Donald Trump has placed a high-stakes bet with his latest tariff threats, gambling that the economic pain inflicted on trading partners will translate into a boost for US jobs and manufacturing. The policy, which includes duties of up to 100% on goods like pharmaceuticals and trucks, is a clear attempt to force companies to build and produce on American soil.
The core of this strategy is the implicit promise of exemption for companies that invest in the US. Market analysts and the companies themselves, including Swiss pharmaceutical giants Roche and Novartis, believe that having or building US plants is the key to avoiding the tariffs. This creates a powerful incentive for foreign firms to onshore their operations, which the administration hopes will lead to job creation.
However, this gambit comes with significant risks and has been met with fierce criticism. The German auto trade body, the VDA, argued that the 25% truck tariff would do the opposite of what is intended, warning it would “further burden investment and jobs in the US” by disrupting supply chains and increasing costs. They noted that German industry already employs over 120,000 people in America, suggesting the tariffs could harm existing US workers.
For countries like the UK, the immediate impact is one of economic peril. Its pharmaceutical sector, a major employer and exporter, faces a crisis after being left out of a protective trade deal. The British government is now desperately trying to negotiate a solution, highlighting the disruptive power of the US policy.
The ultimate success of Trump’s bet is far from certain. While it may coerce some companies into moving production, it could also lead to higher prices for American consumers, retaliatory tariffs from other nations, and a broader global economic slowdown. The coming months will reveal whether this aggressive protectionist strategy pays off or backfires spectacularly.
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