Opinion by Jomo Kwame Sundaram (Kuala Lumpur, Malaysia)
Tuesday, February 24, 2026
Inter Press Service
KUALA LUMPUR, Malaysia, February 24 (IPS) – President Donald Trump appears to have stirred the global economic waters during the inaugural year of his second term. His goal? To restore America’s manufacturing glory and assert dominance in international law.
Manufacturing comeback
Trump has vowed to transform America into a manufacturing powerhouse. However, China currently spearheads various technological advancements. Even prominent economist Dean Baker observed a weakened US labour market in Trump’s current term, with manufacturing job growth dwindling compared to Biden’s tenure.
US manufacturers once threatened by globalisation and innovative technological changes like automation remain under stress. Historically, US policy has leaned on the private sector for technological advancements, leaving crucial issues such as inadequate infrastructure unaddressed. The Wall Street Journal put it succinctly: “The manufacturing boom President Trump promised … is going in reverse.”
Tariffs
On 2nd April 2025, Liberation Day, Trump introduced tariffs as a primary tactic for boosting manufacturing employment. This approach assumed that lost manufacturing jobs were due to what his administration deemed as ‘unfair’ competition from cost-effective imports. By February, after a decision from the US Supreme Court, Trump escalated tariffs—10% initially, then 15% the following day.
In reality, many US and multinational corporations have relocated production overseas, benefiting from lowered import expenses. Imposing tariffs on imported goods aims to rebalance this by enticing manufacturers to revert production to American soil. Higher tariffs, particularly on nations with trade surpluses with the US, overlooked services—a sector where America excels.
The Kiel Institute for the World Economy discovered only a mere fraction of tariffs were absorbed by foreign exporters. US importers bore the brunt, effectively negating any anticipated benefits from Trump’s business tax cuts.
Revenue implications
In a bold claim, Trump promised substantial tariff revenue, suggesting it would finance a significant military budget increase. However, figures tell another tale. Only $264 billion appeared in the coffers out of an expected trillion, illustrating how the tariffs didn’t close the trade deficit. This deficit, reaching $1 trillion by 2025, saw imports overshadow exports.
Despite rising mortgage rates, inflation remains unchecked. The additional revenue couldn’t even cover Trump’s increased military budget. The President’s growing unpopularity—evidenced by a Forbes report—shows 55% disapproval. Concerns about his economic strategies, especially in mitigating inflation, are mounting as midterms approach.
Financialisation
Meanwhile, the US federal debt has soared to about $39 trillion, necessitating over $1 trillion in yearly servicing from the budget. Foreigners, who once held half of US Treasuries in 2015, now possess merely 30%. Hedge funds fill the void. In an increasingly automated market, repos generate approximately $4 trillion daily for derivatives speculation, risking catastrophic loss of value.
Additionally, cryptocurrencies—the so-called stablecoins—are infiltrating financial markets, highlighting vulnerabilities. Reports at 2025’s close hinted at burgeoning financial vulnerabilities, echoing the lead-up to the 2007-08 crisis.
Hundreds of billions, wrangled from other nations via tariff threats, are expected to flood US financial markets. Yet, these funds will barely scratch the surface in terms of job creation within the manufacturing sector.
Conclusion
The Trump administration, facing the Supreme Court’s directive, might reconsider its strategic trajectory to ‘make America great again’. Reflecting on historical economic lessons could guide a more pragmatic, effective approach. But, as it stands, such a shift appears improbable.
IPS UN Bureau
© Inter Press Service (20260224063539) — All Rights Reserved. Original source: Inter Press Service
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Trump Tariffs Creating Less Manufacturing Jobs, Inter Press Service, Tuesday, February 24, 2026 (posted by Global Issues).
