percent tariff on copper accomplish either goal?

The copper tariff will probably not grow the economy. In fact, it will probably hurt the very industries that the American System is supposed to support.

In 2024 America produced approximately 1.1 million metric tons of copper. Meanwhile, America consumed approximately 1.8 to 2 million metric tons. The gap—over 40 percent of copper consumption—was filled with imports. A 50 percent tariff would raise the price of copper.

To be fair, this also happens when tariffs are raised on the cost of manufactured goods. However, manufacturers are usually able to scale-up production relatively quickly. This is because the typical manufacturer operates at about 60 percent capacity, meaning there’s room for expansion. Also, manufacturing is subject to the law of increasing returns, meaning that each additional unit of production lowers the average production cost.

This is not true for copper production.

The reality is that mining operations take years—sometimes decades—to start production. Moreover, mines are typically unable to produce more ore without major capital investments. On top of this, the U.S. government imposes so many environmental regulations on mining (and recycling) operations that the domestic supply is almost inelastic.

And—I’ve saved the most obvious for last—tariffs cannot create economically exploitable copper deposits ex nihilo. Copper mines are where they are. Although the United States is blessed with ample deposits, these cannot be exploited due to the government’s own fiat. So which is it? Why raise tariffs without lifting the regulations?

In any case, if America cannot increase the supply to meet demand, the price of copper will increase. This will hurt American manufacturers—especially those producing electronics and advanced technology. As a result, the copper tariff will hurt the very industries that tariffs are supposed to protect.

Worse still, American demand for imported copper will likely decrease. This may lower the global price of copper (once the heady day-traders have had their fill). This could, inadvertently, help Chinese manufacturers by reducing raw materials costs. After all, the cost of raw materials is the single largest input cost for manufacturing.

As for national security, there is no question that import-dependency on copper is a valid national security concern. However, tariffs are not the most efficient way of securing access to copper. In fact, they may be the least efficient way to solve the problem. Here are three better ways.

First, eliminate the regulations that prevent Americans from building and expanding copper mines in the first place. Do the same for recycling facilities, as up to 40 percent of America’s copper supply is from recycled copper (Basically, we send garbage electronics abroad, they are recycled, and then we buy the copper again).

This alone would probably solve the problem. Not only that, it’d be free & it would lower the cost of copper.

Second, we could expand the scope of the National Defense Stockpile (“NDS”). The NDS was founded in 1939. Its purpose was to ensure the U.S. had a critical stockpile of resources in case of conflict. Unfortunately, the stockpile is utterly gutted, and it’s been that way for decades.

President Trump could quite easily direct the NDS to begin buying copper—and other rare or critical raw materials—on the open market when prices are low, store them, and then sell them at or below cost to American producers when prices rise.

Just to be clear, this sort of program was administered successfully for nearly a century in Canada under the Canada Wheat Board (“CWB”)—and it had real and tangible economic benefits.

The CWB was created in 1935 to purchase wheat from farmers in Western Canada. This wheat was then stored and sold when wheat prices were highest on international markets. Further, the CWB’s economy of scale allowed it to tilt prices in Canada’s favor. Between 1935 and 2012 wheat sold by the CWB averaged 4 - 10% above market returns. On top of this, Canadian farmers saved 1 - 2% in financing costs, because the CWB guaranteed at least 75% ROI.

If it is possible for a government agency to beat the market by ~5% for 77 years, then I suspect it would also be possible for the DOD to undercut the market by a similar amount. That is, the NDS could use tariff revenue buy raw materials on international markets when the prices are low, or use its tremendous buying power to acquire discounted raw materials from developing countries.

This would have two benefits. First, supplying the NDS should be a national security priority—America needs adequate stockpiles of supplies in times of war. Second, once the stockpiles are full, the NDS could sell the raw materials at the discounted rates—functioning like the CWB in reverse. This would provide American industry with below-market raw material inputs, evening the playing field with China, and lowering the cost of living for the American people.

And before you accuse me of being a communist, that I am simply proposing to take full advantage of a program that has already been around for over 80 years. Also, remember that the late Milton Friedman proposed something similar to this in his libertarian manifesto Free to Choose. Why? Because there is simply no way for the “free market” to address the national security issues caused by global supply chains without reshoring production or stockpiling raw materials.

Given that we need to address this issue anyways, we may as well wring out some added benefits.

Third, we could simply use some of the tariff revenues to subsidize copper mines, to guarantee a secure level of output. This would be far cheaper than raising copper prices for the entire economy. President Trump has shown that he is not afraid to make these sorts of investments with his “Golden Share” in U.S. Steel—so why shy away from doing the same with copper?

Given the above logic, we are left with no choice but to conclude that the proposed 50 percent copper tariff is just another tax-grab—just like the tariffs on bananas and coffee.

President Trump needs to focus his attention on imposing tariffs that will create jobs and boost GDP. Tariffs on raw materials do precisely the opposite.

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The Trump Administration has extended the global trade negotiation deadline to August 1, 2025:

So far, less than a handful of countries have been able to work out interim deals, including the United Kingdom, Vietnam, and (ironically) China.

A few others, like India, have offered zero-for-zero tariffs with the United States—free trade, at least on paper.

President Trump’s team has so far avoided making any “free trade” deals. They are right to be skeptical. Why?

Real global free trade—much like real communism—has never been tried! And this is not for lack of trying. It’s because it is impossible.

In reality, different countries are different; they have different levels of economic development, different laws, and different business cultures. These differences add up to make international free trade practically impossible.

Rather than hunting unicorns on behalf of doe-eyed economists, President Trump should pursue deals that put America first. After all, if the board is tilted, we may as well tilt it in our favor.

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hunting unicorns

Different countries are different. And not just different in nominal ways—different in real, tangible ways that prevent seamless economic integration.

The most obvious example of this are differences in the price of labor. In 2024, the median annual income in America is about $44,000. Meanwhile, the median annual income in India is just $2,400. This means that the median American earns over 18 times as much as the median Indian.

This is a huge difference, especially since the cost of labor is often the largest input cost for making products. In fact, labor costs account for approximately 30-35% of the cost of American manufacturing. Labor costs are even higher in most service industries. This gives India a tremendous cost advantage over America—similar to the cost advantage that was enjoyed by China in 2001, when China joined the World Trade Organization.

Consider what would happen if the United States and India truly embraced free trade. It seems likely that American companies would offshore as much protection as possible to India to take advantage of cheap Indian labor. Why pay Americans $44,000 when they can pay Indians $2,400?

In fact, I can guarantee this will happen. Why? Because the exact same thing happened with China 25 years ago.

Deja vu.

In 2001 the average annual wage in America was $30,846 while the average annual wage in China was just $1,127—the average American earned 27x more than the average Chinese. What happened when American workers competed with Chinese workers? American factories moved to China and our wages stagnated.

The pace of offshoring was harrowing. Since 2001 over 60,000 factories moved abroad, killing over 5 million manufacturing jobs. This has decimated America’s industrial capacity and hollowed-out local communities. And no, robots and automation are not to blame, in case you were curious.

In fact, the process has been going on even earlier than 2001. America has run global trade deficits every year since 1974. The cumulative value of these deficits is $25 trillion, after adjusting for inflation. This has decoupled wages for American workers from their productivity—even though workers produce more value, they aren’t paid for it. Why? Because the wages are suppressed by competition with cheap foreign labor.

Of course, this logic does not just apply to India—it applies everywhere. Remember, American wages are amongst the highest in the world. This means that most developing countries pose a potential threat to American industry.

Why tariffs—like diamonds—are forever

It’s pretty obvious how big differences in labor prices can lead to offshoring. It’s basic math. But what about when two countries have similar levels of economic development? Is free trade possible?

Not necessarily. Remember, a product’s cost is not always the same as its price. Many costs that may be baked into the price of an American product are not baked into the cost of foreign products—and vice versa.

For example, relative to the developing world, the United States has strict regulations that help balance economic interests with other important societal goals, such as ensuring reasonable workplace standards or protecting the environment. These standards impose costs on producers—it costs money to give workers lunchbreaks or to remediate toxic waste—and these costs are baked into the final price of an American-made product. The costs are internalized.

On the other hand, countries like China, India, or Mexico do not have robust regulations. As a result, their goods are “cheaper” than American goods—at least on paper.

But in reality, the costs are still incurred. They are simply externalized from the producer of a product to society at large. For example, there are moral costs associated with using slave labor to manufacture spatulas. There is an environmental cost associated with dumping poisonous sludge or microplastics into the ocean. There is a health cost associated with eating parasite-ridden food grown in unsanitary foreign countries.

Although these costs directly harm the American people, they are not reflected in the sticker price of foreign products. This gives imported products the illusion of being “cheap”, when in reality they are often just cheaply made.

What profits a man…

Rather than asking whether free trade is possible, we should ask whether free trade is desirable. Is it in America’s best interests to offshore our manufacturing capacity to China, India, or Mexico? Or are there non-economic reasons that we should be self-sufficient?

The Founding Fathers certainly thought so. Recall that the Tariff Act of 1789 was explicitly passed in order to help America develop its own industrial base.

We would be wise to remember that money isn’t everything. America is not an economy. America is a nation bound together by blood and tradition, language and culture, through faith in freedom and with trust in God.

In that vein, economic self-sufficiency has an existential value all of its own.

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Had I as many souls as there be stars,

I’d give them all for Mephistophilis.

~ Doctor Faustus

Spectators claim that Satan himself appeared on stage during the opening performance of Christopher Marlowe’s play Doctor Faustus (1588)—the grizzly specter drove men mad with fear.

Some wanted to demolish the theater, others to hang Marlowe for his occult summoning. In spite of this controversy, or perhaps because of it, the play was a hit. Today Faustus remains one of the greatest works of literature. Why?

Exquisite language?—lines like “the face that launch’d a thousand ships” have haunted readers for centuries. Perhaps. But time rarely preserves art for art’s sake: what survives is useful, it serves a purpose. Doctor Faustus is no exception.

