The Problem With Trump's Tariffs
Those who will make money are those who will adapt and as quickly as possible.
Bonjour from Paris!
I’m here covering Paris Blockchain Week, and I must say Paris is everything you’ve heard. Beautiful, cultured, a little smug—but it works! This week's travel only slightly disrupted my schedule, but I'm back to normal next. So, onto these Trump tariffs…
Trump always has the right instincts. But instincts are not a plan. He often aligns with the correct diagnosis—that free trade has hollowed out American industry—but instincts alone are not sufficient.
The upshot is I think these tariffs are a great idea. After all, the only people complaining about them are the people who get everything wrong (i.e., Ben Shapiro, Jim Cramer, SNL).
But without a structured policy framework, they are going to fail.
Watch this interview from economist James Goldsmith from the 90s where he predicts “free trade” will kill America and Europre. It’ll be the best thing you see all day.
As Silicon Valley writer Curtis Yarvin recently wrote: “A reflex without a plan is not action, but the illusion of action.”
In other words, a modern industrial economy is like a body with organs (factories, logistics, training systems) that all must work in sync. Tariffs are only the nutrients—it’s the planning that builds the body. Without a comprehensive, centrally-coordinated strategy (like during WWII or the New Deal), the body cannot form.
It’s another way of saying that I don’t think Trump has the gumption to endure all the short-term pain these tariffs will cause.
Maybe he will? IDK. But here are 3 reasons I don’t think the tariffs will work… and one reason at the bottom why I still think they’ll do a lot of good.
1. Trump Has Been a Tariff Man Since The 80s
Trump is a tariff man. He is fundamentally skeptical of global trade. He thinks a trade deficit means you're being ripped off.
He has been saying this since the 1980s. It's probably his most consistent policy belief, maybe the only one. Yet this raises the larger issue: tariffs only work if managed carefully.
Targeted tariffs with a staggered rollout and incentives to get companies to build industrial plants in the USA could actually accomplish what they say they want. But this sudden pedal-to-the-floor approach, rocketing the average import tariff to about 30% with no supports in place or incentives laid, is myopic.
Wanting more industrial production is an absolutely valid goal. But to avoid alienating our trade partners, we should limit it to a few targeted products and countries. A flat big percentage on everything in every country will unite everyone against us. Why would anyone trust us again?
Leaders like French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni are calling for a “Unified Europe” against Trump.
Deutsche Bank has already said that the U.S. will suffer more than Europe.
2. “Trump’s tariffs seem too high in the near term, too low in the long term.”
This is pulled from Curtis Yarvin’s latest post on “Trumpian Mercantilism.”
Give it a read.
Yarvin points out that effective economic policy uses incentives timed with production capacity. High tariffs now punish consumers without viable American-made alternatives. But in the long-term, if tariffs are too weak, they don’t provide the certainty needed to justify investment in restoring.
It’s a Catch-22. Trump’s tariffs are misaligned with the industrial growth cycle—they don’t match the "nutrient intake" to the "plant’s readiness."
It would be like pouring protein powder on your body and expecting muscles to grow. If Trump wants this plan to work he’ll have to hold out for a long time.
Under both Biden and Trump 1.0, manufacturing took a backseat. Now it’s charging ahead at full speed, giving everyone neck-breaking whiplash.
3. Is America Even Ready to Go Back to Factory Work?
Don’t believe the bullshit lie that Americans won’t work a low-status job like a factory or field worker. The corollary is that they’ll work any job for the right pay.
But that raises another problem: we’ve been separated from factory work for two generations now. Funny enough, here are the 7 most desired jobs among Gen Z:
Content Creator / Influencer
(YouTube, TikTok, Instagram—valued for freedom, creativity, and visibility)Entrepreneur / Startup Founder
(Driven by independence, purpose, and building something of their own)Software Developer / Tech Professional
(High pay, remote flexibility, and status in the digital world)UX/UI Designer or Creative Technologist
(Appeals to Gen Z's aesthetics and creativity)Sustainability / Environmental Specialist
Mental Health Professional / Life Coach
Social Media Manager / Digital Marketer
Reindustrializing equally across the nation is a pipe dream. Bureaucracy, NIMBYs, and red tape make it impossible. Cities like New York and L.A. don’t want smokestacks. Special Industrial Zones, with streamlined regulations and tax breaks, could be the answer.
I hear Detroit wanted to become the next big crypto city. Something like that: fast-track cities to specialize in one or two big ideas.
Think of these as “startup cities” for factories. They let America skip the endless red tape and experiment at scale, building new supply chains from the ground up in a sandboxed environment.
Why I Still Think Trump’s Tariffs Are a Good, Not Great Idea
Trump’s tariffs might flop, but the stock market was due for a reset and he accelerated it.
As I started this piece off the people most pissed off at the tariffs are investors with six-figure portfolios and bloated 401(k)s. Sure, fixed incomes feel the hit too—but what about everyone else?
Most of my cousins are millennials who got hit at every turn. Their first jobs turned into rubble from the 2008 housing crises, homes were priced out post-pandemic, and investments were at all-time highs by 2025, boxing them out again.
My parents keep asking about my marriage plans. Sure, with what money?
The market needed a reset, badly. This is the time to buy in. And if you’re nearing retirement, relax. By year’s end, things should steady.
Economists like Raoul Pal think we’ll hit all-time highs within 90 days.
Trump shaking out the market and priming the FED to cut interest rates and stimulate things is an act of genius… if that was in fact his plan. Who knows?
Plus Trump doesn't seem like he actually wants to be hyper-aggressive or unjust with the tariffs, so it's really another country's game to lose. You could probably call him and be like "hey, we don't want tariffs, what do you need from us?" and either fulfill what is either an easy request or meet him halfway.
Out of everything Trump’s done—and there have been many, many shortcomings—this is the one I support him on to see how it works out.