Trump's tariffs did not 'reshore jobs'
David Ricardo’s theory of comparative advantage is counterintuitive, and a lot of people struggle with it. Most of us can see why free trade works in the interest of competitive countries. How, though, can it be in the interest of less efficient places? Why wouldn’t all the jobs go to the more productive trading partner?
TL;DR
- David Ricardo's theory of comparative advantage explains the benefits of free trade for less efficient countries.
- Sneaker manufacturing has moved from the U.S. to countries like China, Vietnam, and Indonesia due to lower labor costs.
- The U.S. has replaced low-wage manufacturing jobs with higher-paid roles in design, marketing, and logistics.
- President Trump's tariffs did not successfully bring manufacturing jobs back to the U.S.