The stated goal of Trump’s tariffs is to bring manufacturing back to the US.  Many people have applauded the intention while criticizing the fact that new factories will take years to build, while the adverse effects of tariffs will be felt now.  As the new “deal” with China might illustrate, Trump’s tariff policy may not have the staying power to wait for the renaissance of American manufacturing.   

But, even if the tariffs were to be maintained long enough for factories to be built, would this likely occur?  There are several reasons to believe that it would not.

First, it is highly unlikely that any major American manufacturer of high-end products would be able to fabricate all of the components themselves, or rely on other American manufacturers to do so.  It is well documented that automobiles assembled in the US rely on parts from all over the world.  The same thing is true for computers, electronics, airplanes and a whole host of other products. 

Second, there are not enough American workers to manufacture the simple components that high-end manufacturers need.  Do American workers really want to work in a factory that makes fabric for car seats?  If tariffs are high, such components will cost too much whether they are made in the US (high labor costs) or abroad (high tariffs), thereby creating a disincentive for building or expanding American factories that make high-end goods.

Third, if tariffs remain high, so will reciprocal tariffs imposed by other countries on American-made goods.  So, any products made in the US will have high costs when shipped abroad, likely resulting in lower overall demand than would be the case if tariffs were low. 

These effects are already starting to manifest.  As reported in the New York Times, German companies, which have traditionally been among the biggest investors in the US, are rethinking whether they want to continue to do so.  https://www.nytimes.com/2025/05/13/business/germany-us-trade-trump.html.  If German  manufacturers are not keen on the future of American manufacturing in the new world of high tariffs, this could be an indication that American investors also will come to the conclusion that it is not a good bet.