The plot is simple: Faustus sells his soul to Satan in exchange for the demon Mephisophilis’ service for twenty-four years. Faustus dreams of wealth: I will “wall all Germany with brass. . .fill the public schools with silk” and “live a life of all voluptuousness.”

In the end, Faustus wastes his power and Satan takes his soul. The tragedy of Doctor Faustus contains an important lesson worth heeding: never trade tomorrow for today.

Unfortunately, that is exactly what America is doing. America has run a trade deficit every year for the last forty years. Last year the trade deficit was approximately $1.2 trillion.

How do we pay for deficits? Rather than selling our own current output, things that we make, we sell our past output, assets, and the promise of future production, debt.

And why is America selling her very soul? Because, like Doctor Faustus, our appetite for imported “voluptuousness” exceeds are rational expectations, and our love of today overshadows our fear of tomorrow.

America is Faustus—and we are running out of soul to sell.

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For love of thee, I cut mine arm…

We will begin by answering the most basic question: what is a trade deficit? Simply put, a trade deficit occurs when one country imports (buys) more than it exports (sells) to another country during a specific time period. Usually, we look at the numbers over a yearly basis, because different countries buy and sell different things depending on the seasons.

For example, if America bought $100 worth of oranges from Japan in November, but only sold Japan $50 worth of apples in July, we could say that America ran a trade deficit of $50 with Japan during the year. Conversely, we could say that Japan ran a $50 trade surplus with America. The overall difference, whether a surplus or a deficit, is known as the balance of trade.

Of course, in real life America buys more than oranges and sells more than apples. We buy and sell all kinds of goods, that is, physical products from apples to iPhones to cars. Therefore, when media personalities talk about the trade deficit, they usually refer to the overall trade deficit in goods—the deficit between all physical products bought and sold by America from all other countries in a given year.

Last year, America’s trade deficit was $1.2 trillion. Much of this was with China—our greatest rival nation.

Not only is America’s trade deficit objectively large, but America has run a trade deficit in goods every year since 1974—and this trade deficit grows almost every year. The cumulative value of the trade deficit (adjusted for inflation) is roughly $29 trillion.

America runs a large, chronic trade deficit. However, this does not mean that we run a trade deficit with every country.

A closer inspection of the numbers reveals that America generally has a balanced trade relationship with economically developed countries. Meanwhile, America typically runs trade deficits with developing countries.

Si peccasse negamus, fallimur, et nulla est in nobis veritas

The next logical question is how does America pay for the trade deficit? There are four—and only four—ways for a country to acquire foreign goods.

First, they could obtain them by way of tribute, either through of gifts or coercion. Second, they could obtain them by trading goods for goods. Third, they can do so by selling assets. Fourth, they can obtain goods by promising to pay in the future.

Although each of these options have been historically important, America’s current predicament places us squarely within options three and four. Let us explore each of the ways for countries to obtain foreign goods in more detail.

The first way that a country may obtain foreign goods is through tribute. Tribute simply refers to products received by one country from another country without a reciprocal exchange of products, either now or in the future. Essentially, tribute is a free lunch.

Although tribute is fairly rare today, it has historically been the most common way that countries have enriched themselves, and it explains most of the vast differences in wealth between historical societies. Tribute may take the form of gifts given from one country to another for the purposes of strengthening relationships. For example, the United States received the Statue of Liberty from France as tribute, due to the two countries’ historical friendship.

More commonly, tribute takes the form of coercion wherein one country provides products to another because of an asymmetrical political relationship. Often, weak countries would pay tribute to strong countries to prevent an invasion, and just as frequently weak countries would be looted by strong countries. In both cases the transfer of products can be characterized as tribute.

Tribute was exceedingly common in history. For example, client states of the Persian Empire were required to provide tribute to the Great King as diverse as horses from Cilicia, eunuchs from Assyria, or gold from India. Likewise, the Spanish Empire obtained fabulous quantities of gold, silver, and exotic plants and animals from their conquest of the Aztec and Inca civilizations.

Although the prospect of obtaining products by way of tribute is fascinating, it is irrelevant for our discussion of America’s trade deficit. China is not giving us our semiconductors because they like us, nor has America invaded Guatemala for the purposes of securing an unlimited supply of bananas—at least not recently.

The second way that countries can acquire foreign goods is by trading.

That is, countries may exchange currently-produced output for currently-produced output. For example, Argentina sells steaks to America in exchange for automobiles. If the value of steaks and automobiles is equal, then trade is balanced, and no further payment is required.

Of course, a country’s output is not limited to goods, and therefore our discussion of the trade deficit has until this point been somewhat misleading. America exports both goods and services. As we have discussed, a good is a physical commodity—something that you can touch, taste, or smell, like a brick, an apple, or a bottle of perfume. Goods can be owned, stored, and consumed by the buyer after they are produced.

A service, on the other hand, is not a physical product that can be owned, stored, or consumed later. Instead, a service is something that is intangible which is usually produced and consumed simultaneously. Typically, services deal in convenience and information. A helpful example that highlights the distinction between goods and services can be found in the music industry.

Our grandparents used to buy music on vinal records. The vinal record was a good which they bought: it was a physical product which transferred ownership from the seller to the buyer, and could be stored on the shelf until someone wanted to listen. Presently, many people listen to music on Spotify: they sign into their account and stream music from the application.

Spotify does not sell any physical products, the listener does not own anything new, and the music cannot be stored because it is only available so long as the listener has a Spotify account. Spotify is a classic example of a service. Other examples include massages, legal representation in court, or business consulting.

Selling services is tremendously lucrative—services underpin the entire business model of Silicon Valley—and they form a large portion of America’s exports. In fact, America had a trade surplus in services worth $288.9 billion in 2019. This means that a portion of America’s trade deficit in goods was offset by America’s trade surplus in services.

Overall, America’s goods and services trade deficit is worth $918 billion—this remains an enormous amount. Given that America runs a deficit in total current output, our initial question remains unanswered: how does America pay for the trade deficit?

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Homo fuge: yet shall not Faustus fly

The third way that countries acquire foreign products is by selling past output, something that was made in the past but retains value today. That is, the country must sell its assets. A good example of an asset is a house. The production of a house made in 1973 would contribute towards America’s GDP in 1973, but not today.

However, the house—or perhaps more accurately, the land upon which it is built—retains value and can be sold in the current year to buy foreign products. This sale would not count towards America’s GDP, nor would it factor into the trade deficit, however, it is an integral component of the balance of payments.

When discussing international trade, many economists contend that trade deficits do not exist because they are only one half of the balance of payments—they are simply a part of a larger equation.

For example, Professor Steve Hanke of Johns Hopkins University writes that “the U.S. trade deficit… is just the mirror image of what is happening in the U.S. domestic economy. If expenditures in the U.S. exceed the incomes produced in the U.S., which they do, the excess expenditures will be met by an excess of imports over exports (read: a trade deficit).”

What Hanke, and other liberal economists fail to recognize, are the practical consequences of running a trade deficit. Although the books are balanced on paper, reality shows us that it matters how they are balanced—there are two sides to every coin, but heads is not tails.

Every year, America sells billions worth of assets to pay for the trade deficit. To be clear, selling assets is not always a bad deal. For example, my law firm recently sold some old (ugly) furniture and used the proceeds to buy desktop scanners for our support staff. In this case we turned assets which did little more than take up space into assets that increase worker productivity. This was a good deal.

On the other hand, if I had sold my life-sized marble bust of Julius Caesar and used the proceeds to buy pizza, this would have been a bad deal. Not only would I lose out on any profits from the statue’s appreciation, but I would have nothing to show of the proceeds after I ate the pizza.

There is an important economic difference between fine art and pizza—between the permanent and the impermanent—between investing and consuming. Context matters, and this is a lesson which is lost on liberal economists.

Unfortunately, this lesson is also lost on America’s leaders. America is selling hundreds of billions worth of assets—everything from shares in New York’s largest companies to Iowa’s best farmland—every year to pay for our trade deficit. For example, foreign investors now own some 40% of all U.S. equities. This has skyrocketed up from just 12% in 2007.

Likewise, Americans are selling enormous amounts of real estate to pay for foreign production. In 2019 alone, foreigners purchased $183 billion in American real estate. America is selling its heritage and its economic lifeblood for cheap Chinese trinkets. We are selling our soul for convenience.

The fourth, and final, way that countries can acquire foreign production is by promising to pay for it in the future. In other words, by buying it on credit with debt. This last option is how America funds the bulk of its trade deficit. Consider that foreigners now own 33% of America’s national public debt, worth $7.7 trillion. Likewise, America’s household debt has climbed to unprecedented levels.

Debt is especially dangerous because not only does the borrower need to repay the principle, but will also need to repay the interest owed. This inflates the cost of buying foreign products in a way that most economists fail to appreciate. Consider that America became a debtor nation in 2006—for the first time since the Great Depression.

This means that America paid more money in interest to foreign holders than it received from abroad. Currently, America pays ~$150 billion to foreigners each year in interest on our national public debt. This is about one quarter the value of our trade deficit, and it too is increasing every year.

Lente, lente currite, noctis equi!

When Doctor Faustus sacrificed his immortal soul for temporal delights, he did so not because he was stupid, but because he was smart. Faustus believed that he was exceptional. That he was brilliant. That he could surmise a way to evade his fate.

America’s best and brightest have likewise deluded themselves into thinking that they can tame the offshoring vicious cycle. Our politicians ignore the problem, while our economists twist logic to justify our greed.

However, like Faustus, America cannot obtain an infinite supply of imported voluptuousness for free.

We must trade something, be it our past or our future, our sovereignty or our soul. Unless we change our course, we will be forced to accept our fate like the lamentable doctor:

Curs’d be the parents that engender’d me!

No, Faustus, curse thyself…

[for thou hast] depriv’d thee of the joys of heaven.

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I hate writing de novo. This is the artist’s domain. Political commentary should be just that—commentary.

