I’m excited to share an insightful email that raises some thought-provoking questions about tariffs. While tariffs might seem like a dry topic at first glance, digging deeper reveals just how impactful and complex they really are.
We genuinely appreciate thoughtful perspectives—especially when they’re as well-articulated as this one. At the heart of our podcast is a commitment to exploring both sides of every topic. It’s this balanced approach that helps us grow not just as podcasters and coaches, but as informed Americans.
First, you’ll find the original email, followed by our response.
Hello Julie,
I like your positive outlook of what effect the tariffs will have on the USA economy, but does it actually conform with the reality of what the real cost will be?
For one, you predict that “although prices will go up, they will eventually come down as more production is done within the country, manufacturing coming back, etc.” (I am paraphrasing), but the reality is that manufacturing DID start coming back the last four years, and there was no need to use tariffs to make it happen.
Now, when in our current history, besides Real Estate, have consumer product prices drop after having suffered a spike in price? Its usually blamed on high oil prices, then all consumer products go up, but when oil prices drop, can you point a time when consumer prices came back down? During the last administration the price of oil came down considerably, but consumer prices kept going up, what used to be a $150.00 bi-monthly food cost at Costco, became a $200.00, then a $250.00, and now its hard to get out of Costco with a bi-monthly expense of $300.00 or $600.00/month. So tell me, when have prices gone down after they went up?
You also missed the effect that deportations is going to have on the construction industry, Read the following data:
According to recent data, approximately 25-30% of workers in the US construction industry are foreign-born, meaning a significant portion of the construction workforce is made up of immigrants; in some states like California and Texas, this percentage can reach up to 40%
Can you imagine how much it is going to cost to build a house after deportations and tariffs? How do you think the cost of building will come down? The reality is that Americans will never accept the kind of pay that foreigner in the construction and agriculture industries get. Not only that but, and this is from experience when we had our roof redone, most Americans will not put up with working on a roof eight to ten hours per day in the scorching sun. When we replaced out roof the job was delayed because some of the foreign workers left, they hired some American workers who lasted only a day or two, they had to get the foreign workers back, not sure if it was a money dispute, but that is how they were able to finish our roof.
Now lets talk just a little bit about agriculture, see the data:
A large percentage of farm workers in the United States are foreign-born, with estimates ranging from 48.9% to 70%. The percentage of foreign-born workers varies by state, industry, and type of work.
I hope you are right that tariffs are a blessing in the sky and will eventually bring a great economy to the country, that taxes will come down for all and not for just a few, but history and data do not agree with your analysis and your wonderful optimism.
I almost forgot, the tariffs are also expected to break what little balance we have in the World, it will place the USA in contention with our allies, which is never a good thing.
Here is a link that may be of interest to you:
https://taxfoundation.org/
Thank you,
L
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Hi,
Thank you again for your thoughtful email and for taking the time to lay out your concerns in such detail. I truly appreciate the dialogue and your willingness to engage in an open discussion. While I understand your perspective, I’d like to offer a counterpoint on some of the issues you raised, backed by historical data, economic trends, and additional context.
1. The Role of Tariffs in Reshoring Manufacturing
You mentioned that manufacturing started coming back over the past four years without tariffs, and that’s partially true. The U.S. saw an increase in domestic production due to tax incentives, deregulation, and shifts in global supply chains. However, tariffs serve as an accelerator to this process.
Take steel and aluminum production as an example. After tariffs were implemented in 2018, U.S. steel production increased, and new mills opened. The Commerce Department reported that steel production capacity utilization rose from 74% in 2017 to over 80% in 2019. While there were short-term price increases, domestic capacity improved, leading to longer-term stability.
Also, look at the semiconductor industry. For decades, the U.S. lost its dominance to overseas producers. In response, tariffs and strategic investments helped drive initiatives like Intel’s $100 billion expansion in Ohio. This isn’t just about bringing manufacturing back—it’s about safeguarding critical industries from global disruptions.
2. Do Prices Ever Go Down?
I completely understand the frustration with rising consumer costs. However, history shows that prices can stabilize and even decrease in certain sectors when production scales up domestically.
Consider electronics. Despite inflation, prices for items like TVs, smartphones, and computers have decreased over time due to domestic innovation, economies of scale, and competitive pressures.
Another example is energy costs. The U.S. became the world’s largest oil producer in recent years, and during the last administration, gas prices dropped significantly due to increased domestic drilling. When domestic production rises, prices can stabilize because we’re less reliant on volatile foreign markets.
While food prices have increased at places like Costco, this is influenced by global supply chain issues, energy costs, and monetary inflation, not tariffs alone. The spike between 2021-2023 was largely due to pandemic-related disruptions, labor shortages, and increased shipping costs.
3. Labor, Immigration, and the True Cost of Cheap Labor
You raised valid concerns about the role of foreign-born workers in construction and agriculture, and I’d like to add another dimension to this conversation: the hidden costs of cheap labor.
While it’s true that immigrant labor helps keep wages lower in certain industries, isn’t this, in some ways, a form of exploitation? Non-resident workers often sell their labor at significantly lower wages than U.S. citizens, not because the work is inherently worth less, but because of economic vulnerability. This suppresses wages across the board and limits opportunities for American workers who would otherwise fill these roles if the compensation were more competitive.
Historically, this has created a situation where businesses benefit from low labor costs, but the social costs (like strained public services and stagnant wages) are borne by the broader community. It’s worth asking: Is an economy truly healthy if it relies on underpaying workers to keep costs down?
When labor markets adjust due to policy shifts, we often see wages increase, which can attract more domestic workers. While this can lead to short-term disruptions, the long-term effect is a more stable, fairly compensated workforce. Americans will do these jobs if the wages reflect the labor’s value. And as demand increases, so does innovation—we see more investment in automation, improved working conditions, and productivity gains.
4. The Impact on Agriculture
You’re absolutely right that foreign-born workers play a significant role in agriculture. But again, this raises the question of sustainability. Relying on low-wage, vulnerable labor isn’t a long-term solution. Many countries with advanced agricultural sectors, like the Netherlands, have minimized labor dependency through automation, hydroponics, and vertical farming.
The U.S. has already started to adopt these technologies. For example, automated strawberry pickers and robotic dairy systems are becoming more common. As wages rise, so does the incentive for innovation, which ultimately makes industries more resilient.
5. Tariffs, Global Trade, and Negotiating Power
It’s understandable to worry about tariffs straining international relationships. However, many of our allies already impose tariffs on U.S. goods while enjoying open access to our markets. Take Europe, for example—cars imported from the U.S. to the EU face a 10% tariff, while EU cars entering the U.S. face only 2.5%.
Tariffs can be used strategically to negotiate fairer trade deals. We saw this with the USMCA agreement, which replaced NAFTA. By using tariffs as leverage, the U.S. secured better terms for American workers while maintaining strong economic ties with Canada and Mexico.
Also, it’s important to note that only 25% of U.S. consumer goods are imported, including both finished and non-finished goods. This means that the vast majority of goods consumed in the U.S. are produced domestically, providing a strong foundation for economic resilience even when trade dynamics shift.
6. The Bigger Picture
No economic policy is perfect, and tariffs are not a silver bullet. But when combined with tax incentives, deregulation, and investment in domestic industries, they can play a pivotal role in strengthening the economy. The goal isn’t isolation; it’s balanced trade that protects American jobs and industries.
Lalo, I truly appreciate this thoughtful exchange. These conversations are essential for understanding the complexities of economic policy. Thank you again for sharing your insights, and I look forward to hearing your thoughts.
Best,
Julie
