My Response to Roman Iospa’s opinion piece — entitled “This isn’t a trade war — it’s tough love to save the future”
In Roman Iospa’s opinion piece titled “This isn’t a trade war — it’s tough love to save the future,” Iospa claims that the global trade system is “broken,” and that Trump’s tariffs are necessary to prepare for a future defined by automation. As it pertains to the U.S. economy, Iospa’s thesis rests on several highly speculative assumptions:
(i) that U.S. consumer goods companies are willing to build domestic factories to manufacture their products;
(ii) that U.S. robotics companies will build factories in the U.S. to manufacture the robots that produce those goods;
(iii) that U.S.-based manufacturers of robot components — chips, batteries, electronics, steel, titanium, and more — will also localize their operations; and
(iv) that the U.S. possesses sufficient domestic raw materials to support this entire supply chain.
This vision is, of course, absurd.
The only viable path for any country — including the U.S. — to fully capitalize on automation is through global trade. Ironically, the one country that arguably meets all of the conditions necessary for the kind of isolationist, fully-automated manufacturing economy Iospa describes is China — the very target of the Trump administration’s trade war. The U.S. isn’t remotely close. For instance, in 2024, China produced roughly 41,000 tonnes of lithium, while the U.S. produced just 1,000 tonnes. While the U.S. does have lithium reserves, scaling up extraction operations to compete with China would take years — and investors have already begun to look elsewhere.
Corporate success in the U.S. is measured in four-month increments. To avoid short-term earnings hits, companies have long outsourced manufacturing rather than invest in domestic infrastructure. Investors, ever skittish, abandon consumer goods companies that miss earnings projections or reduce dividends in favor of higher-yield opportunities. There is no economic reality in which U.S. investors sit patiently while companies pour capital into building factories and extracting raw materials.
The data bears this out. The iShares MSCI EAFE ETF (EFA), which tracks developed international markets excluding the U.S. and Canada, is up 12.38% year-to-date. In contrast, the SPDR S&P 500 ETF Trust (SPY), tracking the S&P 500, is down 5.78% over the same period. Investors are already moving their money out of U.S. markets, spooked by economic instability and currency risk aggravated by Trump’s tariff policies.
Even assuming large multinational corporations decide it’s in their best interest to restructure their supply chains, small and medium-sized enterprises (SMEs) rarely have sufficient access to capital to absorb tariff-related costs. These businesses often operate on thin margins and rely heavily on affordable imported components or materials to remain competitive. Tariffs increase their production costs without providing a viable path to domestic sourcing, forcing many to raise prices, cut jobs, or shut down operations altogether. Moreover, SMEs typically lack the legal and logistical infrastructure to navigate the complex regulatory environment that protectionist policies create. Far from encouraging domestic growth, these trade barriers disproportionately penalize the very businesses that drive innovation, local employment, and regional economic development across the United States.
So I ask Mr. Iospa: Without investor support, how exactly do you plan to fund this automated industrial revolution?
Trump’s trade war is not “crisis prevention.” It is crisis proliferation. “Reciprocal” tariffs framed around trade deficits are a misguided and economically incoherent strategy — one that creates problems that cannot be solved by a circle of sycophants with little grasp of how real-world economics actually works.