I am at my best when I am in conflict with someone, or some idea. To that end, I will be writing long-form commentaries that will engage directly with someone else’s work or idea. I will publish these on Sundays, and will do my best to write at least two per month.

God bless. SPM.

The ur question of socio-economics is: why are some countries rich and other poor?

Many solutions have been proposed. For example, in 1748 Charles de Montesquieu wrote De L’Espirit des Lois. Montesquieu observed that countries located in temperate latitudes were typically richer than those located in tropical latitudes. From this, Montesquieu hypothesized that climate and geography helps explain why some nations are rich and others are poor.

Many classical liberals and leftists have been allured to the “geographic” explanation for the wealth of nations. Why?

Because it entirely sidesteps less “politically-correct” explanations like racial differences in intelligence, cultural chauvinism, or the Faustian spirit. It offers an easy way out. Why is Europe rich? Environment. Why is Africa poor? Environment.

Jared Diamond’s book Guns, Germs, and Steel stretched Montesquieu’s observation into an all-encompassing thesis, arguing:

The striking difference between the long-term histories of people of the different continents have been due not to innate differences in the peoples themselves but to differences in their environments.

That is, Europe is rich and Africa is poor because of environmental differences as they were in place 11,000 years ago. Essentially, mankind’s historical development is predetermined. We are all simply beneficiaries—or victims—or our ancestral geographic circumstances.

Not only is this thesis soothing to the anxious and soft liberal constitution, it has the added benefit that it explains history as being entirely materialistically determined—there is no room for the spirit of a great man—or for the divine spark.

Matter moves according to the simple chain of cause and effect, and this plays out ipso facto: the history of mankind is simply the great ballet of physics. We are a dance of molecules. This is no doubt comforting to the godless—who I assume are Diamond’s primary acolytes.

While there is no question that Diamond’s book is assiduously sourced, his overall thesis falls flat.

Instead, reality leaves us a paradox—a paradox that is unraveled for the first time in my book Reshore—that environment simultaneously matters and does not matter whatsoever.

Now, it is a fairly simple task to “debunk” Diamond’s thesis by pointing to more compelling explanations of economic disparity. For example, many readers would no doubt be satisfied if I simply posted the below national IQ map and said this was a better explanation, therefore there’s no point in engaging with Diamond’s environmental explanation:

While it’s true that national IQ scores do explain the phenomena better in aggregate, bringing this up is in fact a red herring that does little to explain why environment is inconsequential.

It’s also more interesting to engage with the environmental explanation of the wealth of nations on its own terms.

On Guns, Germs, and Steel

Diamond attempts to answer the question: “why did wealth and power become distributed as they are now, rather than in some other way?” Implicitly, the question can be framed as why did Europe conquer the world, and not vice versa?

Diamond explicitly rejects any inherent differences between peoples as a valid explanation. This alone should leave us skeptical of his work, but let’s engage Diamond on his own terms.

His train of through is summarized in the below chart, taken from his book:

The logic runs as follows:

First, the world is divided up into a number of different continental axes. A continental axis is an geographical area along which people, animals, and ideas can travel relatively unhindered. In general, these areas are contiguous, devoid of major geographic barriers (like a sea, or impassable desert or mountains), and climatically congruent.

There are three main relevant axes which birthed ancient civilizations, being: the Eurasian Axis (Western Europe to East Asia), the African Axis (the Sahel to the Ethiopian Highlands), and the American Axis (Mesoamerica to the Great Plains, and the Pacific to the Andes).

Second, certain axes had more flora and fauna available for domestication, and the longitudinal length of the axis facilitated the spread of agricultural, population, and later technology.

Third, domestication and more efficient food production led to a population explosion. This, in turn, led to societal stratification—a portion of the human population was freed from the need to produce its own food, and could therefore focus on higher or more abstract pursuits, such as warfare, art, religion, or learning.

This resulted in technological growth. Again, the diffusion of technology over the various axes is important to understanding why the Eurasian Axis outperformed the others—it was home to the most people, and provided the easiest means of transmitting technology. Enter guns & steel.

Fourth, the domestication of many animal species—in particular pigs and poultry—led to diseases jumping from animal to man. In addition to killing a great many people, the benefit was that the survivors had strong immune systems. This was not true for peoples who did not extensively domesticate animals (like the Mesoamericans or Australian Aborigines). Enter germs.

Basically, Euroasian civilization(s) dominates the world because it benefited from the above environmental accidents—a long east-west axis and many domesticable plants and animals, which set in motion an inexorable chain of events.

But as always, the Devil’s in the details. The question we need to ask ourselves: are Diamond’s presumptions true? No.

False Premise 1: Eurasia’s Continental Axis is Relatively Permeable

Diamond argues that the Eurasian Continental Axis stretches from Western Europe to Eastern Asia along a relatively temperate zone. This allowed the spread of crops, livestock, and ideas along the entire length of the axis.

Diamond alleges that this was a massive benefit to Eurasian civilizations—they benefitted from trade and discoveries along the entire axis. Bigger is better.

This is contrasted to Africa, as the continent runs along a north-south axis, and therefore separates the population along different climatic lines. The same is true of the Americas, which are longer than they are wide.

This allegedly stymied the transmission of agriculture, domestication, and technology, retarding the growth of civilizations. Basically, the north-south axis of Africa and the Americas created civilizational “islands” which were left to their own devices. The same logic applies to Australia and Oceana.

This makes some intuitive sense. However, Diamond’s own research undermines his argument.

For example, Diamond waxes on about how writing was such a transformative invention that it was only invented a few times in history—almost all civilizations received the technology through transmission. Diamond notes that writing arose independently in Sumer (3000 BC), Egypt (3000 BC), Mesoamerica (600 BC), China (1300 BC), and Easter Island (1700 AD), although I note that the latter’s independence is contested.

If the Eurasian Axis were as permeable as Diamond claims, why did Eurasians invent writing independently three times over? Surely, such a transformative invention would have been invented once, and then spread throughout the entire axis due to its high utility. Instead, it appears that contact was so limited that writing developed independently in Egypt and Mesopotamia, which are less than 1,000 miles apart!

Although Diamond focuses on the prehistorical period, it is clear that the West and China remained separately civilizations, with very limited contact, until well into the historical period. This is why numerous significant inventions, such as black powder and moveable type, were invented independently in Europe and China.

Diamond’s premise is also undermined by the fact that most major Eurasian domestic animals were domesticated independently, multiple times. For example:

• Cattle were domesticated in the Fertile Crescent (c. 8000 BC) and the Indus Valley (c. 7000 BC)

• Pigs were domesticated in the Fertile Crescent (c. 9000 BC) and China (c. 8000 BC).

• Chicken were domesticated in the Indus Valley (c. 3000 BC) and also Southeast Asia (c. 6000 BC) and possibly China.

• Sheep were domesticated in the Fertile Crescent (c. 9000 BC) and possibly also in Central Asia and Europe.

• Goats were domesticated in the Fertile Crescent (c. 8000 BC) and likely also in the Indus Valley region (c. 7,000 BC).

• Horses were domesticated on the Pontic Steppes (c. 4,000 BC), although there is genetic evidence that they were also domesticated separately in Iberia (c. 3,000 BC).

• Cats were domesticated in the Near East, possibly Cyprus (c. 7500 BC) and also in China (c. 3000 BC).

Based on animal domestication, it appears that there were three main regions which were relatively disconnected from one another in the material period (~11000 BC): the Fertile Crescent, the Indus Valley, and China. Interestingly, these three regions birthed the three major civilizations of Eurasia: Western, Indian, and Oriental.

In terms of the functional length of these axes, the African Sahel axis is actually as long or longer than the three sub-Eurasian axes, which clearly operated as independently as the African.

False Premise 2: Africa’s Continental Axis was Relatively Impermeable

Diamond contrasts the supposed ease of transmission through Eurasia with the difficulty of transmission through Africa—as if the Sahara is any less impenetrable than the Gobi, or the Ethiopian highlands were more impassable than the Himalayas!

In any case, it is impossible not to observe that Africa is literally connected to Eurasia, and there was significant historical trade along the Nile River and along the East African coast. Nubians, for example, were certainly in meaningful contact with the Egyptians—even building funeral pyramids of their own, as seen below:

Likewise, although Swahili is a Bantu-based language, it has incorporated significant number of Arabic loan-words (about 40% of its vocabulary). Swahili is to Arabic what English is to Latin—and certainly no one would pretend that English was not influenced by Latin.

It’s also worth noting that Africans were already resistant to Eurasian diseases when Portuguese traders began arriving to trade in the Fifteenth Century.

Even across the Sahara there appears to be meaningful cultural exchange. Consider the proliferation of Islam into the Sahel. Notably, King Mansa Musa of Mali was acknowledged as amongst the richest kings of his time, and during his pilgrimage to Mecca, he set of an inflationary crisis (having spend so much gold on the way), that it took 10 years for markets to go back to normal.

Africa was clearly permeable to a degree that is minimized by Diamond to “prove” his flimsy thesis.

False Premise 3: the American Axis Runs North-South

Diamond’s handling of the Americas—particularly North America—is bizarre. He claims that the Continent(s) runs north-south, and accordingly there is less ability for agricultural, technological, and cultural spread than there was in Eurasia.

This is patently false. Looking at North America, we can see that the growing zones flow smoothly across the continent. That is, crops that grow relatively well at one latitude and be expected to grow relatively well at roughly the same latitude all across the continent. North America is, actually, a very blessed continent in terms of its environment.

This is very different than Eurasia, which is punctuated with huge regions whose climate is carved into chunks by large arid and mountainous regions that impact the spread of flora and fauna—as noted above.

In terms of scale, the North American continent, from the Atlantic to the Rockies, provides an axis comparable in scale to those found in the old world.

Further, Diamond’s axis model breaks down when you realize that the Mesoamerican axis the Mesoamerican axis was 500 miles wide, and the Andean axis just 300 miles wide—that’s if we assume that Diamond is right to ignore the rest of North America’s easily habitable and traversable terrain.

