TAG Industrial Watch: April 5, 2025
In the January 2024 publication of the Industrial Watch magazine, TAG showed how America’s industrial real estate market evolved to become heavily reliant on the dollar’s role as the world reserve currency. We also explored what could be the catalyst for the end of the dollar’s international dominance that has slowly been on the decline since the turn of the century. President Trump’s sweeping “reciprocal tariffs” on foreign imports may unexpectedly prove to be that catalyst. While we agree it is important to address America’s trillion-dollar trade deficits and manufacturing decline, we have previously covered how the true causes, and thus the solution, may be different than most can see.
When Trump demonstrated a chart of foreign tariff rates on U.S. goods, his administration accounted for “currency manipulation” and other protectionist policies. Setting aside protectionist policies, which the U.S. has numerous such policies of its own, foreign governments like China have indeed intervened in the currency markets for years to devalue their currency to keep the exchange rate fixed with the U.S. dollar. However, what the president and our trading partners (at least hitherto) don’t see is that foreign currency manipulation has served to subsidize the American economy at the expense of foreigners. The Chinese live below their means so that we Americans can live above our means.
While currency manipulation has enabled the trade deficits, they are not the root cause. America’s own fiscal, regulatory, and monetary policies that have reduced saving rates, raised production costs, and encouraged people to borrow and consume are the probable source behind America’s manufacturing decline and trade deficits. Unfortunately, the president’s tariffs, which are effectively taxes on Americans, probably won’t solve these problems. However, what these tariffs can do is be the catalyst for foreigners to stop enabling our trade deficits via currency manipulation (which has given us access to cheap imports) and to sell off their dollar holdings of U.S. Treasuries and mortgage-backed securities (which has kept our interest rates low). While this problem can appear complicated, industrial investors who have been following TAG understand that the long-term solution remains simple. Specialized facilities (often found among small industrial properties) used in the production of globally traded goods stand to benefit the most.
I N D U S T R I A L N E W S
Stellantis Idles Plants In Mexico And Canada Due To Tariffs
CNBC – April 3, 2025
Read More
Uncertainty Over Tariff Policies Shakes Industrial Real Estate
GlobeSt.com – March 31, 2025
Read More
Sweeping Trump Tariffs Shock Global Economy,
Drawing Threats And Calls For Talks
Associated Press – April 3, 2025
Read More
China, Japan, South Korea Will Jointly Respond
To US Tariffs, Chinese State Media Says
Reuters – April 1, 2025
Read More
‘Nowhere On Earth Is Safe’: Trump Imposes Tariffs
On Uninhabited Islands Near Antarctica
The Guardian – April 2, 2025
Read More
R E G I O N A L N E W S
Ports of LA, Long Beach Handle More
Traffic But Face Higher Vacancies
Connect CRE – March 12, 2025
Read More
‘No Signs Of Retreat’: Chicago Industrial
Investors Double Down On Strategy In 2025
REjournals – April 1, 2025
Read More
Americold Launches $127M Metro Houston Expansion
Commercial Property Executive – March 18, 2025
Read More
Starwood Buys Industrial Portfolio
For $685M In Major E-Commerce Play
GlobeSt.com – March 27, 2025
Read More
Tesla Reports 336,000 Vehicle Deliveries In
First Quarter, 13% Drop From A Year Ago
CNBC – April 2, 2025
Read More