Scott Bessent argues that tariffs, when combined with tax cuts and deregulation, will make investment in America great again. Is he right?
Take the example of the president of a German car manufacturer. His company already makes some cars in the US for the American market, but that clearly isn’t enough for Trump. It sounds like Bessent wants him to move all of his operations to the US and export to the EU. Is that plausible? Would the EU really permit that to happen? How would he find a large enough pool of underemployed skilled workers in the US to operate the plants? What would happen to his extensive supply chain in Germany? How can he rely on Trump’s tariffs remaining stable when the rules can change at any time and for any reason?
In short, the answer is no. To make matters worse, Bessent seems to be assuming that America’s trade partners will sign agreements to let their manufacturing base be hollowed out. That isn’t going to happen, either; if the mass migration of industry to the US is going to occur, it will be the result of the shock-and-awe reciprocal tariff scheme, not the deals we have been promised in the interest of American export businesses and consumers.