Nevertheless, Mesoamerica and the Andes produced relatively advanced civilizations like the Maya, Olmecs, Toltecs, Aztecs, and Inca, who were arguably more advanced than most sub-Saharan African civilizations.

Diamond cherry picks his evidence to fit his theory.

False Premise 4: the Initial Conditions Determine Present Conditions

Diamond’s biggest error is assuming that initial conditions determine future conditions. This logic works only when dealing with simple systems—like machinery or a billiards table—but not when dealing with complex systems.

Civilization is clearly a complex system, therefore, the initial conditions are not determinative of present outcomes.

In more detail: a simple system is a mode of order wherein cause and effect are related in a linear, one-to-one, way. That is, if you know the starting position of each systemic element, and you know what causes applied to said system, then it is possible to predict—with certainty—the outcome.

A classic example of a simple system is a billiard’s table. There is a one-to-one relationship between the cause, the direction and speed of the cueball, and the effect, the direct and speed of the 8-ball. Because of this, it is possible for the skilled player to know the outcome of a shot before he takes it. The same is true for most artificial modes of order, be it the game of chess or the operation of a washing machine.

On the other hand, a complex system is a mode of order in which cause and effect are related in a non-linear way. That is, a single cause may have multiple effects on the system, and these effects may themselves interact with each other in novel ways.

Complex systems are subject to feedback loops, and may manifest emergent properties at different scales. As such, knowing the starting position of each systemic element, and the forces applied to said system, will not allow you to predict the outcome with any certainty.

That said, it is possible to forecast the probability of various end states.

A classic example of a complex system is the weather. There is a non-linear relationship between the various inputs, such as level of solar activity, humidity, wind speed, and the end result—which is a 30% chance of blue skies and a 70% chance of thunderstorms. It is not possible to know a priori what the weather will look like next week. At best, meteorologists and make and continuously-update forecasts based on the best-available data. The same is true for many organic and natural systems, be it human history or a hurricane.

Civilization is a complex system. In fact, it is the most complex system.

Consider that the causes of weather patterns are the interplay of solar radiation and water droplets. These causes are simple causes which, when isolated, operate in a linear way. These interactions are complicated to the point that a priori knowledge is impossible—but this is nothing compared to civilization’s complexity.

Civilization is the manifestation of a nearly infinite number of individual choices—the exercise of deliberate free will, of human consciousness. Philosophers disagree as to whether consciousness originates with God or is an emergent property of the human brain, but all agree that the mind is perhaps the most complex organic system.

When this fact is combined with the fractal nature of civilizational organization—different layers of familiar, political, economic, and religious organizations make different decisions that have ripple effects between the layers—it becomes obvious that discussing civilization in a reductionist way is beyond incompetent.

To directly address Diamond’s argument: the fact that Eurasians—particularly Western Europeans—came to dominate global civilization may or may not have anything whatsoever to do with the “initial conditions” as of 11000 BC. While a point of interest, they are irrelevant and offer no explanatory power.

For example, one would assume, given that Diamond notes civilization appears to be an autocatalytic process, that those places with the oldest civilizations would likewise be the most advanced—but that is certainly not the case.

In fact, it’s quite the opposite: the newest civilization, being Western (particularly Anglo-Saxon) civilization is the most advanced.

Diamond’s Thesis Lacks Explanatory Power

Diamond’s analysis is somewhat interesting, but flawed.

Remember, Diamond set out to answer why Eurasian civilizations—in particular European civilization—outperformed everyone else. He says this has nothing to do with innate differences between the peoples, but due to differences in their environment. His analysis focuses primarily on the initial conditions as they were 11,000 years ago. From that point on, the march of history was inevitable.

Does his explanation provide a satisfactory answer to this question? No.

Not only is there no such thing as a coherent Eurasian civilization—there are at least two, probably three, distinct Eurasian civilizations—but his thesis is little more than post hoc reasoning. His hypothesis is a “just so” explanation of our current paradigm which has zero predictive power.

Overall, Diamond’s work is just intellectual masturbation.

Economists say freer trade benefits everyone—even trade with China. America gets cheap goods and China gets money. Win-win.

Even if we assume America benefits—which is a false assumption as proven in my book Reshore—China has clearly benefited more. For example, China’s economy has grown by an average of 8.12% since joining the World Trade Organization since 2001—about four times greater than America’s.

China and America benefited asymmetrically from trade.

Asymmetry may not be a problem economically, but it is a problem politically. Why?

Power is zero-sum.

The strong China grows, the weaker America becomes relative to China. As such, trade with China is also a political issue. The question we should be asking ourselves is whether cheap goods are worth surrendering America’s political dominance.

In this article, we explore just how America’s foolish—often nefarious—elites enriched, empowered, and emboldened China.

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A Dragon Fed: How America Funded China’s Rise

There are three primary ways that America enriches and empowers China: investment, trade, and theft.

First, America invested directly in China by building factories—offshoring 60,000 factories does not come cheap.

The total value of American investment in China is unknown. According to China’s Ministry of Commerce cumulative foreign direct investment (“FDI”) totaled $2.7 trillion in 2023. Just 2.1% of this investment was categorized as American.

The reason that this amount is so low is because American investment is usually routed through intermediaries, mostly Hong Kong, Singapore, and the British Virgin Islands. This is why Hong Kong—a city smaller than Shanghai—owns 68% of FDI in China.

Not coincidentally, Hong Kong is a major recipient of FDI from the U.S. and from the British Virgin Islands—a tiny banking archipelago which is itself capitalized by the U.S. and the City of London. Because of this shell game, we cannot know the actual amount American companies have invested in China, but if we assume that FDI correlates with the relative size of China’s trade surpluses, then America’s investments total $972 billion.

This estimate is probably low. Why? China runs trade surpluses with countries which clearly contributed no investment—such as most countries in Africa and the Middle East. Given the level of economic integration, I would hazard an estimate that most FDI ultimately originated in America or the City of London, funnelled through their banking havens.

Second, America indirectly funded China’s rise through the trade deficit—buying more Chinese goods than we sold.

The cumulative trade deficit with China since 2001 is roughly $6 trillion, after accounting for inflation. Not only were the Chinese able to spend these profits, they were able to borrow against the revenue, greatly multiplying their access to capital.

And of course, on the other side of the equation, Americans had to pay for this deficit. This was done primarily through selling assets (like houses, farmland, and corporate ownership), and debt. Essentially, the trade deficit creates additional demand for USD which functions to transfer wealth from ordinary Americans who earn currency, to the elites who hold inflation-proof assets.

In this way, the trade deficit serves as one of the greatest wealth-transfers in human history.

Third, China has stolen an almost unquantifiable amount of American technology.

In 2017 the Office of the United States Trade Representative estimated that China steals intellectual property worth between $225 and $600 billion per year—more than the value of the annual trade deficit. If we use the low estimate, and do not adjust for inflation, the value of stolen technology would be at least $5.4 trillion.

Interestingly, the above numbers actually undervalue the quantity of this theft. Why?

Because most of the technological and IP outflows are not stolen in a traditional sense. For example, the main vector of technological transfer is via Chinese companies using their profits from the trade deficit to buy shares in American companies, at which point they own the technology. Currently, foreigners own 17% of American equities, and the number is growing.

The other vector is through Sino-American corporate partnerships. Basically, American companies that build factories in China are forced to partner with a local Chinese company—a corporate clone. The plant is staffed by Chinese workers, who are taught America’s industrial processes and how to replicate American technology.

Providing China access to American technology is actually the price to enter China’s market—American companies cannot operate in China without giving up their technological and industrial secrets. Yet they do it anyways because the Chinese make it worth their while.

In my view, the value of America’s stolen technology was priceless.

Remember, mainland China’s economy was largely preindustrial—about as productive and technologically advanced as the Thirteen Colonies during the American Revolution. Now, China has reached technological parity with the U.S. Theft allowed China to skip 200 years of technological and economic development.

America funded China’s rise. This has not only impoverished America, but it has ended America’s superpower era.

We now live in a multipolar world—bought and paid for by America’s corrupt politicians and Wall Street.

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The Congressional Budget Office (“CBO”) released a report on June 4, 2025, outlining how President Trump’s tariffs will impact the U.S. budget and economy.

President Trump is celebrating—even the democrat-controlled CBO is forced to admit that tariffs will help reduce the deficit over the next ten years.

President Trump is right: tariffs will help reduce the deficit one way or another. Either they will do so because they will raise additional revenue directly—tariffs are a tax, after all—or tariffs will raise revenue indirectly by reshoring America’s industry and growing our GDP.

History shows us that we will get a bit of both. However, if President Trump holds the line and ensures the tariffs remain high and stable, then we have the opportunity of a lifetime to reindustrialize America, rapidly grow our GDP, and create a prosperous future for our grandchildren.

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The Infamous Marshmallow Experiment

In the 1960s Stanford psychologist Walter Mischel conducted a ground-breaking experiment on willpower and self-control. The premise? How long could children resist eating one tasty marshmallow, in exchange for two marshmallows in the future?

The marshmallow experiment taught us a surprisingly large amount about ourselves. For example, children who were able to delay gratification were typically more intelligent and were more economically successful in life. The experiment has been repeated on animals, with the most intelligent animals—like crows—typically showing a preference for delayed gratification.

Delaying immediate gratification—enduring short-term pain—in exchange for long-term gain is the key to building a business, being a successful investor, and running a successful country.

This brings us to tariffs. Tariffs are the short-term pain that we must endure for long-term gain. This is our marshmallow test.

Here’s the good news: if we hold the line, we will get our reward. The economic logic and historical evidence prove that tariffs will increase GDP and create jobs in the long run.

Mirror, mirror on the wall

In 2024 America’s net trade deficit was $918 billion. This means that American consumed this much more than we produced. Of course, someone had to make these goods—mostly China. Accordingly, the trade deficit literally represents the value of America’s displaced economic production—if we didn’t buy it then we’d have to build it.

Reshoring the production that is currently reflected in the trade deficit will—by definition—increase America’s GDP by a commensurate amount.

