Tariff talk: Time to place your bets

For contextual purposes, let me put these three biases out there: the first is that I am a huge “America” fan; the second is I believe manufacturing created (and still sustains) the middle class; and the third is, I am in agreement when airline flight attendants instruct you to put your own oxygen mask on before helping your children or others put their mask on.

Regarding my first bias, this is not to say that I am a fan of one party, or one period, or in agreement with all policies or leaders’ positions. But if I look at “America” in the context of 1776 to today, and more specifically from the 1940’s to the current day, my belief is that most people who are living in what’s described as “western democracy” are benefactors of America and its history-altering constitution.

Never before this period of human history have so many average citizens had the opportunity to live in a house they own (mortgage or not), have discretionary income and have recreational time to spend at their own discretion. Go back even 150 years, and it’s only the nobles, blue bloods and elites that had these three things.

My second bias comes from the net economic benefits the manufacturing revolution brought not just to countries and companies, but to families, individual workers and communities. The value of the output from these primary industries (mining, farming, forestry and fishing) gets multiplied many times over by secondary industries (manufacturing), and much of that multiplied economic benefit gets distributed directly over a far broader base of people.

And my third bias is simple: the best way to be able to safeguard the health and wellbeing of others is to make sure you are healthy and capable yourself. Unselfishness, charity and generosity are all virtuous but not being a good steward of what’s been entrusted to you is irresponsible.

It’s with those three biases in mind that I take a longer and more considered view of the current tariff policies of Canada, the U.S. and all the countries now affected by those decisions. To me, it comes down to this: a healthy and prosperous America has historically always been a good economic partner and foundation to build on and with for countries that share similar values. And manufacturing has historically been a key driver for their whole economy, specifically for their blue collar and middle-class sectors.

It might seem selfish to many right now for U.S. policy to favour U.S. manufacturers or encourage more companies to try to manufacture in America, but longer term, it leaves countries like Canada with important decisions to make: do they bet on America in the long term and position themselves to be preferred partners with them going forward, or do they bet against them and put policies in place that distance them even further?

I know which course I would choose. We, or the collective western society, need America to succeed and continue to be the primary economic driver for western democracy, and we need manufacturing to continue to be the primary economic engine for many in our middleclass.

Manufacturers are salt-of-the-earth people. They build genuine win-win relationships that are measured in decades, even generations, not in years or terms. Right now, we hear feisty slogans and harmful political rhetoric, aimed at encouraging voters to believe there are better markets and customers for our industry to aim for, gambling with the long-term future of our industry for their short-term political gain. We need more manufacturers (ie. real GDP generators, real employers) speaking up and getting involved, and less politicians aiming to curry favour from their base. Manufacturers know how long it takes to build a sustainable business and earn the trust of good customers – because they do it day in and day out, decade by decade, generation by generation. They know what’s at risk.

If it was up to me, I would take the long view – historic and future. I’d place my bets on America succeeding, allowing our manufacturing sector to succeed as they achieve their success. They may have to succeed first (because they are the leaders and the first to act), but in truth, it’s always been that way.

That’s where I’d place my bet.

Paul Hogendoorn is a serial entrepreneur that has built multiple manufacturing and manufacturing technology companies. He has been a regular contributing columnist for 15 years. For more insight or information from Paul on related topics, please contact paul@tpi-3.ca or visit TPI-3.ca