The Free Press
If President Trump’s tariff strategy is going to bring production and jobs back to the United States, Didi Caldwell will be one of the first people to notice. Caldwell calls herself a factory whisperer. Her company, Global Location Strategies of Greenville, South Carolina, “is at the tip of the spear,” she says, in helping foreign and domestic companies find places to build factories in the United States. Her company helped London-based beverage company Diageo set up a whiskey distillery in Kentucky, Georgia-Pacific make Dixie plates and bowls in Tennessee, and Denmark’s Rockwool manufacture stone wool insulation in Wallula, Washington.
Caldwell is pessimistic about the job creation that Trump insists will take place thanks to his tariffs. “While everybody supports bringing good, high-paying manufacturing jobs to the United States, it’s not like turning on a light switch,” she told me. “You need to develop sites, you need energy, workforce development. That will take at least a decade. The tariffs, and the way they are being used, do not meet the stated objective.”
It’s been a few weeks since Trump shocked the world with tariffs that were far higher than expected, proving that he really meant it when he said tariffs were “the most beautiful word to me in the dictionary”. Businesspeople have had some time to consider their next steps as Trump flails and fumes. For the most part, they have found that business is down, that anxiety is high, and that the uncertainty created by Trump’s on-again, off-again moves has paralyzed new investment. In other words, it’s pretty much the opposite of what the president promised.
Trump announced a 10 percent tariff against almost all of America’s trading partners on April 2, plus higher “reciprocal” tariffs on about 90 countries. He paused most of the reciprocal tariffs for 90 days on April 9, hours after they took effect, after noticing that people were “getting yippy.” But he raised the reciprocal tariff on China to 125 percent, on top of an existing duty of 20 percent. Two days later, he exempted smartphones and some other electronics from the tariffs on China. On April 14, the government announced national security investigations into imports of pharmaceuticals and chips that are likely to result in higher tariffs on both.
It’s possible that the tariffs will end up being the highest on average in more than a century. Trump has been willing to absorb immense political and market blowback because of his conviction that his tariffs will make America great again by restoring the United States’ manufacturing leadership.
It’s not working. Ryan Petersen, a logistics expert, posted on X on April 12 that he has met U.S. manufacturing executives who have decided to produce their products overseas to avoid duties on imported components. Not exactly what Trump had in mind.
“Right now, everybody believes that the world will be different in a week or a month or a year than what it looks like right now,” Petersen, the chief executive of San Francisco-based Flexport, which helps companies manage their supply chains, told me recently. As long as uncertainty reigns, he said, “Money will sit on the sidelines.”
Watching and waiting is exactly what several small garment manufacturers told me they’re doing. Josh York said he left Abercrombie & Fitch in 2017 at age 24 to try mass-producing inexpensive clothing in his hometown of Detroit. He quickly realized he couldn’t compete with low-end imports on price, so he went upscale. His company, Soft Goods, makes T-shirts that retail for $78 and hoodies that go for $148.
Soft Goods has gotten a flurry of new orders from retailers since Trump announced the tariffs, but the industry has shrunk so much that the uptick in domestic production has overwhelmed the fabric supplier and dyehouses that York buys from. “Instead of three to five weeks, it takes six to 10 weeks to get fabric dyed,” he said.
Francisco “Chico” Park, who was born in Brazil to Korean parents, operates Project One Apparel in Vernon, California, just outside Los Angeles, part of the once thriving apparel industry in the city. He expects to be hit hard by tariffs because his yarn, thread, buttons, boxes, and other materials are almost all imported. He just bought a pallet of cotton thread from China to get ahead of the price increase. Why not buy pallets of American thread? “They’re three to four times more expensive. That’s the problem.”
That’s a story I heard repeatedly from manufacturers. “You have to make sure that your infrastructure is solid before you start lopping people’s heads off,” said Pauline Lock, who manages product development and bulk production for InStyle USA, Inc., which (still) makes clothes in the Garment District of Manhattan.
Caldwell, the factory whisperer, said the same thing about building materials for factories, much of which are imported. “If we just make all of that more expensive, the facilities are not going to meet their return on investment, so they’re not going to get built.” That, she said, “is like cutting your nose off to spite your face.”