We can expect America’s production (supply) to rise to meet our consumption (demand), because demand drives supply—that’s just how it works. Here’s the underlying logic:

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 1970’s. In fact, America’s economy 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, as I explain in my book: Reshore, How Tariffs Will Bring Our Jobs Home & Revive the American Dream.

Tariffs will make America rich again—but not immediately. Will the American People pass the collective marshmallow test? I hope so.

We need to be patient and remember that America does not just belong to us: it belongs to our children, our grandchildren, and every generation that has come before or after us.

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~Jesus Christ, Matthew 16:26

Adam Smith wrote The Wealth of Nations, which is the foundational text in modern economic scholarship. However, Smith was actually more fond his less well-known work The Theory of Moral Sentiments.

For Smith, like many important thinkers after him like the great Edmund Burke or Pat Buchanan, money and morality were inexplicably linked.

Therefore, what people need to understand is that trade with China is not simply an economic question—it’s a moral question.

When we trade with China, we support the genocide & oppression of Christians, pseudo-slave & child labor, we fund the flow of opioids into our country—poisoning our brothers & sisters and destroying our communities—and ultimately we enrich and empower the evil, atheistic, communist regime in China—not to mention the Imperial Cultists of DC and Wall Street.

Buying American is not just the best way to grow the economy & make America rich again, but it makes the world a less evil place.

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In light of the new wave of liberal lawfare being waged against President Trump’s tariffs, it’s worth considering: do the liberals have a point?

Rand Paul certainly thought so—recall that a few weeks ago he brought the Senate to a tiebreaking vote to halt the tariffs.

This is because Article 1, Section 8, Clause 1 of the Constitution explicitly grants Congress the power to “lay and collect Taxes, Duties, Imposts and Excises” and to “regulate Commerce with foreign Nations”. Strictly speaking, Congress has these powers—not the Executive.

However, Congress also has the authority to delegate powers to the Executive for specific purposes. This is typically done because everyone knows—even corrupt congressmen—that the Executive is both far more responsive and nimble than Congress, and carries out the duties on the ground. Accordingly, the Executive is often better suited to exercise certain congressional powers.

In that vein, Congress has delegated—authorized—the Executive significant powers over tariffs.

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A Brief Review of the President’s Delegated Authority on Tariffs

The International Emergency Economic Powers Act of 1977 provides the President with broad powers over commerce in cases of national emergency. This is why President Trump declared fentanyl smuggling to be a national emergency before imposing the first round of tariffs under this authority.

The legal questions swirling around this authority include whether fentanyl smuggling constitutes a national emergency, and whether broad-reaching tariffs are a relevant and proportional remedy to the issue.

Given that over 50,000 Americans die every year from opioid overdoses—and a further 25,000 from other drugs smuggled over the borders—it seems to me that this indeed constitutes a national emergency. Consider that Hurricane Katrina—unequivocally a national emergency—killed 1,392 people.

In terms of the remedy, I don’t see how you could possibly attempt to solve this problem without tariffs—in particular by eradicating the de minimis exemption through which these drugs are smuggled.

The reality is that an estimated $1.4 billion worth of goods came in through the de minimis exemption in 2024—this includes a significant portion of the fentanyl. Why? Because these goods came in under the radar. President Trump was right and justified in addressing the fentanyl crisis, and tariffs and eliminating the de minimis exemption are reasonable steps to take to address the crisis.

Another important example is Section 232 of the Trade Expansion Act of 1962 authorizes the President to impose tariffs if the Commerce Department finds that imports threaten national security. President Trump imposed tariffs on steel, aluminum, and automobile components under this jurisdiction.

While these tariffs were not impacted by yesterday’s ruling (which is stayed pending appeal), I think it’s very clear that imports of these items constitute a national security risk. In fact, I would go further: the reality is that imports of just about any good can pose a national security risk, if the imports threaten the vitality of America’s domestic industry. Why?

The final product which people care about—at jetfighter or computer, for example—depends on an incredibly complex supply chain. A disruption at any point in the supply chain can disrupt every other link, and undermine the final product—this is akin to an O-ring vulnerability.

Ultimately, America’s national security can only be adequately protected by self-sufficiency. Imports should be considered a luxury, rather than necessary for the economy to function. Tariffs are the most sensible and least intrusive way to remedy this issue.

The Trade Act of 1974 justify varying levels of tariffs. Section 122 authorizes 15% tariffs for up to 150 days to redress trade balance issues. Meanwhile, Section 301 allows the executive to impose tariffs to remedy unfair foreign trade practices—President Trump relied on this provision successfully in his first term.

Again, America clearly has a balance of trade issue: there has been a trade deficit every year since 1974. The cumulative value of these balances, after adjusting for inflation, is over $25 trillion. Tariffs are the most effective and least intrusive way to remedy this situation.

Section 338 of the Trade Act of 1930 permits the President to impose tariffs of up to 50% if said countries are discriminating against American commerce. Although countries like Great Britain, Australia, and Canada engage in mostly free trade with America, even they discriminate against certain American goods—it is well-known that Canada viciously protects its dairy industry.

This should not only be expected—it is justified. Foreign countries have the right to protect their industries from American competition—just as America has the right to protect her industries from foreign competition.

Despite what the free trade brigade says, the factual reality is that every country on earth discriminates against American commerce in some form or fashion—whether it’s imposing tariffs or other non-monetary barriers to entry. This has been done since time immemorial.

Accordingly, President Trump would be justified in imposing tariffs on this basis.

In a perfect world, Congress would take action and protect American industry from unfair foreign competition. But that’s not going to happen. Why? Congress is bought and sold by Wall Street, the CCP, and a litany of other special interest groups who profit handsomely on America’s industrial decline.

The ray of hope is that Congress has delegated significant authority to the Executive to impose tariffs and otherwise regulate foreign commerce. President Trump was elected to fix these problems, he is trying to do so, and his remedies fall within the letter of the law.

This matter was already debated and decided in the Senate—Rand Paul lost.

The Courts should respect the Senate and the Will of the People.

There is no other way to say it: liberal judges are waging unrestricted lawfare against President Trump.

First, they protected illegal immigrants from deportation—literally sheltering criminals from justice.

Now, they’re protecting foreign governments and multinational corporations from President Trump’s tariffs.

Case in point: yesterday, the U.S. Court of International Trade ruled the tariffs were illegal. Today, a second court followed suit.

This is not surprising. Wall Street is engaging in total warfare against President Trump. Why? Because Wall Street profits tremendously from the trade deficit—to the tune of over $1.2 trillion per year. If President Trump is successful, this gravy train comes to an end.

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How Wall Street Sold America for [$25 Trillion] Pieces of Silver

America has run a chronic trade deficit every year since 1974. The total cumulative value of this trade deficit (adjusted for inflation) is over $25 trillion.

That is, Americans bought $25 trillion more than they sold. Of course, we didn't get the goods for free—we still had to pay for them. How? By selling assets & debt.

An asset is something that we made in the past that still retains value.

A good example of an asset is a house. The production of a house made in 1974 would contribute towards America’s GDP in 1973, but not today. However, the house—and the land—retains value and can be sold in the current year to buy foreign products. This sale would not count towards America’s GDP, nor would it factor into the trade deficit, but it does balance the payment.

America trades assets—everything from Iowa’s best farmland to shares in New York’s largest companies—every year to pay for our trade deficit. For example, in 2024 foreigners bought an estimated $42 billion of residential real estate, $8 billion of agricultural land, and $12 billion commercial real estate.

Needless to say, this buying pressure raises real estate prices. This benefits people with exposure to the market—primarily institutional real estate investors—at the expense of the American people, who struggle to afford their rent or mortgages.

In addition to real estate, Americans also sell ownership of our businesses. As of June 2023, foreign investors own some 17 percent of all American equities. This inflates the stock market by guaranteeing buying pressure—again, benefitting Wall Street. The stock market balloons while factories and jobs vanish on Main Street.

Ownership of our businesses has other dire consequences, such as giving foreign governments direct access to our technologies. This perpetuates the massive theft of American intellectual property, which is estimated to cost America up to $150 billion every year.

Americans also sell debt to pay for the trade deficit.

This is sort of like buying groceries on our credit cards, except is occurring at the national level. For example, foreigners own some $8.67 trillion of U.S. Treasury securities, accounting for 24 percent of the public debt. Further, America’s corporate and household debt has ballooned since 1973 to the highest levels since World War 2.

Debt is especially dangerous because we have to repay the principle and we pay interest. This inflates the cost of buying foreign products in a way that most economists fail to appreciate.

Consider that America became a debtor nation in 2006—for the first time since the Great Depression. As a result, we are now paying over $150 billion in interest every year to foreign entities for the privilege of buying the products we should be building.

Given the massive profits that Wall Street earns in selling-out America, it it any wonder that they are funding litigation to stop President Trump’s tariffs?

The President needs to stand firm. Remember, tariffs are the time-tested solution that were supported by America’s most successful presidents from George Washington to Abraham Lincoln to Donald Trump.

Tariffs will reshore American industry and shift our economy from consumption to production, protecting our economy, our industry, and our national security.

Most importantly, tariffs will make it harder for Wall Street to betray the American people.

The reality is that tariffs with China are not the problem. China imposes significant non-monetary barriers to entry that effectively bar American companies from doing business in China. The tariffs could be zero and it would not matter.

The countries have agreed on a few of these non-tariff barriers. For example, China will suspend export controls on rare earth minerals, and has agreed to remove certain American companies from their “blacklist” which limit their Chinese operations. Unfortunately, these measures do not address the primary non-monetary barrier, which is endemic corruption and an inability to enforce property rights.

In any case, China agreed to play by the rules when they joined the World Trade Organization in 2001. China then spend the next two decades violating their own agreements at every twist and turn. We should have little confidence that China will enforce any non-monetary agreements in the future, based on their track record.

Reshoring American industry is the only way to keep America prosperous & safe in the future.

