“Trump’s Tariffs and American Manufacturing Can an IT Superpower Revive Its Manufacturing Sector?” Tech and Future Vol.14

Q: Due to the reciprocal tariff measures that appear to be a spontaneous idea by President Trump, the global economy is now facing tremendous turmoil. What is more concerning, however, is whether the U.S. economy can truly be sustained by digital technology alone, in the event that manufacturing — a core industry — declines.

Toshinao Sasaki (hereafter Sasaki): As a starting point, let’s first consider the fact that prominent Big Tech figures such as Elon Musk and Jeff Bezos were present at the presidential inauguration ceremony. Big Tech, by nature, tends to favor globalization and free trade, so under normal circumstances, they should be at odds with President Trump. However, looking at the recent inauguration, Trump appeared to be getting along quite well with the Big Tech crowd. This seems contradictory, doesn’t it? I believe this very contradiction symbolizes the current state of America.

Originally, like Japan, the United States was a manufacturing-centered country. But after Japan’s period of high growth settled down, the U.S. shifted its focus toward the information and service industries. Manufacturing was outsourced to China and Southeast Asia, while the U.S. attempted to survive as an advanced economy by transitioning to finance and IT.

This is based on the theory of "comparative advantage" advocated by British economist David Ricardo. The idea was that instead of holding onto manufacturing — once the U.S.’s core industry — it would be more efficient and profitable to concentrate on high value-added sectors such as space, IT, and finance.