President Trump recently announced new tariffs on trading partners, claiming they will help reopen shuttered car factories in Michigan and bring jobs back to the US. However, economists say the move may actually increase incentives for companies to automate human labor entirely.
According to Carl Benedikt Frey, an economist at Oxford University, the increased manufacturing costs from tariffs could lead to significant investments in automation. “Costs are higher in the United States,” he says. “That means there’s an even stronger economic incentive to find ways of automating even more tasks.”
Frey notes that when labor costs are low, companies tend not to invest in automation. But if they’re forced to move their labor to more expensive countries, the cost-benefit calculation changes drastically.
Nobel Prize-winning economist Daron Acemoglu predicts that tariffs may lead to initial disruption, but in the medium term, companies will be forced to bring some supply chains back home via AI and robots. However, experts caution that productivity gains from automation are unlikely to offset the losses stemming from supply chain disruption and added import costs.
The rise of robotics is also a factor in this debate. Advances in general AI systems like large language models and robot bodies becoming more deft could make it easier for companies to automate tasks. However, robots still struggle in complex environments, and flexible robots may take 10 years or more to develop.
If tariffs lead to increased automation, it’s unlikely that productivity gains will offset the losses. “The main first-order effect of tariffs is they will make everything less efficient,” says Erik Brynjolfsson, director of the Digital Economy Lab at Stanford University.
While the Trump Administration claims its AI policies aim to benefit American workers, experts are skeptical. Historically, new technologies have led to a shift towards automation, allowing companies to break through labor protections and gain more leverage.
As the debate surrounding Trump’s tariffs continues, it’s essential to understand the potential consequences of increased automation on employment and productivity in the US.
Source: https://time.com/7276087/trump-tariffs-ai-automation-robots