Companies will Rush to Insulate themselves from Tariffs
A key component of Trump’s tariff policy is to bring manufacturing back to the U.S., reversing a 25-year trend of offshoring to China and other countries. That is his desired outcome. Trump has already succeeded in convincing Apple to manufacture high-end products domestically rather than outsourcing them to China. Apple plans to invest $500 billion in the U.S. alone, setting a precedent that other companies may follow.
Trump has often referenced the 25th President, William McKinley, and his 1890 tariff policies, which encouraged domestic manufacturing. McKinley used tariff revenue to fund incentives for businesses—an approach Trump intends to replicate.
However, Trump’s focus does not appear to be on bringing back lower-end manufacturing, such as clothing or inexpensive consumer goods. Instead, his agenda seems centred on high-value industries, including AI chips, AI-powered smartphones, high-end servers, automobiles, heavy machinery, electric batteries, and other advanced technologies.
To achieve this, Trump will need a highly skilled workforce—something that cannot be developed overnight. As a result, he may turn to countries like India to fill the gap.
Tariffs also serve as a protective measure for domestic manufacturers by preventing them from being undercut by cheaper foreign imports, particularly when those imports are sold below cost (a practice known as “dumping”). By increasing the price of imported goods, tariffs create a more level playing field for U.S. producers.
The net effect? Higher prices but also more domestic jobs.
At present, Trump is leveraging tariffs as a safeguard for critical U.S. industries, shielding them from unfair foreign competition. However, the trade-off remains: protection for American businesses comes at the cost of higher prices for consumers.