3 errors in Donald Trump's tariff plans

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• Trump's tariff hammer, which is intended to boost the manufacture of goods in the USA, is shaking up the financial world.
• Misconception 1: Companies like TSMC from Taiwan have announced US investments of 100 billion dollars - and are still being punished by 32 percent.
• Problem 2: Investments by foreign companies would be particularly worthwhile if it were certain that the tariffs would not be abolished in one or four years.
• Milk-pan calculation 3: The USA currently has a significant shortage of staff to increase industrial production.

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Donald Trump's tariff hammer has flattened the financial world: The 78-year-old insists that his measure will make the country prosperous again. However, there are three points about his plans that make us wonder.

The Taiwan Semiconductor Manufacturing Company (TSMC) is the most important chip manufacturer in the world - and the company had already felt Donald Trump's breath before he moved back into the White House. In May 2024, the New Yorker said of the island: "Taiwan has taken over our entire chip business."

After his election victory, Trump added in mid-February: "We had Intel, we had these great companies that were doing so well. They were taken away from us. And we want that business back. We want it back in the United States."

His not-so-subtle threat: "If they don't bring it back, we're not going to be very happy." Taiwan responds promptly: at the beginning of March, TSMC announces that it will invest no less than 100 billion dollars in five new factories in the USA. Taipei must have thought that this would avert a trade dispute.

Far from it: with a new import tariff of 32%, Taiwan is only just below the new tariffs for China. TSMC's billion-euro investment has clearly not paid off in terms of avoiding tariffs.

Of course, Trump's tariffs also have a positive effect on the US economy: Swedish company Volvo, for example, has announced its intention to produce more cars in the United States after Washington imposed 25% tariffs on these foreign products.

In view of this surcharge, it may be worth expanding US production - but what if the Democrats win the next presidential election in 2028? What if they overturn the tariffs perhaps as soon as the 2026 midterm elections are over?

Under these circumstances, wouldn't it be better if the Volvo plant in Mexico with its lower wages had been expanded? Probably yes: for Trump's tariffs to work, foreign companies would have to be certain that these levies will not change in the coming decade.

In his tariff scheme, Trump is comparing the trade deficit in the exchange of goods, but is completely ignoring services. He wants to ensure that more goods are produced in the USA itself. If the White House could actually ramp up domestic production, it would also need more workers.

"Good luck", wishes the conservative Wall Street Journal (WSJ): US companies are already struggling to find "reliable, conscientious workers who can pass a drug test". However, the problem is also that capable employees receive too much state aid - or study things that nobody needs.

40 percent of smaller companies were unable to fill vacancies in March: The greatest need is in the construction industry, where 56 percent of jobs are vacant - followed by the logistics sector (53 percent) and the manufacturing industry (47 percent). The WSJ writes that there have not been so few vacancies for 50 years.

Employees wanted: Sign in Buffalo Grove, Illinois.

Archive image: KEYSTONE

At the same time, the White House has taken up the cause of deporting as many illegal immigrants as possible. There will therefore be no amnesty for this population group, which would be a prerequisite for their integration into the regular labor market.

At the very least, the planned restructuring of the industry will take many years: Trump therefore still has time to take countermeasures in this matter.

... what Donald Trump is of course achieving with his tariff plans is that all kinds of foreign negotiators are now turning up in Washington to negotiate with the administration. Taiwan, for example, is considering abolishing all tariffs on US products - and Switzerland also wants to negotiate with Trump.

If these examples set a precedent, trade conditions for the USA will improve considerably - and the tariff plans would be a success for the President despite any weaknesses.