“De industrialization will cause wages to deflate.”
Every time.
And if you pile the Invasion of the Border Crashers on top of that, stand by.
This should be obvious, but just today I heard Alan Greenspan reply to a question about Trump and China. He said tariffs or other limits on imports from China would not bring jobs back to America — manufacturers would just move to Viet Nam, Philipines, or wherever. That trade has always been good for America and we shouldn’t restrict it.
The difference is that in the past, America was always the one producing the heavy machinery, toys, electronics, etc. that we would trade for the raw materials or even hand-crafted goods made by third-world countries — items that were very labor-intensive. That is no longer the case. In fact, it is almost reversed — we import the highest tech goods and export the low-tech agricultural products. That is a death spiral for wages.
If I were Trump, I would not even bother with tariffs or target specific countries. I would try to limit imports in general. Require that all manufactured products sold in America have some percentage of total sales manufactured here - by unit numbers, by content of components, by dollar value. Ramp it up from 10% in the first year to 80% by year 4. There is no reason we should cede the manufacturing expertise to the rest of the world and try to live off of a service and agricultural economy.
Apple would have to make its phones here, from components made here. If they want to manufacture elsewhere, fine, but only a small percentage of US sales can be foreign made. If Samsung wants to sell phones here, it had better open a factory here to make them. If BMW and Mercedes want to sell cars here, they better either make them here or partner with Ford or GM to pool their numbers so the percentage of content threshold is met. If Ford wants to build cars in Mexico, they had better plan on selling them somewhere outside the US.