What is clear is that corporations pursued manufacturing in far-flung destinations as a deliberate strategy. The approach had its roots in the postwar world of US industrial dominance, but it was turbocharged in the 1990s. This often meant that to land big deals, it was best to offer the home patch something. A classic method was to make components in the jurisdiction you sought business from. This helped local employment and provided the technological sweeteners that governments were keen on. Who, if anyone, was being ripped off? If there was advantage being taken, there was a lot to go around. The US trade deficit with Southeast Asia has widened over the years, but opportunities were also plentiful.
Donald Trump has offered varying justifications for tariffs, depending on his audience and what's expedient at any moment. When the president chooses to mount an economic case for levies, it usually comes with the contention that trading partners are ripping off Americans. Factories need to come home — to the extent they ever left — and duties will do the trick. He professes to not care much about the crockery broken in the process, and has dubbed Wednesday “Liberation Day” in honour of his protectionist broadsides. Yet the global system he sees as a prison was anything but.
Barely mentioned is that for decades, American companies were buoyed by making products abroad. The practice brought benefits for the domestic economy, helped put a lid on inflation, and delivered influence for Washington. US partners prospered and, as their living standards climbed, they in turn bought goods and services from firms headquartered stateside. It would be too easy to call this arrangement a win-win; unions complained about outsourcing and wealth wasn’t always spread evenly in host nations. There was, however, a circle of self-interest. It worked for a long time, and still can, if Trump's team recognizes the pluses that accrued and not just the drawbacks.
