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24 May, 2025
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Trump’s Trade Jihad: Reckless Pursuit Of Manufacturing Nationalism
@Source: ipanewspack.com
In his relentless pursuit of what he calls economic nationalism, President Donald Trump’s ‘trade jihad’ is targeting newer and more diverse sectors of the global economy. The latest front in this campaign is the high-tech industry, with a particular focus on smartphone manufacturing. This marks a significant escalation both in terms of scope and intensity, as it now extends beyond traditional industries like steel and automobiles to the digital economy, threatening to destabilize global supply chains that have taken decades to establish. One of the most striking developments in this crusade is Trump’s apparent failure to persuade Apple CEO Tim Cook to shift iPhone manufacturing from India back to the United States. This failure reveals a stark reality: that corporate strategy is not as malleable as Trump may hope, and that the economic logic underpinning global manufacturing is not easily overturned by political pressure, even when applied by the most powerful office in the world. Apple’s decision to continue, and even expand, its manufacturing operations in India is driven by a multitude of reasons—cost efficiency, access to a burgeoning market, and geopolitical hedging against overreliance on China among them. It is not simply a case of defying Trump; it is about business logic prevailing over populist bravado. Trump’s reaction to this resistance has been characteristically combative. Rather than recalibrating his approach, he has opted for what can be described as economic coercion through ‘third degree’ methods. These include threats of tariffs and other punitive measures aimed at forcing compliance. By targeting Apple with threats of higher import duties and extending similar threats to Samsung, Trump is attempting to bully global tech giants into aligning with his domestic manufacturing agenda. However, this strategy is fraught with contradictions and perils. Smartphone manufacturing is a highly complex and capital-intensive process. It depends on a finely tuned global supply chain that includes components from multiple countries, highly skilled labour, and cutting-edge infrastructure. The United States, for all its technological prowess, currently lacks the large-scale facilities and cost structure to produce smartphones domestically at a competitive price. Any effort to force this shift would likely result in significantly higher consumer prices, supply chain disruptions, and potentially even product quality issues. It’s a textbook case of policy clashing with market reality. Moreover, Trump’s campaign is undercut by the transactional nature of his foreign policy. His so-called friendship with India and Prime Minister Narendra Modi, which he has frequently touted in public speeches and at rallies, seems to evaporate the moment American corporate interests do not align with his nationalist agenda. This duplicity does not go unnoticed by international partners, who increasingly view U.S. policy as erratic and self-serving. It also raises questions about the sincerity and durability of diplomatic relationships that are predicated on convenience rather than shared values or long-term strategic interests. This inconsistency weakens the United States’ credibility on the global stage. Allies are left uncertain about the continuity of agreements, and adversaries are emboldened by the apparent chaos. For countries like India, which have been navigating a delicate balance between Western alliances and domestic development priorities, Trump’s unpredictable swings make strategic planning harder. For multinational corporations operating in this environment, the instability translates into risk—a risk that could deter future investment in the U.S. altogether. At the heart of Trump’s agenda is the belief that manufacturing jobs can be brought back to America by brute force. He envisions a revival of the industrial heartland through tariffs and trade barriers, despite decades of economic evolution that have moved the global economy toward services, automation, and digitization. This nostalgic view of economic greatness harks back to a bygone era that cannot be resurrected simply by edict. Manufacturing today is leaner, more automated, and less reliant on manual labour. The jobs lost to offshoring are not the same ones that would return even under the most favourable circumstances. In this light, the targeting of smartphone manufacturers seems less about rational economic policy and more about political posturing. Trump’s base has long been animated by the promise of restored industrial might, and these high-profile attacks on global companies play well to that narrative. They offer the appearance of strength and determination, even as the practical outcomes remain elusive. In effect, the trade jihad is not just an economic campaign—it is a political performance, carefully calibrated for electoral gain. Yet, this performance comes at a price. Tariffs on smartphones and other tech products would inevitably be passed on to consumers, many of whom belong to the very demographic Trump claims to protect. A 25 percent tariff on Samsung smartphones, for example, would make them significantly more expensive for American buyers, reducing consumer choice and potentially dampening demand. For Apple, the impact could be even more pronounced, as it already commands a premium price point and depends heavily on volume to maintain profit margins. Higher prices could hurt sales, weaken the company’s market position, and even impact its stock value—consequences that would ripple through the broader economy. Furthermore, the imposition of tariffs is unlikely to achieve the desired relocation of factories to U.S. soil. Companies may instead diversify into other emerging markets where labour and production costs are still favourable—Vietnam, Indonesia, and Mexico being prime examples. This would not only sidestep U.S. tariffs but also further dilute American influence in shaping the global tech economy. The very attempt to assert control could end up accelerating the decentralization of production, undermining the strategic goals it seeks to achieve. For emerging economies like India, the stakes are particularly high. Being caught in the crossfire of a U.S. trade offensive jeopardises their developmental strategies, many of which rely on attracting foreign investment and integrating into global supply chains. If U.S. policy continues to punish companies for operating in these markets, the long-term result could be a decoupling that leaves both sides worse off. For India, the potential economic gains from hosting Apple’s manufacturing operations could be threatened by punitive U.S. measures. (IPA Service)
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