Lately, I've been thinking about the direction the U.S. is heading -- particularly around bringing back manufacturing that its big companies have set up in other countries, and relying on tariffs to make imported goods less competitive, and force the hand of its own companies, or at least attempting to.
On the surface, it seems like, use economic pressure to bring jobs and factories back home, reduce reliance on foreign supply chains, and strengthen national self-sufficiency. Raise the cost of U.S. goods in its own country as an unfortunate consequence?
The ‘thinking way’ of world’s politicians is one thing – the ‘thinking way’ of the world’s citizens is something completely different. We are no longer in a world where price alone dictates purchasing habits – the now very much opinionated citizens of the world have moved on since then. Many people, especially younger generations across the world are turning away from American products not because they are expensive, but because they no longer trust the U.S. It’s no longer just about trade policy or manufacturing locations or tariffs. It's about how the U.S. is perceived globally, by citizens.
Some here might not care what their nation is thought of globally, but when most nations around the world start to significantly dislike (to put it politely), the US anymore, it starts to turn into the US vs the rest of the world. And it’s not just Canadians saying they won’t visit anymore -- social media is full of people from other nations saying the same, and boycotting American goods too.
America might be trying to shock the world into negotiating "better" trade deals. But in doing so, in the manner in which it is doing, may have accidentally turned a generation of global citizens/consumers against its brand entirely. People are boycotting U.S. goods not because of cost, but because of what those goods represent to them now. As
they might perceive it: political instability, cultural arrogance, and heavy-handed, bullying diplomacy.
Even if some U.S. companies decide to remain inside foreign countries, the label behind the product still reads "American", and for many consumers, that might be enough to say, I’m not going to buy American regardless of what country it's manufactured in.
What happens if, five or ten years from now, the U.S. decides it
doesn't want to be isolated from world trade anymore? What if it wants to rejoin global trade networks and rebuild those bridges? It might be too late. Supply chains will already have moved on. Trust will be harder to rebuild than it was to destroy, in the minds of the global consumer.
There is also the risk that, by shielding U.S. industries from competition for significant periods, innovation will stagnate. In the meantime, innovation outside the US continues. Without the pressure to compete globally, US domestic companies might lose the drive to improve, leading to complacency and falling behind technologically.
In trying to rebuild internal strength, in the manner in which it's doing, the U.S. might be pushing away the very world it wants to show its strength over. The rest of the world
might not want to come back. Could that mean that if a recession is imminent, the rest of the world manages to eventually pull itself out, and the U.S. remains in one?