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On May 12, 2025, the White House issued a joint statement with China on trade, in which the countries have “paused” the trade war for 90 days.

More specifically, the United States has slashed tariffs from 145 percent to an effective rate of 30 percent. China has likewise slashed tariffs from 125 percent to an effective rate of 10 percent. Tariffs remain on certain industries including steel, aluminum, and automobiles. Other licensing deals respecting rare earth minerals and semiconductors remain in place.

This deal is a mistake.

A 90-day pause does nothing but burn precious political capital, waste time, and signal to businesses that the Trump Administration is not serious about reshoring.

If President Trump is serious about reindustrialization, then he needs to commit to high and stable tariffs. If not, he will poison the public against tariffs for another generation, and “Liberation Day” will go down in history as just another tax scam.

Cicero’s Wisdom

On April 2, 2025, President Trump announced he would impose reciprocal tariffs to liberate America from China. He promised to reshore America’s displaced industry and make America economically self-sufficient—just as the Founding Fathers intended.

In the coming days American and foreign companies pledged over $5 trillion worth of new investments—everything from a new steel mill in Louisiana to a new semiconductor factory in Arizona. The tariffs were working.

Nine days later President Trump paused the tariffs for 90 days. Why? To buy time for negotiations—negotiations with the same countries who have been happy to rip us off for decades. And just like that the investment announcements dried up.

To make matters more complicated, the tariffs were raised even higher on China during the pause. Companies like Apple announced that they were divesting from China, and instead opening factories in India—not America—India. Apparently, President Trump’s tariffs were working, just not for Americans!

Now President Trump has paused the tariffs on China too.

This confusion has set the stock market on fire—pensioners watched their 401K’s go up in smoke. Trillions worth of market capitalization was burned. Businesses have walked back their investment pledges to see where things settle. The markets are confused, businesses are frustrated, and the people are growing worried.

What is the point?

If tariffs are about reshoring America’s factories and creating middle class jobs—as I argue in my bestselling book Reshore: How Tariffs Will Bring Our Jobs Home & Revive the American Dream—then pausing the tariffs is not only pointless, it is destructive. President Trump’s flip-flopping is burning the political capital that he needs to sell tariffs to the American people, and it is showing businesses that America is not a stable market in which to invest.

As Marcus Tullius Cicero said: “more is lost by indecision than wrong decisions.” President Trump needs to commit to high and stable tariffs—the price of stability is more valuable than scaring an extra concession or two out of our reluctant trade partners.

In Praise of Boring

America needs stable tariffs. A local manufacturer like Delany Flush Valves cannot risk spending millions to restart their foundry in Charlottesville, VA, if the tariff rate changes every week. Nor will a company like Apple invest billions in new factories in Arizona. Instead, companies like Apple will try to ride out the storm—probably with the help of foreign governments who are keen to maintain their toeholds in America’s market.

President Trump needs to pick a flat tariff and stick to it. Alternatively, he could announce gradually increasing tariff rates four years into the future, to give manufacturers time to reshore their production to America. Either way, businesses need stability. This is not optional.

America also needs high tariffs. How high? High enough to make reshoring economical. If it is cheaper to build factories in China or Vietnam and simply pay the tariff, then the tariff will do nothing other than raise revenue. As Charles Benoit, trade counsel for the Coalition for a Prosperous America, has emphasized: tariffs are about reindustrializing America—not moving factories from China to India.

What is the optimal rate? Time will tell—but unfortunately time is not on the President’s side.

What we do know is that during the pause we saw businesses scramble to move production from China to India or Vietnam—not back to America. What this means is that the 10 percent flat rates is too low. The rate needs to be high enough to force manufacturers to reinvest in America, as was the case with the initial “reciprocal” tariffs—most of which were over 40 percent.

We also know that the cost of manufacturing in China is typically between 40 and 60 percent lower than in America. This is not because Chinese factories are more efficient—in fact, American workers are 2 – 3 times more productive than their Chinese counterparts.

Instead, it is because of other factors such as the cost of energy. For example, in China the average price of electricity is $0.08/kWh. Meanwhile, in America, the price is $0.13/kWh—a cost difference of 61 percent. Likewise, the cost of raw materials is 10 – 15 percent cheaper in China due to a focus on local production and producing at or below cost. If tariffs are not high enough to balance these cost differences, then reshoring will not occur.

Accordingly, the tariffs need to be at least 60 percent to make meaningful headway in reshoring factories. Further, they need to be high enough across the board that companies will not simply move from China to India.

Although this rate sounds high, we need to remember that America’s tariff rate throughout the Nineteenth Century was over 30%—and this was before forklifts and container ships. It would need to be higher now to achieve the same result. More recently, South Korea industrialized with average protective tariffs of roughly 40%—and they also had the advantages of a weak currency and cheap labor.

This is not the case for America today. Tariffs need to make up the difference. And this is all to say nothing of the fact that China steals hundreds of billions worth of American technology every year.

China does not case about America’s industry or the American people. China cares about China. Period.

There is no point in negotiating with China. Why? Any deal that does not bring the factories home is a bad deal—and China would never agree to this deal. Not in a million years.

President Trump needs to stop pussyfooting and dig his heels in the sand. Stand firm on tariffs—reshore the factories—revive the American Dream.

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Additional notes:

Amazon—and a host of other retailers—say that they will display the cost increase of tariffs on products, so that they can be “transparent” with consumers. A few points worth mentioning:

1. By displaying the tariffs, Amazon is effectively telling you which products are made in America—those products will be tariff-free. I recommend buying American when possible.

   If you won’t take my advice, then listen to Thomas Jefferson, who wrote in 1816:

   ...experience has taught me that manufactures are now as necessary to our independence as to our comfort: and if those who quote me as of a different opinion will keep pace with me in purchasing nothing foreign where an equivalent of domestic fabric can be obtained, without regard to difference of price...

2. I have been speaking with local radio hosts, and the callers are telling us that many businesses are marking up products for tariffs which were purchased before the tariffs came into effect.

   Remember, it takes months for products to make their way from China to America. Further, many businesses sit on inventory for many months—sometimes years depending on the product. They never paid tariffs on those goods, but are trying to profiteer on tariffs.

   Be careful. One caller even said they were slapping “tariffs” on used vehicles. This is obviously a scam.

3. When possible, you should try to buy American—even if the product costs more. Ultimately, you will likely save money in the long run. Why?

   1. American-made products are generally higher quality. In other words, you’ll buy it once, whereas you’ll have to buy the same Chinese product 2 or 3 times. You can read more about the decline in product quality in my book Reshore.

   2. America-made products are generally healthier—less toxins & heavy metals in the materials. Your body will thank you in the long run. You should especially avoid any Chinese products that you eat, or that come into contact with your skin. You are poisoning yourself. Needless to say, these health consequences cost money in the long run.

   3. When possible, buy local. Support local businesses—they are your neighbors—they are the ones who care about your community, and who employ your friends & family. Local businesses will generally be more honest, and care more about product quality than businesses who make their crap in China, because their reputation matters a lot more to their customers.

You have the ability to vote with your dollars. If you choose to buy American, then you are part of the solution. We can solve this problem without government if we need to. It just takes 1,000 acts of individual sovereignty & common sense.

India is taking President Trump up on his offer for reciprocal free trade, proposing zero-for-zero tariffs on specific goods like pharmaceuticals, steel & automobile components.

This has electrified President Trump’s base—the reciprocal tariffs are working! India’s coming to the table!

Sorry to burst your bubble: America will not benefit from free trade with India—or any other Third World country. Why? One word:

Externalities.

President Trump would be wise to remember that tariffs are not about moving factories from China to India—they’re about moving factories back to America.

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hunting unicorns

Real international free trade—much like real communism—has never been tried. Why? It’s impossible.

The reality that economists & libertarians refuse to recognize is that different countries are different. And not just different in a nominal sense—different in real and practical ways that prevent economic integration.

First, America and India have different levels of economic development that cannot be reconciled without seriously rebalancing the factors of production.

The average annual wage in America is $63,000 while the average annual wage in India is just $2,500—the average American earns 25x more than the average Indian. Labor is often the largest input cost for making products, accounting for approximately 30 - 35% of the cost of American manufacturing—and it’s an even higher proportion in many service industries.

If America and India traded freely, India’s low wages would undercut America’s labor market—either Americans will need to accept lower wages domestically, or the factories will relocate to India to take advantage of dirt-cheap labor.

How do we know this will happen? The exact same thing happen after China joined the World Trade Organization (“WTO”) in 2001.

In 2001 the average annual wage in America was $30,846 while the average annual wage in China was just $1,127—the average American earned 27x more than the average Chinese. What happened when American workers competed with Chinese workers? American factories moved to China and wages stagnated.

The pace of offshoring was harrowing. Since 2001 over 60,000 factories moved abroad, killing over 5 million manufacturing jobs. This has decimated America’s industrial capacity and hollowed-out local communities. And no, robots and automation had nothing to do with this process, in case you were curious.

In fact, the process has been going on even earlier than 2001. America has run global trade deficits every year since 1974. The cumulative value of these deficits is $25 trillion, after adjusting for inflation. This has decoupled wages for American workers from their productivity—even though workers produce more value, they aren’t paid for it. Why? Because the wages are suppressed by competition with cheap foreign labor.

Notice how the price differentials respecting America and China in 2001, and America and India today are almost identical. Why do we think the result will be different this time around?

from India with love

In addition to obvious market asymmetries like the price of labor, the cost of doing business in India is lower because of externalities. Essentially, there are many costs of doing business in America that are baked into the final price of a product, such as the costs of environmental remediation, labor standards, and upholding higher quality control standards.

These costs are not baked into the price of Indian products. Instead, the costs of pollution or abusive labor standards are externalized to the environment or society at large.

But of course, we always pay the piper. Rather than pay 10 cents more per spatula, we live with plastic trash from India floating up on American beaches, or mercury poisoning the fish we eat—we may not pay the price at the store, but we certainly pay it with our health and with our soul—all for the sake of “cheap” goods.

