this post was submitted on 09 Feb 2025
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The thing is that you invest and build things like factories with a long-term time horizon. One of the things that makes stable western democracies rich is that we have stable governments and a rule of law that makes planning these large, long-term investments easier. With Trump, you have no idea what is happening next month, never mind next decade. And you can assume that most of this crazy stuff will be repealed in 4 years max. So, it is not worth building most of the factories you would need if this were going to be the policy for decades.
As you say, the supply chain is unlikely to shift that much. What will happen are changes in demand. It will hurt both sides.
There is a reason that The Depression was global. You cannot tariff your way to prosperity.
No, actually, I think supply chains will change a lot, but mostly because nobody wants to trade with an unreliable partner unless if the profits are high enough.
US will be paying more for everything, and will have more trouble getting deals made because they will be on a shorter term basis. Not the decade long deals they are used to, but ones that are only months long because you don't want to be chained to a country when the laws related to your products can change at a moment's notice.