U.S. Economic Policy Expert Shares Insights on Tariffs, Labor and More at UT Supply Chain Forum

“The Economy and Supply Chains: Navigating an Uncertain Future” was a highly anticipated session at the Spring 2025 Supply Chain Forum hosted by the University of Tennessee, Knoxville, Haslam College of Business’ Global Supply Chain Institute. Thomas Goldsby, Dee and Jimmy Haslam Chair in Supply Chain and David P. Perrot Supply Chain Management Faculty Fellow, moderated the session, which featured Marianne Wanamaker, professor of economics and public policy and Dean of UT’s Baker School of Public Policy and Public Affairs.

A highly regarded authority on economic policy, labor markets, workforce development and American economic history, Wanamaker served as the chief domestic economist and senior labor economist on the White House Council of Economic Advisers during the first Trump administration. Wanamaker provided a rare, behind-the-scenes-glimpse into economic policymaking at the highest levels of U.S. government.

What Problems Are Tariffs Solving?

On the eve of the session, amid significant market turmoil, President Trump announced a 90-day suspension of the steep reciprocal tariffs he imposed on nearly all U.S. trading partners on April 2. Goldsby opened the session by inviting Wanamaker’s comments and noting that Trump’s 2018 tariffs on items like steel and aluminum — invoked under Section 232 of the 1962 Trade Expansion Act — remain in place.

Wanamaker began by clarifying that her remarks reflected economic, not political, views. She noted the Constitution grants Congress, not the president, authority over taxes and trade, but in 1962, Congress ceded that power without defining a “national emergency,” effectively leaving it to presidential discretion.

“It’s not like we didn’t think this through as a country,” she continued. “We want a deliberative body to set the rules. We don’t make trade policy by Tweets. Then we changed our minds. We lulled ourselves into it in an era of peace and prosperity in the middle of last century.”

In Wanamaker’s economic opinion, the ongoing tariffs drama is doing great damage to the U.S. economy. “What is the emergency that we’re doing that damage for?” she asked. “At what point do we produce enough washing machines that we no longer have to tariff washing machines from another country? I have no idea. No one else does either because we never said what that would look like.”

First-World Economic Growth

Wanamaker then presented a line graph tracking the GDPs of G7 countries plus Mexico since 2005. The data showed the U.S. keeping pace with its peers until around 2014-2015, when it began to pull ahead.

“You can see the effect of the pandemic, then you can see everybody recover, and the U.S. has owned the post-pandemic period,” Wanamaker observed, adding that countries with stricter rules about hiring and firing labor struggled to adapt to rapidly changing markets during and after the COVID-19 pandemic.

“Coming out of the pandemic, when everybody needed to reshuffle, there was this great churn in the American labor market,” she explained.

Wanamaker called that churn an advantageous dynamism and adaptability other G7 nations lack. Another factor behind the economic struggles of other G7 nations — and the U.S.’s relative strength — is demographics: While many G7 countries face rapidly aging populations and declining birth rates, the U.S. is somewhat better positioned in both areas.

“We’re not growing enough to replace ourselves, but we’re still ahead,” Wanamaker said.

Using Tariffs to Reshore Industry

An audience member asked whether Trump is using tariffs as a bargaining chip with other countries or whether he truly believes tariffs will reshore industries. Based on her experience, Wanamaker believes it is the latter.

Goldsby commented, “I would love for that to happen, but the feasibility is another question. It seems like the globalization toothpaste is out of the tube. The fundamental economics have not changed.” He cited as an example a typical TV that currently costs $300 in the U.S. To assemble it here would increase the price enormously. In labor alone, the cost would go from $4.50 an hour to $28.64 per hour.

As another barrier to reshoring, Wanamaker brought up the production possibilities concept: With a fixed amount of capital, labor and technology in an economy, a country can only produce a certain amount of goods. The U.S. is on the production possibilities frontier, meaning it can’t make more of one product without making less of another.

“The participation rate, that is, the share of the population that is working or looking for work, among 25- to 54-year-olds in this country is near its historic peak,” she said. “There aren’t humans out there to put to work. That means if manufacturing came on shore, most of it is automated.”

Immigration, Labor, the Economy and the National Debt

Wanamaker addressed the economic implications of stopping immigration, reiterating that her observations were purely economic. She noted that fewer immigrants means fewer workers.

“That’s just the reality of it,” she said. “Last year, 85 percent of new workers in this country were immigrants. The way you get more manufacturing and fewer immigrants is either to get manufacturing that requires no workers or reallocate some other sector of the economy towards manufacturing.”

In response to an audience question about the national debt, Wanamaker said one way to lower it would be to overhaul the national immigration policy. She explained that the policy is built on outdated assumptions and currently largely revolves around which industries have the most persuasive lobbyists asking for an “immigration lane” into the country for their industries, with lanes for agriculture, the hospitality industry and the super-model industry. Additionally, of the immigrants coming into the U.S. this year, 15 percent will enter based on what they produce, and the other 85 percent will enter based on who they are related to. This system, she said, is crying out for an overhaul.

To boost economic growth and help address the national debt, Wanamaker recommended adopting a point-based immigration system, like those used by other countries. This approach would prioritize immigrants based on job qualifications, bringing in workers for critical industries who contribute to Social Security and Medicare but receive benefits only if they gain citizenship.

“That is one way of solving our entitlements problem,” Wanamaker said. “Immigration is a tool that other countries don’t have. There are not eight million people trying to get into China. They are rapidly aging and trying to figure out what to do. This is a tool that’s not in their toolkit. It’s also not in the toolkit of most of Europe. Our unwillingness to use it is astounding to me.”

Tariffs Vs. Free Trade

Wanamaker explained tariffs can be used to protect industries where the U.S. is uncompetitive but still wants them onshore. However, she noted that some countries have engaged in protectionist measures that have reduced their ability to grow as quickly as U.S.

“Economists believe, over the long run, that lower trade barriers allow a country to grow more like the U.S. than the G7s,” she said. “Why? Because when engaging in free trade, you specialize in what you’re good at, other countries specialize in what they’re good at, and you trade back and forth. When you close that system, you remove options for trade, and you as a country must now produce things that you’re less good at and try to sell those to the market.”

Entering the second Trump administration, the U.S. had the lowest trade barriers in the industrial world. Now, it has the highest. “That,” Wanamaker said, “is not a recipe for long-term success.”

Save the date: The Fall 2025 Supply Chain Forum will be held November 4-6. Want more information for recruiting UT supply chain students? Visit our Recruit our students page.

Main image, L-R: Tom Goldsby, Marianne Wanamaker

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CONTACT:

Scott McNutt, business writer/publicist, rmcnutt4@utk.edu

Contact

Scott McNutt

Business Writer/Publicist

rmcnutt4@utk.edu

Haslam College of Business - U.S. Economic Policy Expert Shares Insights on Tariffs, Labor and More at UT Supply Chain Forum