As I discuss in my book Reshore: How Tariffs Will Bring Our Jobs Home & Revive the American Dream, these goods aren’t actually “cheap” they’re just cheaply made. We end up spending more buying the cheap goods in the long run, because we purchase the same junk over and over again.

Often, foreign goods are not actually cheaper than American goods: they simply do not reflect the full cost of production. For this reason, America cannot produce goods as cheaply as China or India—not unless we are willing to destroy our standard of living—not unless we are willing to sacrifice our environment—not unless we are willing to outlaw morality in the name of business and sell our very soul for profit.

No. Reducing the cost of business to compete with India on price is simply not desirable. Nor is it possible.

Remember, even if America allowed manufacturers to externalize all costs, our economy is structurally distinct from India’s. In America, private corporations dominate the market. Although these corporations are large, and many are owned by the same few investment firms—like Blackrock—they remain private entities.

This is not the case in India, where the State is crafting a cohesive industrial policy designed to industrialize the country. Part of this policy appears to be to piggyback on America’s consumer market when it comes to strategic industries, like steel or pharmaceuticals—just like China.

Ultimately, the only way to protect America’s market from asymmetrical competition from countries like China or India is to price-in these externalities by imposing protective tariffs.

the shock & awe of reality

Different countries have different levels of economic development, legal systems, tax structures, histories, geographies, languages, cultural and business norms, and demographics. All of these differences can create market asymmetries which are simply not relevant domestically.

At best, free traders can reduce tariffs and other visible trade barriers, like taxes, transportation costs, and legal disharmonies. However, they cannot outroot the sort of cultural norms and political corruption that make doing business in India—or China, or Mexico, or Italy—different than doing business in America.

Ultimately, America’s interests are not served by moving industry from China to India. The industry needs to come home. Let’s not make the same mistake with India that we did with China—say no to free trade and raise the tariff walls.

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Dylan Matthews argues in Vox that even if President Trump’s tariffs reshore factories, they will not create jobs as promised. Why?

Matthews argues that America’s manufacturing job loss was not caused by offshoring to China. Instead, it is one of the “inevitable effects of rising productivity in the manufacturing sector.” Basically, robots—not the Chinese—took the jobs.

Matthews is wrong. Not only did “free” trade—or rather asymmetrical and unfair trade—with China kill the jobs, but tariffs are the best way to bring them back.

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Tin Lizzie’s revenge

In 1908 Henry Ford—America’s greatest industrialist—released his latest and greatest automobile, the Model T. What made the Model T so special? Its sticker price: the Tin Lizzie cost just $850, or roughly $21,000 in today’s money.

This was a watershed moment in American history. For the first time ever, middle class citizens could afford a personal vehicle. Henry Ford spent the next few years exploring ways to cut costs, so that he could realize his dream of bringing automobiles to the masses.

In December 1913, Ford Motor Company opened the world’s first factory with a mobile assembly line. This factory was an order of magnitude more efficient than any of its predecessors. In fact, Ford was able to reduce the time it took to build the Model T from 12 hours to just 93 minutes.

Greater productivity led to greater production. In 1914 Ford produced 308,162 Model Ts—more automobiles than all other manufacturers combined. Prices also dropped. By 1924 a new Model T cost just $260, or roughly $3,500 today. This was fully 83 percent cheaper than what a Model T cost just a decade early—and much cheaper than mass market automobiles today.

The Automobile Age had begun.

Henry Ford’s mobile assembly line dramatically increased productivity and therefore reduced the need for human labor. And yet, Ford did not fire his workers—he hired more. How do we reconcile this apparent paradox?

The solution is deceptively simple—and lost on Dylan Matthews. Employment is a balancing act between productivity and output. Productivity refers to how much value a worker can produce per hour. Output refers to how much value is produced in total.

All else equal: if productivity increases, then fewer workers are needed to produce the same value. For example, a worker with a digger can move more dirt than someone with a shovel. Conversely, if output increases, then more workers are needed to produce this value—if you want to move double the dirt, then you need twice as many shovellers.

Accordingly, employment will only decrease if productivity increases faster than output. This was Henry Ford’s secret: although Ford dramatically increased worker productivity, he also built many more cars. This logic explains why America’s manufacturing employment peaked in 1979—half a century after newspapers claimed that Ford’s machines made humans obsolete.

The vanishing act

Matthews claims that manufacturing employment decreased because productivity increased. This is half true. The full story is that America lost manufacturing jobs because the historic balance between productivity and output shifted.

Between 1950 and 1979 manufacturing employment increased. Why? During this period, output increased faster than productivity. Over the next few decades the balance began to shift.

For example, between 1989 and 2000 American manufacturing output grew by 3.7% on average, while productivity grew by 4.1%. Employment remained relatively stagnant, as the two grew in tandem.

The rubber really hit the road after 2001, when China joined the World Trade Organization. Over the next 10 years America’s manufacturing output grew by just 0.4%. Meanwhile, productivity continued to increase by 3.7%. This imbalance between productivity and output growth killed roughly 5 million manufacturing jobs.

Matthews, or perhaps more accurately the economists he cites, claims that productivity increases caused America’s manufacturing job loss. But like I said, this is only half true. Productivity is just one half of the equation. What killed the jobs was that output stopped increasing at the same rate. Remember, manufacturing employment continued to increase from 1913 to 1979—despite massive productivity gains.

What caused America’s output growth to collapse? The trade deficit.

Feeding the dragon

Since 1974—and particularly since 2001—America’s domestic output growth slowed dramatically, even though American workers continued to grow more productive. This is because thousands of factories were offshored to China and other developing countries because of market asymmetries and foreign industrial policies.

The value of America’s displaced economic production is reflected in the trade deficit.

In 2024, America’s net trade deficit was $918 billion—this includes the services surplus. This means that American 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 offshored economic production—rather than build it, we buy it.

How many jobs does the trade deficit displace? The U.S. Census Bureau estimates that every billion of GDP supports between 5,000 and 5,500 jobs. Based on this, we can estimate that the trade deficit displaces between 4.6 and 5 million jobs—mostly manufacturing jobs. Not so coincidentally, this is approximately the same amount of manufacturing jobs that have been lost since the 1990s.

On top of this, we need to remember that factories function like mines or farms: they are anchor industries upon which service industries depend. As such, they support other jobs that would not exist without them. Economists have studied this and call it the multiplier effect. Manufacturing has one of the highest multiplier effects of all industries, with each manufacturing job supporting between 1.8 and 2.9 predicate jobs (depending on the type of manufacturing).

This means that the number of jobs lost to offshoring are probably understated—the true damage could be well over 10 million jobs. This is, not-so-coincidentally, the approximate number of the people written who were written out of the labor force by the Bureau of Labor Statistics since 2006, as detailed in my book Reshore: How Tariffs Will Bring Our Jobs Home & Revive the American Dream.

At this point it should be clear that Dylan Matthews has it entirely wrong: robots are not to blame. In reality, America’s manufacturing productivity has improved at a relatively steady pace for over a century. During this time, manufacturing employment grew or remained steady.

It was not until the “free trade brigade” of globalists, neocons, and economic liberals worked in tandem to offshore thousands of factories to the developing world that America’s output growth flatlined. Incompetent and asymmetrical trade policies—not robots—is squarely to blame for America’s manufacturing decline.

The silver lining is that this process is not “inevitable”. Instead, the damage is entirely reversable through the sensible use of tariffs.

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Critics claim President Trump’s tariffs will destroy jobs. They are wrong.

In reality, President Trump’s tariffs have the potential to create 15 million new jobs. Many of these jobs will be high-paying manufacturing jobs, with employee benefits—the very sort of jobs that were lost over the last 50 years to offshoring and the “race to the bottom”. How?

Two ways. First, reciprocal tariffs are a carrot. If foreign countries come to the table and lower their own tariffs, then Americans will benefit from freer—and most importantly fair—trade. This will open up new markets worth trillions of dollars to American businesses, supporting millions of jobs back home.

Second, tariffs will level the playing field and protect American workers from foreign labor—who often work in slave-like conditions for next to nothing. This will reshore America’s factories, creating millions of jobs in the process.

Either way, America wins with tariffs.

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The Carrot

First thing’s first: America is not an economy.

America is a nation bounded by blood and tradition. The Constitution does not give anyone a right to buy “cheap goods” from China or Bangladesh. The President is obligated to do what is in America’s best interests—even if this prevents smug liberals German cars for French wine.

President Trump is doing just that: he is prioritizing the interests of the American people over and above the interests of any person. Let’s work through the logic—and job creation expectations—of tariffs.

In 2024 America exported $3.19 trillion worth of goods and services. This is in spite of the fact that most of our trade partners impose massive tariffs—as well as other non-monetary barriers to entry such as Byzantine regulations—on American goods. This goes to show just how efficient and competitive America’s industries are.

Nevertheless, the playing field is not level. This results in a massive & chronic global trade deficit.

Let us assume that trading partners see the error of their ways, and reduce their tariffs to reciprocal levels. This will allow American businesses to compete on even terms, and will open foreign markets for America businesses like never before.

If we assume that a 1% reduction in net tariffs results in a 1% increase in trade—which is a reasonable assumption based on current economic models—then America’s exports would increase by $1.6 trillion, bringing total exports up to $4.8 trillion.

Increasing America’s exports would create millions of good paying jobs. The U.S. Census Bureau estimates that every billion of GDP supports between 5,000 and 5,500 jobs. Based on this, these increased exports would support some 8.4 million new jobs. If we assume that only half of our trade partners play ball, we are still looking at over 4 million new jobs.

On top of this, we need to remember that factories function like mines or farms: they are anchor industries upon which service industries depend. As such, they support other jobs that would not exist without them.

Economists have studied this and call it the multiplier effect. Manufacturing has one of the highest multiplier effects of all industries, with each manufacturing job supporting between 1.8 and 2.9 predicate jobs (depending on the type of manufacturing).

