When will Liberation Day feel like freedom? It’s hard to say because nobody but Trump knows what his tariff push will even look like. Maybe a 20% blanket tariff.
The president with a knack for redefining things has set the country’s attention on a trade realignment with hazy contours and nebulous goals. If the stock market is no longer his North Star and if growth troubles and price increases are viewed as fleeting pains, how should Americans grade Trump’s job on the economy?
A ramp-up of American manufacturing is one way to evaluate Liberation Day’s success. But choosing that metric also means extending the timescale beyond Trump’s time in office. Even if adhering to a nationalistic agenda proves worthwhile, we won’t see the end results for some time.
Read more: The latest news and updates on Trump’s tariffs
The painful shocks come first, but the economic glory only arrives later. Much later. Call it delayed onset liberation.
While it may make sense from an America First perspective to build up our own capacity, to reduce the reliance on foreign markets, there’s little doubt that the process of doing so would take years to execute.
The tech industry’s focus on AI development, which fueled much of the market’s gains over the past two years, is a prime example.
As of 12:24:26 PM EDT. Market Open.
“The reality is that the semiconductor industry is cemented in Asia with a core foundation/manufacturing footprint in China,” wrote Wedbush analyst Dan Ives in a note on Tuesday. “It would take 3-4 years to move even 10% of the supply chain from Asia to the US in our view and cost hundreds of billions along with major supply chain delays and challenges in between.”
Liberation Day will also prompt retaliation from targeted nations. That will complicate the transformation of the US manufacturing base. While domestic producers work to source inputs from markets with fewer tariffs and ramp up their ability to construct and assemble inside the US, it’s unlikely foreign governments will sit idly by. Liberation Day, in the White House’s understanding of the concept, will in many instances delay or hold back American productive capacity.
“The broader worry is that China aggressively goes down the retaliatory path … constrict the supply chain for next generation Nvidia chips/hardware along with driving more Chinese consumers to buy China goods (e.g Huawei over Apple, BYD over Tesla),” Ives wrote.
A Magnificent Seven yanked behind the curtain of a protectionist regime won’t have the same growth prospects that buttress massive valuations. The tech giants are uniquely American companies, to be sure. But for decades, being a successful American company was in part defined by maintaining a presence on the international stage.
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