Trump’s ‘America First’ platform, the very foundation of his winning campaign, centered on a promise: to fundamentally reshape global trade in America’s favor. His plan involved actively encouraging businesses to bring manufacturing back home, with the goal of generating jobs, revitalizing industries, and restoring prosperity to communities across the US that had been left behind by the wave of liberalized trade and outsourcing. The argument went that America had become overly reliant on cheaper imports, often produced in countries with significantly lower labor and transportation costs. This dependence, it was claimed, led to the decline of the Rust Belt, where blue-collar workers witnessed their living standards erode as their once-vibrant cities faced economic decay.

The chosen weapon in this ambitious economic overhaul, it would seem, is the trade tariff. By slapping tariffs on goods coming from abroad, particularly those from China, Trump’s intention is to make it more expensive for American consumers to buy foreign products and for US companies to move their production overseas. This, he asserted, would inject new life into the American industrial heartland and bolster the nation’s self-sufficiency, especially during times of crisis. It was also meant to shrink the trade deficit, making the US less vulnerable to currency manipulation—something Trump frequently accused China of—and less dependent on simply buying things.

Another crucial element of Trump’s tariff approach revolves around its potential impact on the U.S. dollar. By imposing tariffs on imports, Trump hoped to weaken the dollar itself, anticipating that global demand for the currency would decrease. The idea was that a weaker dollar would make products made in America more competitive on the world stage, thus driving up exports. This, in Trump’s vision, would bring lasting stability and prosperity to the US economy and reward the blue-collar voters who overwhelmingly supported him.

However, tariffs are far from a perfect solution; they come with significant economic downsides that cast doubt on their potential success, and crucially, they miss the real underlying issues. Think of tariffs as taxes on imported goods. While they might offer some temporary relief to certain domestic producers by making foreign goods pricier, they also increase the cost of imports for American consumers and businesses. These higher costs, coupled with the very real possibility of retaliatory tariffs from other countries, could actually hurt American consumers. They would end up paying more for everything from electronics to clothes, which would ultimately stifle economic growth.

Indeed, China has already fired back with a 34% tariff of their own and is even reportedly considering ignoring US intellectual property rights – a move that could be devastating for American businesses. The European Union, along with India and Turkey, are also gearing up to introduce countermeasures, which will negatively impact US exports. While the USA boasts a massive domestic market that global businesses are eager to access, American companies are also heavily reliant on consumers in markets around the world. Tariffs are a complex tool with unpredictable consequences, given the interconnected nature of the global economy, and therefore, they’re unlikely to be a quick fix for America’s economic challenges.

Furthermore, it’s simply unrealistic to expect to rebuild domestic industry overnight after decades of outsourcing. High-quality manufacturing requires significant investment in modern machinery, a skilled workforce, and robust infrastructure – all of which have suffered decline in the US while countries like China have surged ahead. Bridging this immense gap is not something that can be achieved in just a few short years. What’s more, the increasing use of automation and artificial intelligence means that even a return to domestic manufacturing is unlikely to bring back the level of jobs and widespread prosperity to struggling regions of the US that many hope for. These technological advancements simply reduce the reliance on manual labor.

Even if there were suddenly more blue-collar jobs available in Rust Belt states, it’s questionable whether they would truly deliver the improved living standards that Trump supporters are hoping for. The average annual salary for a blue-collar worker in the US hovers around $53,000, which, after taxes, translates to roughly $3300 a month. Consider typical monthly expenses: rent averages around $1750, health insurance around $700, food about $350, and utilities roughly $600. In reality, this average salary barely provides enough for a single person to get by, let alone support a family or partner.

The real challenge facing the U.S. economy might actually stem from a much deeper, more fundamental shift: the decision to decouple the U.S. dollar from the gold standard back in 1971. Before this pivotal moment, the dollar’s value was linked to gold reserves, meaning the government could only issue currency backed by its gold holdings. This system naturally limited the amount of money in circulation and helped keep inflation in check. However, when President Nixon ended the dollar’s convertibility to gold, it essentially gave the U.S. government the freedom to print money without any tangible backing, marking the rise of fiat currency.

Fiat currencies, like the dollar today, aren’t backed by any physical commodity; they are essentially government-issued IOUs. While this system offers short-term flexibility, it inherently leads to inflation over the long run. As more money is printed to fund government spending and address national debt, the buying power of each individual dollar diminishes. In practical terms, this means everyday goods and services become more expensive, while wages often struggle to keep pace with these rising prices, making it increasingly difficult for people to maintain their standard of living. This is precisely why a blue-collar worker in the 1980s could reasonably afford a house, a car, and raise a family comfortably, whereas that’s often out of reach today. As the saying goes, “quantity has a quality all of its own.”

What the US truly needs is an alternative to the fiat system, a form of currency whose value is actually determined by market forces, not government decisions. Such a currency could act as a safeguard against the inflationary pressures that fiat monetary policy has intensified over decades. It could also foster a more level playing field in global trade and bring stability to the global economy by offering an alternative store of value, one that is insulated from the decisions of central banks, traditional banking systems, and the fluctuations of currency exchange rates. Fortunately, such a currency already exists in the form of Bitcoin.

Ultimately, Trump’s trade tariffs are unlikely to achieve their stated goals of revitalizing the Rust Belt or resolving the more profound, systemic issues within the American economy. This is because they fail to address the core problem driving the decline in living standards: the inflationary pressures fueled by fiat currency and the constant expansion of the money supply. To effectively tackle these challenges, a fundamental rethinking of our monetary policy may be necessary, and in Bitcoin, with its decentralized design and limited supply, we might just have a viable alternative.

This is a guest post by Ghaffar Hussain. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.