President Trump loves tariffs. But can American manufacturing survive?
A key plank in the Donald Trump election platform was the widespread implementation of tariffs on goods imported into the United States. Historically, tariffs have been a popular strategy to boost domestic employment, but the globalized supply chains over the last 30 years have changed the way most production goods are manufactured. What happens to the cost of US production if critical inputs face tariffs?
A test case may be the Boeing 787 Dreamliner, a major commercial aircraft program which was designed from the outset to have a widely distributed supply chain of major assemblies, with Boeing acting as an integrator and final assembler of those components. Special exemptions will likely be built into any tariff policy for American firms building globalized products.
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