When I first wrote an opinion piece for the Pel Mel, I covered tariffs, as they were a relatively obscure policy of the Trump campaign at the time. Now, far after Trump has been elected, I find that tariffs are once again a center of most economic discourse about the Trump administration. This time, however, we must address a different question than talking points on campaign trails, flashy theoretical studies, or fiery speeches meant to rally support rather than create policy. Our new question, one that will decide the next few decades of trade policy, is simple: Is Trump right about trade? For the last 50 years, since the trade deficit has skyrocketed to enormous proportions and destroyed domestic manufacturing, the answer is fundamentally yes. 

The first basic fact we must establish is that the domestic manufacturing industry is needed. Firstly, manufacturing at face value is better for employees in America. According to the Economic Policy Institute, the average salary of a manufacturing worker is 13% higher than other private industries, and their unionization rate is higher than almost any other industry in the nation. Not only are manufacturing workers paid better, but they have the tools to keep their pay in place. But most globalists are not convinced. Modern economists, like Victor R. Fuchs argue that economies shift from manufacturing to services inevitably to spur economic growth. But they ignore a key part of a service economy. It functions better if it’s built on manufacturing. According to Forbes in 2025, the manufacturing sector has a multiplying effect, meaning every job and dollar created multiplies its importance, and earns more for other sectors like research and consumer services. 

That is because manufacturing is a building block industry. By building a product like steel domestically, you make it easier to access steel by domestic construction, domestic car dealerships, and you stimulate domestic research into steel production, all vital parts of a “service” or “knowledge” economy. Furthermore, our competition exemplifies how manufacturing supports a knowledge economy perfectly. China, the largest manufacturer in the world, contains 9 out of 10 of the world’s highest quality research institutions according to the Nature index in 2024. If we believe in strong domestic research, we must support domestic production of the industries they study.

However, the overarching reason that Trump has the right course on trade policy is that he looks at it through the correct lens. Throughout his campaign speeches in all three presidential elections, Trump has emphasized that the U.S is “losing” at trade. Through Trump’s eyes, trade is a zero-sum game, where a gain by one country is a loss for another. For the last 50 years, Trump has been right. The U.S has made the decision to sacrifice long term assets and jobs for short term goods. The nation has forgotten a simple principle. It is better to sell more than you buy. Long term, it is more beneficial to have more in exports than imports. Free trade supporters like Milton Friedman have stated that trade deficits are beneficial because imports were something Americans “got to use” while exports were not. But they ignore a simple fact: under the rules of basic economic accounting, a trade deficit must be financed. When we run a trade deficit, we lose assets to foreign nations. When foreign nations run a surplus with us, they earn more in profit overall due to selling more goods to us. The loss of value from the trade deficit we run is financed by the foreign country taking this profit, and using it to buy long term assets, like real estate, businesses, and debt. This trade off is markedly bad. 

What consumers get is cars, toys, and cheap plastic products. In exchange, foreign nations get car factories, toy factories, and plastic factories. The common attack on free trade is that this loses the U.S jobs because manufacturing flows to other countries. This is widely supported, as manufacturing jobs have fallen by 5.5 million since 2000 according to the National Bureau of Economic Research. But I believe in a more structural flaw in free trade. When foreign investment comes from foreign businesses into the U.S to finance the trade deficit, it often goes into the industry the business operates in. For example, when foreign countries outcompete U.S. car manufacturers, they often buy up the domestic car industry in the U.S. This can be seen through foreign companies like Toyota, Hyundai, and Subaru, where according to Manufacturing Today in 2025, these companies took up half of all U.S car manufacturing. While a free trader would argue that foreign investment stimulates jobs, the real issue is structural. According to Edmunds.com, most foreign manufacturers in the U.S send a majority of their profits back to shareholders in their home country, just like U.S based companies send the majority of their profits to U.S shareholders. This dual issue creates a dire situation for the American economy. One, the U.S takes a net negative in jobs in the first place due to foreign competition, and secondly, the jobs it does get back are employed by foreigners, which send consumer dollars to businessmen in foreign countries. Trump is right about the necessity of solving this issue. When entire industries like manufacturing are replaced with smaller, foreign owned ones, the U.S. receives less investment in its local industries than with American owned companies, and less jobs overall.

If America wants a strong service industry, as well as powerful research institutions, it must start by reclaiming the cornerstones of its economy. While I may not agree with Trump on his methods, the problem he addresses is correct. The U.S is losing at trade. As the world’s largest economy, we cannot afford to look to tomorrow instead of next year. To keep our country ahead, we must keep industries powerful, prosperous, and importantly, American owned.