In a detailed defence of the current administration's trade approach, a top White House advisor has framed tariffs not as a short-term political tool but as a critical, long-term strategic instrument for reviving American industry. Peter Navarro, Senior Counsellor to the President for Trade and Manufacturing, laid out this vision in an opinion piece for the Wall Street Journal, addressing what he calls misconceptions from both sides of the political debate.
Tariffs: A Discipline, Not a Magic Wand
Navarro, a key architect of President Trump's trade policy, directly countered the polarized narratives that have dominated discussions since 2025. He stated that while the economy did not collapse under the weight of tariffs, a manufacturing renaissance also did not materialize overnight. "These outcomes should surprise no one who understands how industrial capacity is built," he wrote, emphasizing that rebuilding is a gradual process.
He explained that the primary function of tariffs is to reshape bargaining leverage, influence corporate investment decisions, and affect where companies choose to locate their supply chains. Their success, he argued, cannot be judged in mere news cycles but requires the right metrics and a realistic timeline for capital to respond. "When supported by stable policymaking, tariffs can powerfully and positively address trade deficits," Navarro asserted.
The Real Challenge: Rebuilding Lost Capacity
A central point in Navarro's argument is the immense practical hurdle facing American reindustrialization. He pointed out that critics often ignore a fundamental constraint: "You can’t reshore what you no longer have the capacity to produce." Decades of offshoring have eroded not just final assembly lines but the entire ecosystem—including tooling, supplier networks for intermediate inputs, and skilled trades.
No policy, tariffs included, can reverse this damage in a few quarters, he noted. Navarro outlined that reindustrialization must follow a sequential, step-by-step process: it begins with upstream materials and components, moves to subassemblies, and finally culminates in full-scale assembly. This progression, he added, is further dependent on complex factors like permitting, labour availability, engineering challenges, and significant capital investment.
Addressing Inflation and Trade Deficits
Pushing back against a common criticism, Navarro claimed that tariffs do not automatically lead to higher prices for American consumers. In practice, he argued, tariffs apply pressure in international markets rather than generating domestic inflation. He reasoned that many foreign producers are export-dependent, operate with excess capacity, and compete aggressively for access to the lucrative U.S. consumer market. Their business models rely on volume, not pricing power.
On who ultimately bears the cost of tariffs, Navarro said it boils down to bargaining power. "In real markets, the burden falls on whoever can’t afford to lose access to the U.S. consumer," he wrote. For export-driven systems built on subsidised capacity and suppressed domestic consumption, this typically means foreign producers absorb the cost.
Navarro concluded by linking persistent trade deficits to long-term national decline. "Decades of sustained deficits have coincided with industrial decline and rising dependence on foreign-controlled inputs," he stated, warning that this outcome is neither economically nor strategically benign. He framed tariffs as a necessary discipline that forces the true cost of dependency into corporate planning and counters predatory international trade practices.