I also found businesspeople who like what Trump is doing. Jonathan Szucs owns Advanced Superabrasives, a company that makes grinding wheels in Mars Hill, North Carolina. “Our wheels make the tools that make things,” he told me. About 15 percent of his output is exported.
Szucs said he encounters nontariff barriers even in countries that are friendly to the U.S., including Canada and Poland. He once had a machine held up in Poland because the print on a mandated safety nameplate was a tenth of a millimeter too small, he said. So he’s happy to see Trump use tariffs as leverage against allies as well as against China. “I feel good about the Trump tariffs because I don’t think they’ll be a long-term project,” he said. “I think they’ll be a short-term negotiating tool.”
The Trump administration likes to point out that multinational corporations have announced more than $1 trillion worth of investments in the United States since Trump took office. But The Wall Street Journal showed that Apple’s commitment of $500 billion was only slightly ahead of its pace over the past four years, while a joint $500 billion commitment by OpenAI, Oracle, and SoftBank included projects begun when Joe Biden was president.
“It’s all but certain that all those seen corporate investment promises are being matched by a significant amount of unseen investments never being made,” Scott Lincicome of the libertarian Cato Institute wrote in his Capitolism newsletter this month.
Surveys of companies are less positive than the messages that CEOs are conveying to curry favor with Trump. The Federal Reserve Bank of Philadelphia’s index of new manufacturing orders fell this month to its lowest since the Covid-era month of April 2020.
Chief executives also need to weigh whether there will be customers for any increased production. If the tariffs cause a recession, domestic demand will fall. And if the tariffs provoke other countries to raise their tariffs, as China has already done, export demand will fall as well. “Just as our tariffs are designed to cause production to move to the U.S., the reciprocal is also true,” Ken Simonson, the chief economist of the Associated General Contractors of America, told me.
There actually has been a recent boom in construction of factories, which is what Trump wants, but it occurred under Biden. The pace of manufacturing construction spending rose 5 percent during Trump’s first term and 207 percent during Biden’s term. (It’s too soon to say what’s happening in Trump’s second term.) The Biden boom occurred because Covid convinced companies not to rely so much on lengthy global supply chains, and because construction got a boost from the Inflation Reduction Act and the CHIPS and Science Act, among other measures. The boom was strongest around semiconductors and electric vehicles.
In Ohio, companies with operations in Canada are showing increased interest in investing in the Columbus area because of the tariffs, but no one’s committing, Kenny McDonald, the president of One Columbus, an economic development agency, told me. “Most of them have just said, ‘Let’s pause.’ Even things that were right on the goal line.” Again, it’s that uncertainty.
I’ll close with a Trump supporter, Vlad Spivak, a native of Moldova who with two partners owns Modern Line Furniture of Hamilton, New Jersey. It makes cushioned booths, tables, and other furniture for restaurants, bars, and clubs. Spivak told me he used to import everything from China. Now he makes it in the United States. His prices tend to be higher than those of Chinese competitors. He said he supports tariffs that dry up Chinese imports because “people are going to get a better product instead of giving this business to Chinese people.”
But Spivak’s doesn’t fit the White House narrative that American manufacturers are being devastated by foreign competition. He told me he’s already “very profitable” even without the tariffs because he can provide customized, high-quality furniture to customers on short notice. In fact, he said he stopped sourcing from China because he could make more money producing domestically. What he really doesn’t like, he said, is to “have China a competitor on the lower end.”
Domestically, he said, “my competitors are friendly competitors. When I go to the trade show, I sit down and have a drink with them. We have our own niche, our own shelf.”
That’s fine for Spivak, but maybe not so great for price-conscious customers.
Caldwell, the site consultant, said that the United States-Mexico-Canada Agreement (USMCA), a free-trade deal, was “the single best achievement” of Trump’s first term. After years of work, her clients in the auto sector had finally managed to optimize their supply chains to take advantage of the agreement. “And now we’ve just kind of ripped it up. I think they’re sitting there, ‘Oh my God. What do we do?’ ”
The unraveling of U.S.–China economic ties echoes a darker chapter of history, when a trade dispute between the East and the West escalated into the First Opium War. On the latest episode of Breaking History, Eli Lake goes back in time in order to make sense of the present: