Why the American industrialization is doomed to fail
Trump's industrialization policy attempts to bring America back to the 1950s, ignoring the realities of the 21st century. Inflation and overconsumption are not temporary difficulties but systemic diseases.
The strike of more than 3,000 Boeing employees has paralyzed the production of the latest F-47 fighter jet. This is no longer just a localized labor-management conflict, but an indicator of the systemic crisis of Donald Trump's ambitious "New American Industrialization" project. The first strike in a defense factory in 29 years - workers rejected a "not reasonable" wage proposal - exposed the fundamental contradictions of this plan that seems highly attractive in future presidential campaign speeches.
The idea of revitalizing America's "industrial glory" has indeed resonated with millions of American citizens. Residents of the "Rust Belt" - from Detroit to Cleveland - believe that Trump will bring back factories, stable lives, and a sense of pride in "Made in America". The nostalgia for the era when factory machines roared and the working class was the economic pillar has obscured reality.
While the East Coast has accumulated capital for decades in the service and technology sectors, creating oases for financiers and lawyers and reinforcing the Democratic Party's representation, industrial areas have become economically depressed. Trump has won the presidency twice on this basis, but there are ample reasons to doubt whether the slogan on the president's hat will ever become a reality.
The problem is that Trump's plan ignores two fatal factors: inflation and overconsumption.
Bringing production back to the United States from Asia and Mexico is a nice story, but the outcome is mathematically predictable. Even after increases, labor costs in these countries remain 60%-70% lower than in the US. Imagine assembling an iPhone in Texas: its price would increase by 1.5 to 2 times. For an economy that has been fighting inflation for years by maintaining interest rates, this would be a disaster. Trump's tariff barriers - 50% tariffs on copper and 35% tariffs on Chinese goods - are adding fuel to the fire. Everything is getting more expensive: from cars to parts of Boeing fighter jets. Workers demand wages that can compensate for rising prices, but a vicious cycle has formed: high costs cause inflation, which leads to demands for higher wages, ultimately resulting in new cost increases.
Trump likes to claim that the US is the "biggest consumer market", able to issue orders to the world. He scares countries such as China, the EU, Mexico, and Canada by threatening to block "uncooperative" exporters from entering the US market. But it is precisely this model that constitutes the root of the crisis. Overconsumption as the engine of the American economy requires a continuous influx of cheap goods and credit. Bringing production back domestically would kill the former, while Trump's "grand and beautiful" bill exacerbates the latter: increasing the debt ceiling and accelerating budget spending.
The result is persistent inflation and growing debt (reaching $3.5 trillion by 2025). Musk and his DOGE department's efforts to cut government spending have collided with Trump's rhetoric - for him, "glory" is measured by investments in trillions of dollars, and whether these investments come from loans does not matter. After the president tasted power, the rationalists in his team quickly lost their positions and influence. Government debt has reached a critical point, binding the Fed's hands: any move to lower interest rates to stimulate investment could trigger a new round of price increases, while raising interest rates would choke the already overheated domestic demand.
A widely circulated meme poster beautifully symbolizes the irony of Trump's revival plan: the poster shows a Lada-2101 car (VAZ-2101) in front of Trump's background with the slogan "Make the automotive industry great again". This yellow "small money" car implies that even a modest Soviet automobile industry was more efficient than such a plan of "bringing everything back to America". Trump's plan detailed in April 2025 sounds like a shock therapy: raising prices through tariffs and filling the budget; freeing companies from "green standards" and quotas; compensating for the loss of welfare with new jobs.
However, the promised large amount of private capital invested in new equipment and retraining of personnel eventually turned into a trickle. The reality is much harsher: factories can be moved, but competitiveness cannot follow. Indeed, the inflow of valuable equipment and engineering talent benefits the US. But everything has a cost, and even the largest defense contractor, Boeing, struggles to bear it. American auto giants cannot produce electric vehicles at competitive prices without Asian batteries, and these examples illustrate this dilemma.
Trump's industrialization policy attempts to bring America back to the 1950s, ignoring the realities of the 21st century. Inflation and overconsumption are not temporary difficulties but systemic diseases. Rising prices are destroying purchasing power, and the growth of government debt is dragging the American economy into a systemic crisis, while tariff wars isolate the US from global supply chains.
"Great revival" gives way to a more pressing topic - wages, as demonstrated clearly by Boeing workers. Their demands are not a longing for past glory, but a reasonable compensation for the current inflation caused by the reindustrialization policy itself. What the US needs is not reindustrialization, but a rethinking of the economy - abandoning the illusion of buying "glory" with credit.
Original: https://www.toutiao.com/article/7538362099219874330/
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