Trump says tariffs will accelerate reuse, but experts say it’s not that easy

President Donald Trump may hope that his tariffs will surge the US manufacturing renaissance, but experts say the reality is not that simple.

The president announced sweep tariffs on Wednesday, including a baseline 10% collection on all imports. He also targeted certain countries with steep tariffs, such as 34% in China, 20% in the European Union and 46% in Taiwan.

“The work and the factory will be roamed,” Trump said.

“We charge domestic industrial bases. Opening foreign markets, breaking down barriers to foreign trade and ultimately increasing production at home means that consumer competition will be stronger and prices will fall,” he said at a press conference.

Harry Moser, president of the nonprofit Reshoring Initiative, said the US has lost around 6 million jobs as businesses have moved overseas in the past four to 50 years.

He said tariffs are a good start to overcome that problem, but it is best to deal with strong dollars and build a workforce.

Moser said he prefers lower taxes than Trump announced.

“The smaller ones are easy to protect, but they are still sufficient to drive ammunition and FDI (foreign direct investment), exceeding the ability to build factories and build staff,” he said.

He said he hopes Trump’s first salvos will bring negotiations.

“As long as he’s confident that he’ll continue to attack the issue on other countries until it’s resolved, they’ll get them to come forward and probably raise their currency a little,” Moser said. “Maybe they’ll lower the tariff barrier on our products. Maybe they’ll encourage their companies to have factories in the US here.”

Still, experts said there are many issues to overcome to get companies back to the US, including uncertainty about tariffs and how long they will stay.

“Given the unpredictable nature of the path forward and the long lead times to build industrial capacity, most companies look forward to following this announcement,” Edward Mills, Washington Policy Analyst at Raymond James, said in a memo on Wednesday. “We can add new capacity if possible, but if there is no certainty in our long-term policy, bigger investments are more difficult.”

“These are investments, and as a businessman, you need to justify and streamline them,” said Panos Kovelis, professor of supply chain, operations and technology at Washington University in St. Louis. “If there is significant uncertainty, you may invest, but it is rather conservative.

A Kouvelis study of Trump’s 2018 target tariffs found that they had no major impact on repurchase or returning to work to the US. The finished product was a mixed story, upon request, he said.

Christopher Tan, a well-known professor at UCLA Anderson School of Management, says the latest taxation is considered “fluid and whimsical,” and is based on executive orders from the president and has not been made through Congress.

“So many companies are not really sure how to redesign their supply chains when trade policies are unknown and what will happen in four years,” Tang said. “So these are multi-billion dollar investments, so they cannot change in lurch.”

Morgan Stanley analyst Chris Snyder said he considers tariffs to be a “positive catalyst” for re-release, but he doesn’t expect a big wave of projects returning to the US any time soon. Now he expects small, quick turnaround investments, with output potentially increasing by around 2%, he said.

“When I talk to businesses, there’s a lot of uncertainty about what policies will happen in three months,” he said.

Furthermore, consumer trust has been hit hard. That would be a factor in the business’s decisions on whether or not they will re-arrival and when they will be on land, said Manish Cabra, head of US equity strategy at Société General. The conference committee’s monthly consumer confidence index hit its lowest level in 12 years in March.

“When you have the confidence crisis, trust in the global company that announced its investment in the US, they’ll pause,” Kabra said. “We’re in a crisis of trust, potential investments, and announced investments won’t happen at a fast pace. It’s going to be slow.”

Experts say a lot needs to happen before manufacturing can really back up again.

“The US is not ready for a re-fire. There is no infrastructure. There is no sufficient workers. We also need to look at the number of Americans willing to work in factories,” Tang said. “If you’re in a hurry, it can be quite dangerous and dangerous.”

He said he hopes that some businesses will return as a result of Trump’s tariffs, but that many still expect there to be many barriers. He said executives are under pressure to show short-term results with quarterly revenue, and managing the American workforce can be complicated.

“There are so many regulations, so many laws, so high costs, so the incentives for them to come back are not high,” Tan said.

Moser also said there is a need for significant investment in training the American workforce.

Trump’s customs program will “fail unless the nation promises a significant increase in recruitment and training programs for skilled manufacturing workers and engineers,” he said. “We need to go from ‘university for everyone’ to ‘a great career for everyone’. ”

Morgan Stanley’s Snyder said they now think they’re likely to rely on the US when companies are ready to build their next project

“The US is in a best position to acquire a more progressive factory than it has last 50 years,” he said. Additionally, he said the production wave that has started since the pandemic stumbled, and tariffs will give them more urgency.

According to Societe Generale’s Kabra, the company has announced $1.4 trillion worth of investment since the election. That would lead to up to about 200,000 new jobs, he said.

Hyundai tops the list with a $21 billion investment in US facilities, including a $5.8 billion factory in Louisiana.

Experts say that automakers are likely to be in an industry that is back in the shore. Trump has pledged to impose a 25% tariff on imported cars and tax major auto parts.

According to Kouvelis of the University of Washington, manufacturers of gas-powered cars already have a very streamlined supply chain, so they need to weigh their options.

“The gas-powered automotive industry has problems with supply chains that are difficult to adjust and there is not enough incentive to do that,” he said.

Electric cars are a different story. Because they have fewer parts, and batteries are the most important, he said, and those companies are likely to shift operations.

“Everyone understands that the US market has an advantage in losing, and that competitors are more or less excluded (such as Chinese companies),” Kouvelis said.

Snyder also said that EVs are among those likely to come to the US, but they require more capabilities. His paper, he said, would be to return to the US, which requires businesses to expand rather than shut down and move in other countries, including industrial equipment and semiconductors.

Semiconductors and drugs were exempt from tariffs, but they could still be targeted at a later date. Experts said they hope that both industries will re-fire.

The semiconductor manufacturer has received an incentive to return after Congress passed the Chips Act in 2022. In the computer and electronic products industry, most of the rebroadcast work was seen in 2024, according to the Reshoring Initiative.

“These are high-tech, high-end technology, a lot of automation. They don’t need that many workers,” Tang says.

Kouvelis said that along with the pharmaceutical company, there could be only a portion of the supply chain back.

“The question is, where do you apply the tariffs? Will you apply them to the final or chemicals? Because we want to supply chemicals and active ingredients from China right now,” Kouvelis said.

However, he said that formulation and packaging could be done in the US if it is sufficient to avoid tariffs.

“If you want to bring in all your supply chains, you’ve become very aggressive about how you can apply tariffs to everything in your supply chain,” says Kouvelis.

Including some pharmaceutical companies Eli Lily and Johnson & Johnsonwhich had already begun to expand in the United States before Trump took office.

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