The two underlying reasons that seem to justify Trump’s imposition of tariffs are: 1) increasing domestic production of goods in the U.S. through the construction of new factories, and 2) reducing the American debt via increased inflation.
I have doubts about the first point, since even if there is interest from the various multinationals that export to the U.S., building new factories can take years—longer than the four years he would presumably be in office. And regarding the second point, I’m skeptical because it doesn’t seem likely that the Fed, as long as it remains independent, would allow a (hyper)inflation scenario.
But assuming Trump stays in power for more than four years and manages to replace Powell with someone who will do his bidding—and setting aside the suffering this would cause the American people—is this plan feasible? Would multinationals be interested in building new factories in the U.S.? Could inflation really reduce American debt?