But i digress. To sum up: opening new markets to American exports will likely create at least 4 million jobs—probably more because of multiplier effects.

The stick

If our trading partners do not lower their tariffs, who cares? President Trump’s Liberation Day tariffs will create jobs by promoting American industry. Rather than pay tariffs, people will buy American. This has the potential to create another 10 million jobs. How?

Tariffs will create jobs is by reshoring foreign factories to America. For five decades, America has embraced the globalist experiment. In this time, America has lost over 6 million manufacturing jobs—most of them since 2001 when China joined the World Trade Organization.

President Trump’s reciprocal tariffs will end the offshoring vicious cycle, which pits American workers against slave-labor in the Third World—a competition that they cannot possibly win. Instead, foreign producers will reshore their factories and make their products in America. Let’s look at the numbers.

In 2024, America’s net trade deficit was $918 billion—this includes the services surplus. This means that American 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 offshored economic production—rather than build it in America, we buy it from foreign countries.

If we assume that the tariffs cut the trade deficit in half, to $460 billion (which seems reasonable over the course of President Trump’s term), and if we use the same job-creating assumptions as before, then we can expect the trade deficit reduction to create 2.4 million jobs—primarily manufacturing jobs. If we include the services supported by these, then we can expect Trump’s tariffs to create about 7 million jobs simply by reducing the trade deficit, and reshoring America’s economic production.

In total, and using conservative estimates, President Trump’s reciprocal tariffs have the potential to create 11 million jobs for hardworking Americans, who have been bruised and battered by economic globalism.

In all of this, we need to remember that there will be some pain before the gain. President Trump is realigning the world order, and changing course on 50 years of policy. Just remember that this is not ultimately about economics.

America is a nation, not a market. Tariffs will also liberate America from foreign suppliers, and protect the American Dream for decades—hopefully centuries—to come.

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On April 2, 2025, President Trump announced reciprocal tariffs that would liberate America from China by reshoring American industry so that America is economically self-sufficient. After all, how can America defend her independence when she relies on Chinese ships, machinery, and computers?

Tariffs are not just an economic issue—they are an existential necessity.

Unfortunately, President Trump only has four years to reshore America’s industry—to prove that tariffs work. This will be tough, but not impossible. Many countries, from South Korea to Japan—to America herself—have done it before. We can do it again. Here’s how.

American Industry is Being Slaughtered on the Altar of Globalism

To begin with, why does America need tariffs?

Tariffs are not—and never were—just about economics. Tariffs are about making America self-sufficient. Why? Because political independence is impossible without economic independence. America’s Founding Fathers learned this lesson the hard way: no industry, no nation.

Remember, the greatest threat to the American Revolution was not the British soldiers, but her factories. Why? The Colonies depended on British imports for everything from textiles to weapons. It was not until the French started supplying war materiel—including over 80,000 firearms—that the Revolution had a fighting chance.

After the Revolution, George Washington wrote:

A free people ought not only to be armed, but . . . their safety and interest require that they should promote such manufactories as tend to render them independent of others for essential, particularly military, supplies . . .

Washington’s first major piece of legislation was the Tariff Act of 1789. Two years later, Alexander Hamilton published his Report on Manufactures which provided the U.S. with a blueprint for industrial development: the “American System”. For Hamilton, tariffs were not simply a tax, they were the key to unlocking America’s industrial potential.

America followed Hamilton’s wisdom for nearly two centuries, prospering and industrializing under high tariffs. In fact, America had the highest average tariff rate in the Nineteenth Century. By 1870 America produced one-quarter of the world’s manufactured goods, and half by 1945. America was the world’s factory.

In the 1970s America began its failed experiment with economic globalism. The result?

America has run global trade deficits every year since 1974. The cumulative value of these deficits is ~$28.1 trillion in today’s dollars. Americans have also invested $6.68 trillion abroad, building factories, laboratories and infrastructure in foreign countries. To add insult to injury, foreigners have stolen almost $10 trillion worth of American intellectual property and technology.

This has been catastrophic for America’s industrial base. To begin with, over 60,000 factories have been relocated to China, Mexico, and Europe. This caused job loss on an unprecedented scale—America has lost over 5 million good-paying manufacturing jobs since the 1980s.

Large-scale unemployment has obviously had downstream effects on wages. The grim reality is that the ability to offshore factories shifted bargaining power away from workers to employers. This uncoupled the historic link between productivity and wages—in the past, more productive workers were compensated accordingly. Now, workers take what they can get. If not, the job goes to China. American wages have been gutted by this “race to the bottom”.

Offshoring has undermined American industry, leaving the Nation beholden to foreign suppliers.

Consider that America no longer manufactures enough of the of basic machinery required to manufacture basic household items like knives and forks—never mind the sophisticated electrical components needed for computers and smartphones. In other words, even if we wanted to manufacture forks, we would probably need to buy the fork-making machinery from China.

This is made clear when we look at America’s production of machine tools. A machine tool is a piece of machinery that shapes its output by removing material by way of lathing, planning, drilling, milling, grinding, sawing, or pressing the output. Machine tools transform raw materials into something useful. They are the tools that make tools.

America used to be the leading manufacturer and global exporter of machine tools. Today, America imports of most its machine tools, and only produces 7% of the world’s machine tools. For comparison, Italy produces 8%, while China makes 29%.

The state of high technology is even more distressing.

America imported $763 billion worth of advanced technology products in 2024, including a sizeable deficit in silicon computer chips. The modern world runs on computers. They are in everything from our most advanced aircraft to humble toasters. America would shut down without computers—without imports.

Not only does America rely on foreign chips, America does not manufacture the photolithography machines required to print the chips. Those come from the Netherlands, are shipped to Taiwan, who sells the finished product to the U.S. The whole supply chain is offshored, leaving America profoundly vulnerable.

This is the case for just about any critical product: America depends on imported steel, ball bearings, automobiles, and oceangoing ships. Embarrassingly, China builds orders of magnitude more oceangoing ships than America. How can America claim to be a global power after China rules the waves?

What if China were to stop shipping silicon chips to America? What about something as simple as shoes? Light bulbs? No foreign power should have this kind of leverage over the American people. And while they have this power, is America truly free? No—no more than a suckling infant is free from his mother.

Dependence breeds servitude. Free trade will make America a nation of slaves.

How Tariffs Can Make America Self-Sufficient Again

President Trump only has four years to prove to the American People that reindustrialization is possible. Imposing “reciprocal” tariffs undermines this goal. Pausing the tariffs for 90 days to haggle with foreign leaders undermines this goal. Shocking the stock market undermines this goal. If President Trump is going to be successful, this is what he needs to do.

First, America needs high and stable tariffs.

These tariffs need to be high enough to make reshoring economical—if it is cheaper to build factories in China or Vietnam and simply pay the tariff, then the tariff will do nothing other than raise revenue. What is the optimal rate?

Time will tell—but unfortunately time is not on the President’s side. As such, I would recommend imposing immediate “overkill” tariffs of 100% from day one to make sure the job gets done.

Although this sounds high, we need to remember that America’s tariff rate under the American System was over 30%—in an age before the advent of forklifts and container ships. It would need to be higher now to achieve the same result. Also, remember that these were average rates. Tariff rates on manufactured goods were much higher than those on raw materials, so the effective tariff rate on the sorts of products that we currently want to reshore was much higher.

More recently, South Korea industrialized with average protective tariffs of roughly 40%—and they had the advantages of a weak currency and cheap labor. Japan also raised similar tariffs when it was reindustrializing after World War II, and likewise enjoyed cheap labor & cheap currency.

This is not the case for America today—American labor is expensive and we have the global reserve currency. Tariffs needs to make up the difference in order to normalize the economic asymmetries.

Next, the tariffs also need to be stable. Companies are not going to invest trillions in America if the President flip-flops the rates every two weeks. They will simply try and ride out the storm—probably with the help of foreign governments who are keen to maintain their toeholds in America’s market. President Trump needs to pick a flat tariff and stick to it.

Second, tariffs need to serve the purpose of reindustrialization. If they frustrate this purpose, then there is no point to imposing tariffs. For example, industry benefits from access to cheap raw materials. Accordingly, there should be zero tariffs on raw materials like rare earth minerals, iron, or oil. America can only benefit from cheap fuel.

Also, there is no point in imposing tariffs on exotic products, that is, products that America cannot grow or mine. For example, America cannot grow coffee beans or bananas. As such, what is the point in putting tariffs on these sorts of products? This is a revenue scam.

Third, tariffs are going to generate revenue—people will always buy imports. These revenues should be used to reindustrialize America. For example, tariff revenue could be used to offset tax cuts to American industry. The revenue could also be used to used to finance low-interest loans for large industrial projects, which are capital intensive.

Or perhaps a more innovative solution would be to use the funds to contribute towards the down payments for large-scale industrial developments. This would solve the problem of American businesses coming up with capital for these large projects. These down payments would be secured against the land—to be repaid with interest when the land sells. This would help American accumulate as much capital as quickly as possible. Canada has done something similar with a homebuyers policy, and it has worked well—why not apply the same logic to heavy industry. The rest of the world engages in similar practices, America should too.

Finally, we need to recognize that tariffs are not a panacea. Ultimately, President Trump needs to work with Congress to make it cheaper to do business in America. The priorities should be reducing taxes and regulations, rebuilding America’s dilapidated infrastructure—both physical infrastructure like railways and ports, and technological infrastructure like the power grid and fiber optic networks—and expanding cheap energy sources like clean coal, hydroelectric, and small-scale nuclear reactors.

Hell, just building some pipelines up to Alberta’s oilsands would be enough to revitalize America’s economy. Alberta oil trades at a ~$20 per barrel discount because of supply chain issues. America would benefit enormously from access to cheaper energy.

This is America’s last chance to reindustrialize. Why? Another decade of globalism will hollow-out American industry past the point of no return. America will be damned to the fate of Great Britain—the former factory of the world.

President Trump needs to stay the course and impose high and stable tariffs, and stay focused on reshoring the factories and reviving the American Dream.