Alexander Hamilton: Championing Tariffs for Economic Growth and Industrial Development

 

November 23, 2024

Alexander Hamilton, one of the Founding Fathers and the first Secretary of the Treasury, was a proponent of tariffs, as is President-elect Trump, as a tool to support domestic economic growth and foster industrial development.

Hamilton's "Report on Manufactures" (1791) outlined a vision where tariffs would protect nascent American industries against established foreign competitors. He believed government intervention, through measures like tariffs, was crucial for nurturing domestic manufacturing and achieving economic independence.

Hamilton’s and Trump's advocacy for tariffs remains relevant, emphasizing their role in creating a fair and robust economic environment. However, their modern application requires consideration of both benefits and potential drawbacks to ensure they effectively serve national interests.

Reshoring and Nearshoring: A Call to Action for America's Future

In the face of mounting trade imbalances and global economic uncertainty, the United States must embrace reshoring and nearshoring as pivotal strategies to safeguard its economic sovereignty and national security. This approach isn’t merely about protecting industries; it’s about ensuring a brighter future for generations to come.

It’s time our elected officials step up, prioritize “the people by the people”, and make decisions that serve the best interests of the country—not just short-term profits or political expedience.

The Problem at Hand

For decades, America’s overreliance on foreign production has exposed us to:

1. Supply Chain Vulnerabilities: Geopolitical tensions and pandemics highlight the dangers of relying on adversarial nations like China for critical goods.
2. Economic Inequality: The hollowing out of American manufacturing has left entire communities without stable, well-paying jobs.
3. National Security Risks: Dependence on foreign sources for essential items like semiconductors and pharmaceuticals poses significant risks during crises.

Despite bipartisan acknowledgment of these issues, progress remains at a snail's pace or slower, hampered by corporate interests, partisan gridlock, and shortsighted policies.

A Bold Vision for Reshoring and Nearshoring

Reshoring (bringing manufacturing back to the U.S.) and nearshoring (moving production to nearby allies) provide a powerful solution. Here’s why it matters and how we can make it happen.

Key Industries to Focus On

Semiconductors: The Brains of Modern Technology

Semiconductors are the lifeblood of technology, from smartphones to military systems. Yet, America’s reliance on Taiwan—a region under constant threat from China—is a strategic vulnerability.

Call to Action: Expand initiatives like the CHIPS Act to fund domestic semiconductor plants and boost R&D in advanced chip manufacturing. By reducing dependency on foreign suppliers, the U.S. can maintain technological dominance and secure critical industries.

Pharmaceuticals: Health Security at Risk

The COVID-19 pandemic exposed the U.S. and North America's, dependence on China and India for essential drugs and medical supplies. This reliance jeopardizes public health and limits our ability to respond to crises.

Call to Action: Incentivize domestic pharmaceutical production and diversify supply chains to include trusted partners like Canada, Central and South America and Costa Rica. A strong national stockpile and robust domestic industry can ensure health security for all Americans and our hemispheric partners.

Defence and Aerospace: Securing Our Nation

America’s military superiority depends on a strong domestic base for defence technologies. Outsourcing the production of critical components risks our national security.

Call to Action: Ensure defence contracts prioritize domestic manufacturers and develop ethical, sustainable sources for rare earth materials. Reshoring this sector is a matter of survival.

Green Energy: Competing in the Clean Tech Race

China dominates the global market for solar panels and EV batteries, leaving the U.S. trailing in the race for a sustainable future.

Call to Action: Invest in U.S. manufacturing for green technologies while supporting nearshoring in Latin America to create a regional hub for renewable energy production. This will drive economic growth, create jobs, and reduce environmental impacts.

Regions to Partner With

Latin America: A Natural Ally

Proximity and shared trade agreements make Latin America an ideal nearshoring partner. Countries like Mexico, Costa Rica, Argentina, Chile and Brazil are ripe for collaboration in industries like automotive manufacturing, electronics, and medical devices.

Call to Action: Expand the USMCA and invest in infrastructure development across Latin America to strengthen regional supply chains. This not only reduces costs but also builds lasting geopolitical alliances.

Southeast Asia: A Trusted Alternative

As the U.S. decouples from China, nations like Vietnam, Malaysia, and the Philippines offer cost-effective manufacturing with growing geopolitical alignment.

Call to Action: Deepen trade relationships with these nations while maintaining ethical labour and environmental standards, ensuring a balanced approach to globalization.

Eastern Europe: Countering Russian Influence

Countries like Poland and the Czech Republic offer skilled labour and proximity to European markets, making them attractive nearshoring partners.

Call to Action: Strengthen economic ties with Eastern Europe to bolster U.S. influence in the region and reduce Europe’s dependency on China and Russia.

Policy Recommendations

1. Tax Incentives and Grants Offer robust tax breaks and grants to companies that reshore critical industries or establish production in allied nations.
2. Infrastructure Investments Build modern ports, railways, and power grids to support domestic manufacturing and invest in similar projects with nearshoring partners.
3. Workforce Development Expand STEM education, vocational training, and apprenticeships to equip Americans with the skills needed for high-tech and advanced manufacturing jobs.
4. Trusted Supply Chain Networks Create a "trusted suppliers network" with partner countries, ensuring ethical and sustainable sourcing of materials.
5. Public-Private Partnerships Encourage collaboration between the government and private sector to fund innovation and streamline the transition to resilient supply chains.

Elected Officials: A Challenge for Action

To our leaders: The time for half-measures and political posturing is over. Americans deserve policies that prioritize their well-being, create jobs, and secure the nation’s future. Here’s what you must remember:

1. Listen to the People: Reshoring and nearshoring are about revitalizing communities, not just boosting corporate profits.
2. Act Boldly: The global landscape is shifting rapidly. Delay only deepens vulnerabilities.
3. Put Country Over Party: Economic resilience and national security should unite all Americans, regardless of political affiliation.

The choices you make today will define America’s standing in the world tomorrow. Choose wisely—for the people, by the people, and for the best interests of this great nation.

A Call to the American People

Let us demand more from our leaders and hold them accountable. America has the talent, resources, and spirit to lead the world—not as a nation dependent on others, but as a beacon of resilience and innovation.

The path forward is clear. The only question is: Will we take it?