I wrote this article for an Italian automation magazine—Automazione Oggi (Automation Today). I’ve written a monthly column called News from America for 12 or 13 years. After a change in Presidents, they are curious about the new administration’s impact on manufacturing and international trade.
I studied electronics and engineering and worked in engineering for most of my career. But I also did a year of graduate school in political science. This allows me to explore both sides of my brain.
Americans use a descriptive phrase for people, especially men—the “alpha male.” This person needs to assert dominance. After asserting dominance, he values loyalty above all else. We know from his first presidency that Trump needs to feel that he is the alpha male.
We also know from his first presidency that he says many things, most of which he made up at the moment. What he’ll actually follow up on is anybody’s guess. We can see from his first Cabinet appointments that he is rewarding those who have been loyal to him.
Then we have the “dance of the billionaires.” Beginning with Elon Musk. To a lesser degree Jeff Bezos. Following the election, we’ve seen a trail of billionaires and corporate CEOs kissing the ring. All assume that Trump is easily manipulated through flattery. All have an agenda. All could possibly be fooled.
Trump favors tariffs. He does not seem to understand all the ramifications of tariffs. It appears that he thinks they are an alpha male tool to “make America great again” by stopping the flow of money to other countries, especially China. Tariffs have, however, a double edge. (See below.)
Musk hopes to sell Trump on tariffs for electric vehicles. Such tariffs would reduce competition for his Tesla manufacturing company allowing him to raise prices. This would generate more profits.
Musk also sells rockets to the government. He wants to increase that business. Enter Jeff Bezos who also wants to sell more rockets to the US government. Therefore, he quashed his newspaper’s endorsement of Harris. He also hurried to congratulate Trump and kiss his ring.
Tech CEOs such as Apple’s Tim Cook, Alphabet’s (Google) Sundar Pinchai, and Meta’s (Facebook) Mark Zuckerberg hope that Trump will fight for them against the European Union. That is a complicated dance worth watching.
Meanwhile, some of Trump’s early appointees have voiced opinions favorable to breaking up these large companies. Since that attitude does not reflect Trump’s outlook, this will be another dance worth watching. Trump does tire of people easily.
Since tariffs seem to be Trump’s favorite stick, I looked at the effects from his first term. The tariffs implemented during 2017-2021 had mixed and complex effects on U.S. manufacturing:
Positive Effects:
- Some U.S. steel and aluminum producers benefited from reduced foreign competition
- Created some jobs in specific protected industries
- Led to some companies relocating production to the U.S. to avoid tariffs
Negative Effects:
1. Higher input costs for manufacturers using steel/aluminum, particularly affecting:
- Auto manufacturing
- Construction equipment
- Appliance makers
2. Retaliatory tariffs from other countries hurt U.S. exports, especially:
- Agricultural products
- Industrial machinery
- Consumer goods
3. Supply chain disruptions as companies scrambled to find new suppliers
Economic Impact:
- Studies found the tariffs cost U.S. companies and consumers billions through higher prices
- The Federal Reserve estimated the tariffs led to a net loss of manufacturing jobs due to higher input costs
- Some manufacturers absorbed the higher costs, reducing their profit margins
- Others passed costs to consumers through higher prices
The first Trump presidency was marked by daily chaos. Media had to love him, since there was always a daily hot news item to draw people’s attention. I expect more of the same. And I expect that in manufacturing some will win and some will lose—pretty much like always.
