THE ORDER AND CHAOS OF ECONOMIC NATIONALISM

April 15, 2025

Dear Reader,

There's something profoundly important about understanding where we stand as a nation, economically speaking. And make no mistake about it—we're in the midst of an archetypal battle between competing visions for America's industrial future.

The Trump administration implemented what can only be described as a radical reshaping of America's trade relationships. Why? To slay the dragon of foreign dependency. To resurrect the spirit of American production. To stand up straight with our shoulders back on the world economic stage.

But here's the bloody truth: The path to economic sovereignty is paved with sacrifice and unexpected consequences.

THE BITTER MEDICINE OF TARIFFS

The tariffs were designed to accomplish several aims:

• Discourage our dependency on foreign production

• Encourage domestic manufacturing

• Protect American industries from what the administration viewed as predatory foreign practices

These are noble goals. Who wouldn't want to see American factories humming again? Who wouldn't want to see the dignity of productive work restored to communities hollowed out by globalization?

And yet, the data tells a complicated story that doesn't fit neatly into ideological boxes.

THE IMMEDIATE BURDEN

In the short-term, these tariffs have imposed a form of economic suffering—what I would call necessary suffering. Manufacturing costs have risen. Federal Reserve research indicates a net 1.4% reduction in manufacturing employment. This is precisely the sort of painful reality we must confront.

Many businesses, rather than bringing production home, have simply traded one foreign dependency for another. They've sought refuge in alternative low-tariff countries. Why? Because the fundamental economic reality remains: American production costs are typically double those of offshore operations.

This isn't mere opinion. This is the cold, hard truth revealed in the 2025 CNBC supply chain survey.

THE POTENTIAL FOR REDEMPTION

Now, there is potential for long-term transformation—but it requires a kind of societal commitment that transcends mere economic policy.

If these tariffs remain in place, persistently, then companies may be forced to fundamentally reconsider their global supply chains. We may see genuine investment in American production capabilities—not because it's immediately profitable, but because it's strategically necessary.

We've already witnessed glimpses of this in sectors like steel and aluminum. Even tech giants like Nvidia and Apple have announced high-profile domestic investments. These are exceptions now, but they could become the rule.

THE DEEPER BARRIERS WE FACE

But we must be absolutely honest about the barriers we face:

1. The Cost Reality: Establishing new domestic supply chains costs at minimum twice as much as current arrangements for most businesses. That's not ideology speaking—that's economics.

2. The Skills Deficit: We face a profound shortage of skilled manufacturing labor. This isn't just about policy—it's about our cultural orientation toward work, craftsmanship, and technical education.

3. Global Retaliation: Other nations have imposed retaliatory tariffs, creating a cascade of economic consequences that hurt American exporters.

4. The Uncertainty Principle: Companies hesitate to make multi-billion-dollar investments without assurance that the tariff structure will remain stable.

THE ARCHETYPAL STRUGGLE

What we're witnessing is, in essence, an archetypal struggle between different modes of economic organization:

• The protected sectors (tool shops, primary metals) that benefit from these policies represent one economic vision.

• The globally integrated industries that depend on international supply chains represent another.

This isn't merely about dollars and cents. It's about how we define ourselves as a nation. It's about whether we choose self-sufficiency and higher costs, or global integration and potential dependency.

THE PATH FORWARD

The consensus among experts—and I've reviewed this literature extensively—is that the tariffs have not yet delivered a broad manufacturing renaissance. They have increased costs and diverted supply chains away from China, but not necessarily back to American shores.

For true onshoring to succeed, we need a multi-faceted approach:

• Sustained, predictable policy

• Investments in automation to offset labor costs

• Serious workforce development

• A cultural reorientation toward productive work

None of these are simple or quick fixes. They require depth of commitment. They require sacrifice. And yes, they require us to bear a burden in the short term for potential long-term gain.

IN CONCLUSION

The evidence to date shows limited positive impact from these tariffs. High costs, labor shortages, and policy uncertainty remain significant obstacles. The economic promised land of a manufacturing renaissance remains elusive.

But here's what I'll tell you, and this is crucial: True economic transformation requires more than policy. It requires a reorientation of our values, our education system, and our relationship to productive work. It requires us to embrace the responsibility of higher prices in exchange for greater self-sufficiency.

The question remains: Are we willing to make these sacrifices? Are we willing to endure the necessary suffering to forge a new economic identity?

That's the real question beneath all the economic data.

Until next time,

Alex Peterson
Chief Economic Analyst