Let’s give credit where credit is due: Peter Navarro, President Trump’s Senior Counselor for Trade and Manufacturing, recently shared a wise insight about trade figures released by the federal government this week:
The latest trade report delivers a simple but powerful message. America is importing more of what it needs to rebuild at home . . . A record share of imports consists of capital goods: machines, equipment, and industrial inputs needed to expand production here at home.
Like a broken clock, Navarro is finally right. Capital goods imports are important to our economy.
His comment is especially powerful when taken alongside the Administration’s promise to boost manufacturing in the United States.
In the words of President Trump, “If you want your tariff rate to be zero, then you build your product right here in America. Because there is no tariff if you build your plant, your product in America.”
Finished products face no tariffs if they are made in America. However, manufacturers pay big tariffs to secure the goods they need to make those products. Construction equipment, presses, conveyor belts, machine tools, and other capital goods faced an average tariff of 10.2% as of April. Two years ago, in April 2024, the average was just 1.8%.
More than quintupling the tariff on capital goods American manufacturers and agricultural producers need undermines everything the Administration is doing to boost manufacturing and create the new Golden Age of American greatness.
Instead of increasing tariffs on U.S. producers, the government should build on its successful efforts to reduce taxes and regulations that stand in their way. Navarro has a chance to be a hero. He should advise President Trump to end tariffs on the capital goods we need to rebuild at home, and Congress should pass legislation to make those tariff cuts permanent.