According to the economist, Paul Craig Roberts, “Tariffs protect ill-considered government policies, such as costly regulations and high taxes on labor and capital that make our goods uncompetitive in international markets.”
Young and emerging countries may want tariffs to protect nascent industries and other local protections to help assure employment and rise of a strong commercial base. Advanced (OECD) countries seek to protect existing sectors for a number of reasons including employment and political/military power.
Once in place both exporting and importing countries develop a sense of normalcy and change becomes difficult for all parties involved. They become part of the business culture of the exporter and importer. As with other cultural change, engrained habits are stubborn.
Policy Disruption
The Trump Administration is arguing that an unlevel trading system has existed, at least since the end of World War II in 1945. Their tariff policy seeks to update the partner relationship with countries and their companies that are no longer rebuilding form that devastating conflict. The protections afforded nascent rebuilt from that era are no longer necessary or relevant.
As might be expected, many prefer the status quo and vehemently argue the unfairness of it all and other rationales for not changing practices and policies that are 80 years old. This is no difference than those that have been made redundant due to a reorganization make the case for their value add, usually in vain.
Comparative Advantage
Over two decades ago this author postulated, “Economists usually think of comparative advantage as a function of the raw material or strategic position a country holds. In the knowledge age, comparative advantage goes to those who hold the knowledge necessary to achieve strategic posture.” Moreover, “Thought leadership and subsequent comparative/competitive advantage usually goes to those that see things differently, earlier, or both. Seeing is one thing, believing another, and implementation still another. Leaders do not just postulate, they make things happen. This is the tough part. Many people have good ideas, but most do not implement and even fewer follow through to the end.”
In May 2025, President Trump signed over $2 Trillion in business deals with Saudi Arabia, Qatar and the United Arab Emirate. These were not traditional oil and gas investments that this part of the world is known for, but commitments in defense, aerospace, AI and other advanced technologies.
In addition to aircraft and other defense products and solutions, these countries focused on the development of emerging capabilities such as AI. A classic example of the position taken almost a quarter of a century ago.
Are Humans Being Replaced?
This has been the question raised by every dramatic technological introduction. The general consensus, in this writer’s opinion is, we adapt and adopt to the new when it is beneficial and reject it when it does not add value to our personal life–the ‘What’s in it for ME question.
This is the contemporary question all of us are reacting to with the advent of Artificial Intelligence. Accordingly, “The rise of artificial intelligence has reinforced the belief that transformations across various domains can be primarily achieved through digital technology. However, the creative potential for change of people’s cognitive, emotional and imaginative powers often loses importance and gives way to creative technology. Many therefore see humans as having arrived in the age of post and transhumanism. But is the human being as such really a kind of obsolete model? According to such a view, it seems to have become ‘normal’ for people to leave their own fate, as well as the fate of humanity and the environment, to technical transformation possibilities. This implies accepting that technology increasingly becomes an instrument of control rather than a tool to be used and directed, as individuals become subject to a technology and capitalist artificial intelligence industry that surpasses their own capabilities, leading them to be controlled by it.”
One can assume that these concerns will cause many to fight for existing international trade rules to remain in place. This is true, not only for tariffs, readers may remember that in 2024, “The ILA’s ( International Longshoremen’s Association) initial proposal was for a 77% salary increase over the six-year duration of their contract with USMX, as well as a complete ban on the automation of gates, cranes and container-moving trucks at its ports.”
Short-Term Pain, Long-Term Gain
Cultural Disruption can be sharp and quick, like a knife cutting into the skin. It will take some time and perhaps a long time for transformation to take hold, and wounds to heal.
However, this parade is marching by. We can all chose to join in, become a bandleader, or hope it will just go away. Change can be painful, but without it we cease to grow and will eventually whither and our value to organizations will no longer exist.
Get with the program! Tariffs were never meant to be generational, but only a short-term economic band aid.
How are you and your loved ones preparing for ongoing technological convulsions?
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The author’s credentials in this field are available on his LinkedIn page. Moreover, Dr. Shemwell is the coauthor of the 2023 book, “Smart Manufacturing: Integrating Transformational Technologies for Competitiveness and Sustainability.” His focus is on Operational Technologies.
We are also pleased to announce our forthcoming book to be released by CRC Press in June 2025, Navigating the Data Minefields: Management’s Guide to Better Decision-Making. This is a book for the non-IT executive who is faced with making major technology decisions as firms acquire advanced technologies such as Artificial Intelligence (AI).
“People fail to get along because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they have not communicated with each other.” (Martin Luther King speech at Cornell College, 1962). For more information on Cross Cultural Engagement, check out our Cross-Cultural Serious Game. You can contact this author as well.
For more details regarding climate change models, check out Bjorn Lomborg and his book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.
Regarding the economics of Climate Change, check out our blog, Crippling Green.
For those start-up firms addressing energy (including renewables) challenges, the author can put you in touch with Global Energy Mentors which provide no-cost mentoring services from energy experts. If interested, check it out and give me a shout.